Tuesday, June 6, 2017

Arbitration is Compelled in an FLSA and NYS Labor Law Overtime

Moise v. Family Dollar Store, ____F.Supp. 2d____, No. 16-CV-631, NYLJ June 7, 2017 (S.D.N.Y. 2017), is an interesting decision.
  • A supervisor/Shelf Stocker claimed that he was unlawfully denied overtime pay under the FLSA and New York law. Significantly, however, during his on line drawing he was required to accept an arbitration agreement. The employee downloaded this agreement and checked a box that he accepted it. 
  • The court rejected the argument that there was no valid agreement to arbitrate because the employee did not remember accepting this agreement. The court also rejected the claim that the agreement was unconscionable because that is for the arbitrator to decide, reasoning:
  • Under Rent-A-Center, Moise's unconscionability claim is for the arbitrator to decide. The Agreement provides that "any claim or controversy regarding the Agreement['s]…unconscionability" shall be "decided by an arbitrator through arbitration and not by way of court or jury trial." Broel Decl. Ex. B (boldface omitted). This provision plainly delegates a claim of unconscionability to the arbitrator. Moise did not, however, direct his unconscionability claim to the delegation provision specifically — indeed, Moise's opposition brief does not mention the delegation provision at all. See Pl.'s Opp'n Mem. at 9-12. Moise's failure to direct his attack at the delegation provision is particularly striking because, while his brief quotes from other sections of the Agreement, see id. at 10, it is the delegation provision that specifically addresses the "unconscionability" argument he advances here, Broel Decl. Ex. B. Because Moise's unconscionability claim falls within a provision delegating this claim to the arbitrator, and because Moise did not specifically challenge this provision, the Court must enforce the delegation provision and refer the question of unconscionability to the arbitrator. See Rent-A-Center, 561 U.S. at 71-72; see also, e.g., Philippe v. Red Lobster Rests. LLC, No. 15-CV-2080 (VEC), 2015 WL 4617247, at *4 (S.D.N.Y. Aug. 3, 2015) (granting a motion to compel arbitration where the opposing party did not challenge a delegation provision that "plainly encompass[ed]" his claim).

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