Spano v. V & J Nat'l Enters., LLC

Decision Date30 August 2017
Docket Number16–CV–06419–EAW–MWP
Citation264 F.Supp.3d 440
Parties Daniel SPANO, Plaintiff, v. V & J NATIONAL ENTERPRISES, LLC, V & J United Enterprises, LLC, and V & J Holding Companies, Inc. Defendants, V & J National Enterprises, LLC, V & J United Enterprises, LLC, and V & J Holding Companies, Inc. Plaintiffs, v. Daniel Spano, Defendant.
CourtU.S. District Court — Western District of New York

Jeremiah Frei–Pearson, Finkelstein Blankinship Frei–Pearson & Garber LLP, White Plains, NY, for Plaintiff.

Katherine S. McClung, Bond Schoeneck & King PLLC, Rochester, NY, Sharon M. Porcellio, Michael E. Hickey, Bond, Schoeneck & King, PLLC, Buffalo, NY, for Defendants.


ELIZABETH A. WOLFORD, United States District Judge


Plaintiff Daniel Spano ("Plaintiff") brings this putative class action lawsuit against V & J National Enterprises, LLC ("V & J National"), V & J United Enterprises, LLC ("V & J United"), and V & J Holding Companies, Inc. ("V & J Holding") (collectively, "Defendants"), for damages allegedly sustained as a result of Defendants' illicit wage practices. (Dkt. 1). Defendants have filed a counterclaim against Plaintiff seeking declaratory relief in the form of an order requiring that Plaintiff's claims be resolved through arbitration pursuant to an Arbitration and Collective/Class Waiver Agreement (the "Agreement"). (Dkt. 10). Presently before the Court is Plaintiff's motion to dismiss Defendants' counterclaim for lack of subject matter jurisdiction and stay of the action pending an investigation by the National Labor Relations Board ("NLRB") (Dkt. 15); Defendants' motion to compel individual arbitration, stay this action, and strike all class/collective actions from the complaint (Dkt. 17); and Plaintiff's motion for leave to file a supplemental declaration (Dkt. 41).

For the reasons set forth below, Plaintiff's motion for leave to file a supplemental declaration (Dkt. 41) is GRANTED; Defendants' motion to compel arbitration and stay this action pending arbitration (Dkt. 17) is DENIED; Plaintiff's motion to dismiss based upon lack of subject matter jurisdiction (Dkt. 15) is DENIED; Plaintiff's motion to stay this action pending the resolution of the NLRB investigation (Dkt. 15) is DENIED; and this action (along with Defendant's pending motion to strike (Dkt. 17)), is STAYED pending the resolution of the Supreme Court's decision in the consolidated cases of Ernst & Young, LLP v. Morris , ––– U.S. ––––, 137 S.Ct. 809, 196 L.Ed.2d 595 (2017), Epic Sys. Corp. v. Lewis, ––– U.S. ––––, 137 S.Ct. 809, 196 L.Ed.2d 595 (2017), and NLRB v. Murphy Oil USA, Inc., ––– U.S. ––––, 137 S.Ct. 809, 196 L.Ed.2d 595 (2017).


Plaintiff was an employee of V & J Employment Services, Inc. ("V & J Employment")—a non-party to this action—where he worked as a pizza delivery driver for a Pizza Hut restaurant operated by Defendants. (See Dkt. 1 at ¶¶ 10, 15). Plaintiff makes various allegations concerning Defendants' wage practices and on-the-job reimbursements. (Id. at 6–8). Specifically, Plaintiff claims that Defendants did not pay him, or other similarly situated delivery truck drivers, a fair share of reimbursements pursuant to the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201 et seq. ("FLSA"), and the New York Labor Law, N.Y. Lab. Law Art. 19 ("NYLL"), and seeks damages arising from these violations. (Dkt. 1).

Prior to the commencement of this action, on November 6, 2015, Plaintiff executed the Agreement which requires "confidential binding arbitration":

for any claims, including any claims now in existence or that may exist in the future that (a) [Plaintiff] might have against [V & J Employment], its predecessors, affiliates, parents, subsidiaries, related business entities, franchisors, successors, assigns, and all of their current, former, and retired officers, directors, principals, shareholders, owners, members, employees, employee benefit plans, employee benefit plan fiduciaries, and agents ... including, but not limited to, [V & J United], [V & J National], and Pizza Hut of America, LLC, or (b) that [V & J Employment] may have against [Plaintiff].

(Dkt. 10–1 at ¶ 1). The Agreement further provides:

[w]ithout limitation, such claims include any claims concerning application for employment, wages, expense reimbursement, compensation, leaves of absence, meal or rest breaks, employment (including, but not limited to, any claims concerning harassment, discrimination, or retaliation), termination of employment, conversion, breach of contract or covenant (express or implied), or breach of fiduciary duty; any tort claims; any common law claims; any statutory claims; any equitable claims; and/or any claims for declaratory relief.

(Id. at ¶ 2). While Plaintiff does not mention the Agreement in his complaint, Defendants filed a counterclaim seeking an order declaring that Plaintiff must resolve his claims through arbitration, and also seeking an order from this Court (not the arbitrator) that Plaintiff is prevented from proceeding with a class/collective action due to the class action waiver in the Agreement. (See Dkt. 10 at 19).

Plaintiff's counsel has indicated that he was unaware of the existence of the Agreement at the commencement of this action. Upon learning of the Agreement, Plaintiff's counsel filed an NLRB "Charge Against Employer" complaint (the "Charge") on or about September 1, 2016, claiming that Defendants had interfered with Plaintiff's rights under Section 7 of the National Labor Relations Act, 29 U.S.C. § 157 ("NLRA"), by including a class action waiver in the Agreement and attempting to enforce it. (Dkt. 15–5). The NLRB began an investigation into the basis of the Charge on September 2, 2016, (Dkt. 15–6), but the investigation has been stayed pending a forthcoming decision by the Supreme Court on the validity of class/collective action waivers in arbitration agreements under the NLRA.

On October 3, 2016, Plaintiff filed a motion to dismiss targeting Defendants' counterclaim, together with a motion to stay the proceeding pending an administrative investigation by the NLRB. (Dkt. 15). Specifically, Plaintiff argued that Defendants' request for declaratory relief was barred by the Agreement, which removed subject matter jurisdiction from this Court for any claims for declaratory relief and placed it before the arbitrator. (Dkt. 15–7 at 5–7). Defendants opposed Plaintiff's motions. (Dkt. 22).

On October 4, 2016, Defendants filed a motion to compel individual arbitration, stay this action, and strike all class/collective claims from the complaint. (Dkt. 17). Specifically, Defendants contended that Plaintiff's FLSA, NYLL, and common law claims must be arbitrated or litigated through arbitration according to the terms of the Agreement, that this action should be stayed pending the resolution of arbitration, and that Plaintiff's class action allegations should be struck from the complaint due to the valid and enforceable class action waiver in the Agreement. (Dkt. 18 at 7–10). Plaintiff opposed this motion. (Dkt. 24).

On October 25, 2016, Plaintiff filed a motion to voluntarily dismiss this action pursuant to Rule 41(a)(2) of the Federal Rules of Civil Procedure. (Dkt. 23–1). Plaintiff indicated that he wished "to vindicate his rights through the NLRB and arbitration." (Id. at 10). Defendants opposed this motion claiming that Plaintiff was attempting to circumvent a judicial ruling on the validity and enforceability of the class action waiver. (Dkt. 36 at 4–5).

On or about December 30, 2016, Plaintiff filed a class action arbitration demand (the "Demand") seeking to initiate arbitration proceedings before the American Arbitration Association ("AAA"). (Dkt. 41–2; see Dkt, 41–1 at ¶ 4). Plaintiff named Defendants and V & J Employment as the arbitration respondents ("Respondents"), and made substantially similar allegations and requests for relief as set forth in the complaint. On December 30, 2016, Plaintiff's counsel emailed a copy of the Demand to Defendants' counsel. (Dkt. 41–1 at ¶ 5).

On January 9, 2017, the AAA sent correspondence to Plaintiff and V & J Holding, indicating that the Demand had been filed and requesting submission of the Agreement. (Dkt. 41–3). On January 12, 2017, the AAA sent another letter to the same addresses, indicating that it had received the Agreement and requesting that Plaintiff and Respondents submit the required filing fees of $200, and $1,500, respectively, by January 23, 2017. (Dkt. 41–4). On January 23, 2017, a third letter was sent, indicating that the AAA had received Plaintiff's filing fee, but that Respondents' filing fee had yet to be paid. (Dkt. 41–5). Payment was requested for February 7, 2017. (Id. ). The AAA subsequently sent three additional letters, on February 8, 2017, February 27, 2017, and March 30, 2017, indicating that Respondents had yet to pay the requisite filing fee. (Dkt. 41–6; Dkt. 41–7; Dkt. 41–8).

On April 7, 2017, the AAA sent a final correspondence indicating that it had administratively terminated the proceeding due to Respondents' failure to submit the filing fee, and that the AAA would "decline to administer any future employment matter involving" Respondents. (Dkt. 41–9).1 On the same day, Plaintiff filed a third motion, which sought leave to file a supplemental declaration and sought to withdraw his motion for voluntary dismissal. (Dkt. 41). On April 11, 2017, the Court granted Plaintiffs request to withdraw his motion for voluntary dismissal. (Dkt. 42). Plaintiff's counsel submits his supplemental declaration together with the AAA correspondences to argue that Defendants' failure to participate in the AAA proceeding prior to the date of its administrative termination amounted to a waiver of Defendants' right to compel arbitration and a breach of the Agreement's terms. (Dkt. 41–10 at 7–9). Defendants have submitted papers in response to the supplemental affidavit. (Dkt. 47).

On August 14, 2017, the Court held oral argument on the pending motions. (...

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    • University of Pennsylvania Law Review Vol. 171 No. 2, January 2023
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