Opinion
No. 114494/11.
2012-05-7
LADENBURG THALMANN & CO. INC., Petitioner, v. Richard MATTY and New York State Division of Human Rights, Respondents.
Janene M. Marasciullo, Esq., Kaufman Dolowich et al., Woodbury, for petitioner. Gregory Filosa, Esq., Leeds Morelli & Brown, P.C., One Old Country Rd., Carle Place, for respondent Matty.
Janene M. Marasciullo, Esq., Kaufman Dolowich et al., Woodbury, for petitioner. Gregory Filosa, Esq., Leeds Morelli & Brown, P.C., One Old Country Rd., Carle Place, for respondent Matty.
Erin Sobkowski, Esq., Caroline J. Downey, General Counsel, Bronx, for respondent NYSDHR.
BARBARA JAFFE, J.
By order to show cause dated January 4, 2012, petitioner moves pursuant to CPLR 7501 et seq. and the Federal Arbitration Act (FAA) for an order compelling arbitration of all disputes between it and respondent Matty related to Matty's employment and staying the action pending before respondent New York State Division of Human Rights (SDHR) filed by Matty against it. Matty and the SDHR oppose.
The salient facts are as follows: In February 2001, Matty executed an employment application with petitioner which required him to agree that:
any dispute or claim that may arise between [Matty] and [petitioner] ... shall be determined by mandatory arbitration (and not in a court). This agreement to mandatory arbitration covers all employment disputes or claims including but not limited to termination of employment and all claims under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967 and any other federal, state or local statute or regulation regarding employment discrimination.
(Petition, dated Dec. 22, 2011 [Pet.], Exh. 2). Upon his employment with petitioner, Matty also received a copy of petitioner's employee handbook which contains the identical arbitration clause. ( Id., Exh. 3).
On or about September 19, 2011, Matty filed a complaint with the SDHR, alleging that petitioner had violated Article 15 of the Executive Law of the State of New York (Human Rights Law) by discriminating against him because of his disability. ( Id., Exh. 1).
At issue is whether Matty's agreement to engage in mandatory arbitration precludes him from pursuing his complaint with the SDHR or the SDHR from investigating and/or prosecuting the complaint.
In E.E.O.C. v. Waffle House, Inc., the Supreme Court held that the Equal Employment Opportunity Commission (EEOC) had the authority to pursue relief on behalf of an employee who had filed a claim against his or her employer, notwithstanding that the employee had agreed to arbitrate discrimination claims against the employer. (534 U.S. 279 [2002] ). The Court observed that the EEOC was statutorily authorized to bring enforcement actions on its own behalf, even if the employee had declined to pursue his or her claim. The Court also rejected the employer's claim that the FAA barred the EEOC from pursuing a claim against it as the EEOC was not a party to the employment contract at issue, nor did it agree to arbitrate the claim.
Prior to Waffle House, Inc., in Gilmer v. Interstate/Johnson Lane Corp., the Supreme Court held that an employee who filed a discrimination claim against his or her employer was bound by a mandatory arbitration clause in an employment agreement, but also found that “an individual [discrimination] claimant subject to an arbitration agreement will still be free to file a charge with the EEOC, even though the claimant is not able to institute a private judicial action.” (500 U.S. 20 [1991];see also E.E.O.C. v. Rappaport, Hertz, Cherson & Rosenthal, P.C., 273 F Supp 2d 260 [ED N.Y.2003] [E.E.O.C. cannot be compelled to arbitrate discrimination complaint against employer even though employee could be compelled to do so pursuant to arbitration clause in employment contract] ).
In analogous circumstances, the New York Court of Appeals has held that the Attorney General of the State of New York may not be compelled to arbitrate claims brought by him or her on behalf of persons who had signed agreements containing mandatory arbitration clauses. The Court observed that the Attorney General had not agreed to arbitrate any claims and that he was statutorily authorized to bring actions on behalf of the public interest. (People v. Coventry First LLC, 13 NY3d 108 [2009];see also People v. H & R Block, Inc., 58 AD3d 415 [1st Dept 2009] [trial court properly declined to compel plaintiff to arbitrate claims] ).
Here, absent any dispute that the SDHR, like the EEOC and the Attorney General, has the authority to investigate and prosecute discrimination complaints on its own behalf in order to vindicate the public interest by eliminating discrimination in employment (Executive Law §§ 290, 295), and as the SDHR was not a party to the employment agreement between petitioner and Matty, petitioner has failed to establish that the arbitration clause at issue precludes Matty or the SDHR from pursuing Matty's complaint.
Petitioner has also failed to cite any authority for the proposition that Matty's discrimination claim may not be heard simultaneously in an arbitration and an action filed by the SDHR. ( See eg Matter of New York State Dept. of Labor (Unemployment Ins. Appeal Bd.) v. New York State Div. of Human Rights, 71 AD3d 1234 [3d Dept 2010], lv denied15 NY3d 714 [SDHR required to give collateral estoppel effect to findings made in earlier arbitration concerning discrimination claim]; Matter of Metro–North Commuter R .R. Co. v. New York State Exec. Dept. Div. of Human Rights, 271 A.D.2d 256 [1st Dept 2000] [same]; see also Anker Mgt. Corp. v. State of NY, Div. of Human Rights, 215 A.D.2d 706 [2d Dept 1995] [denying petitioner's motion to enjoin SDHR from investigating and adjudicating complaint filed by employee despite employee having participated in arbitration proceeding regarding claim as SDHR had independent authority to pursue claim] ).
Accordingly, it is hereby
ADJUDGED and ORDERED, that the petition is denied and the proceeding is dismissed.