Sutherland v. Ernst & Young LLP
2012 U.S. Dist. LEXIS 5024
S.D.N.Y.2012Background
- Sutherland sues Ernst & Young under FLSA and NY wage laws for allegedly misclassifying her as exempt and unpaid overtime.
- She signed an arbitration agreement restricting to individual arbitration under EY’s Common Ground program.
- This Court previously denied EY’s motion to compel arbitration, finding the class waiver precluded vindication of statutory rights.
- EY moved for reconsideration arguing the ruling was clearly erroneous, new evidence, and changes in controlling law.
- Arguments include AmEx I/II and Concepcion as changing the legal landscape and the cost-vs-recovery analysis for individual arbitration.
- Court maintains that Sutherland cannot vindicate statutory rights under the agreement and denies reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the order denying arbitration was clearly erroneous | Sutherland cannot vindicate statutory rights alone | Costs in arbitration are recoverable; case-by-case analysis favors EY | No clear error; order denied |
| Whether new evidence warrants reconsideration | Counsel’s remarks show potential for individual discovery | Statements were hypothetical, not new evidence | No new evidence warranting reconsideration |
| Whether intervening changes in law require reconsideration | AmEx I/II and Concepcion alter burden and preemption analysis | Concepcion does not overrule AmEx I/II; facts differ | No intervening change requiring reversal; reconsideration denied |
| Whether the law governing arbitration costs/vindication supports arbitration on a classbasis | Individual recovery would be infeasible due to discovery costs | Agreement intends costs to be manageable; AmEx I/II apply | Facts still show class arbitration needed to vindicate rights; reconsideration denied |
Key Cases Cited
- AmEx I, Italian Colors Rest. v. Am. Express Travel Related Servs. Co., 554 F.3d 300 (2d Cir. 2009) (case-by-case analysis of class arbitration viability; costs vs. recovery)
- AmEx II, Italian Colors Rest. v. Am. Express Travel Related Servs. Co., 634 F.3d 187 (2d Cir. 2011) (reaffirms case-by-case approach to enforceability of class waivers)
- AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (FAA preempts state Discover Bank rule; class waiver validity under FAA)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (arbitration of statutory claims may proceed if rights vindicable in arbitral forum)
- Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79 (2000) (arbitration costs may render vindication impractical; may affect enforceability)
- Brooklyn Savings Bank v. O’Neil, 324 U.S. 697 (1945) (waiver of statutory wages prohibited to protect rights under FLSA)