Charter Commc'ns, Inc. v. Derfert
| Decision Date | 04 January 2021 |
| Docket Number | Case No. 1:20-cv-915 |
| Citation | 510 F.Supp.3d 8 |
| Parties | CHARTER COMMUNICATIONS, INC., Petitioner, v. Lynda M. DERFERT, Respondent, and New York State Division of Human Rights, Respondent-Intervenor. |
| Court | U.S. District Court — Western District of New York |
Kimberley E. Lunetta, Samuel S. Shaulson, Dana A. Brady, Pro Hac Vice, Morgan, Lewis & Bockius LLP, New York, NY, for Petitioner.
Erin M. Sobkowski, NYS Division of Human Rights, Buffalo, NY, for Respondent-Intervenor.
Lynda M. Derfert, Cheektowaga, NY, pro se.
ORDER ON PETITIONER'S MOTION TO COMPEL ARBITRATION AND TO ENJOIN RESPONDENT FROM PURSUING CLAIMS OUTSIDE OF ARBITRATION AND ON RESPONDENT-INTERVENOR'S MOTION TO DISMISS PETITIONER'S SECOND CLAIM FOR INJUNCTIVE RELIEF
On June 11, 2018, Lynda M. Derfert filed a complaint with the New York State Division of Human Rights ("NYSDHR" or the "Division") asserting an employment-discrimination claim against Charter Communications, Inc. ("Charter") based on allegations that Charter discriminatorily rescinded a conditional offer of employment due to Ms. Derfert's arrest and conviction records. (See Doc. 1 ¶ 18; see also Doc. 3-3 (NYSDHR Verified Complaint).) Relying on a Mutual Arbitration Agreement that Ms. Derfert agreed to after receiving the conditional employment offer (see Docs. 3-15, 3-16), Charter has filed in this court a Petition to Compel Arbitration, naming Ms. Derfert as the Respondent. (Doc. 1.)
Simultaneously with its July 17, 2020 Petition, Charter filed a "Motion to Compel Arbitration and to Enjoin Respondent from Pursuing Claims Outside of Arbitration." (Doc. 3.) That motion is currently pending. Also pending is Respondent-Intervenor NYSDHR's "Motion to Dismiss Petitioner's Second Claim for Injunctive Relief." (Doc. 15.) Ms. Derfert, who represents herself, has not filed any papers taking a position on the pending motions.
Charter's Petition includes the following allegations. On or about September 20, 2017, Ms. Derfert applied for a position with Charter as a Customer Care Representative I. (Doc. 1 ¶ 12.) The application asked, among other things, whether she would complete a pre-employment drug test and background check after receiving and accepting an offer of employment. Ms. Derfert responded that she would. (Id. ) On or about October 17, 2017, Ms. Derfert received a conditional offer of employment at Charter, contingent upon, among other things, passing a drug test and background check. (Id. ¶ 13.)
Charter's consideration of Ms. Derfert for employment was also contingent upon her acceptance of Charter's Mutual Arbitration Agreement (the "Arbitration Agreement" or "Agreement"), which she entered into on October 17, 2017. (Id. ¶ 14.) The Agreement provides that all "Covered Claims" will be resolved by final and binding arbitration. (Id. ¶ 15.) "Covered Claims" include "[a]ll disputes, claims, and controversies ... related to [Respondent's] pre-employment, employment, employment termination, or post-employment." (Id. (alterations in original).) "Covered Claims" also include "statutory claims (whether under local, state or federal law) ... including without limitations claims for ... unlawful failure to hire ... unlawful discrimination ... [and] claims related to background and any and all other pre-employment and employment checks." (Id. (alterations in original).) The Agreement permits Ms. Derfert to file and pursue claims before federal, state, or local administrative agencies, but it explicitly provides that "if [Respondent] choose[s] to pursue the [administrative] claim, any proceeding on the merits or for damages will be subject to arbitration." (Id. ¶ 16 (alterations in original).)
On November 9, 2017, relying on the information in Ms. Derfert's Background Report provided by a third-party background-check vendor, and considering the factors in Article 23-A of the New York Corrections Law, Charter rescinded the conditional offer of employment. (Id. ¶ 17.)
On June 11, 2018, Ms. Derfert filed a complaint with the NYSDHR, asserting a claim of unlawful discrimination under Section 296 of the New York State Human Rights Law, and alleging that Charter discriminatorily rescinded the conditional employment offer on the basis of Ms. Derfert's arrest and conviction records. (Id. ¶ 18; see also Doc. 3-3 (NYSDHR Verified Complaint).) The title and caption of the Verified Complaint read as follows:
NEW YORK STATE
DIVISION OF HUMAN RIGHTS
NEW YORK STATE DIVISION OF
HUMAN RIGHTS on the Complaint of
LYNDA M. DERFERT, VERIFIED COMPLAINT
Complainant, Pursuant to Executive Law
Article 15
v
Case No
CHARTER COMMUNICATIONS, 10195081
INC
Respondent
(Doc. 3-3 at 2.) Ms. Derfert signed a "Notarization of Complaint" stating "I charge the herein named respondent(s) with an unlawful discriminatory practice" and authorizing NYSDHR to "accept this complaint on behalf of the U.S. Equal Employment Opportunity Commission." (Id. at 29.)
On September 25, 2018, Charter submitted a position statement to NYSDHR that, among other things, attached a copy of the Agreement and notified Ms. Derfert and NYSDHR of Ms. Derfert's alleged "obligation to arbitrate should the matter proceed to an adjudication on the merits." (Doc. 1 ¶ 19.) On December 4, 2018, NYSDHR issued a "probable cause" determination and recommended the matter for a public hearing. (Id. ¶ 20; see also Doc. 3-5.)
On or about March 10, 2020, Charter received a notice from NYSDHR ordering Charter to appear on April 15–16, 2020 for a two-day hearing on the merits. (Doc. 1 ¶ 21.) On or about March 31, 2020, Charter received an email from NYSDHR's Chief Calendar Clerk advising that the hearing scheduled for April 15–16, 2020 had been adjourned and that Charter would receive a new hearing date. (Id. ¶ 22.) In a letter dated April 9, 2020, Charter notified Ms. Derfert of Charter's position that the claim she asserted in the NYSDHR proceeding was subject to mandatory arbitration under the Agreement. (Id. ¶ 27; see also Doc. 3-8.)
On or about June 16, 2020, Charter received a notice from the Chief Calendar Clerk advising that the matter was scheduled for a preliminary conference before an administrative law judge ("ALJ") on July 13, 2020. (Doc. 1 ¶ 23.) The notice stated that "the parties should be prepared to discuss the legal and factual issues in the case, the documentary evidence in their control which is to be offered in evidence, and proposed witnesses." (Id. )
NYSDHR later rescheduled the preliminary conference for August 4, 2020. (Id. ¶ 24.) On July 15, 2020, Charter's counsel spoke with NYSDHR's counsel, Neil Zion, who indicated that the hearing on the merits was projected to take place in September 2020. (Id. ¶ 25.)
Ms. Derfert has refused to withdraw the discrimination claim she filed with the NYSDHR (Id. ¶ 28.) Charter filed its Petition in this court on July 17, 2020. (Doc. 1.) Charter seeks an order under 9 U.S.C. § 4 compelling Ms. Derfert to arbitrate her pending discrimination claim. (Id. at 7.) Charter further seeks an order "for temporary, preliminary, and permanent injunctive relief enjoining Respondent from pursuing a claim for employment discrimination in any forum outside or arbitration under the Agreement." (Id. )
Simultaneously with its July 17, 2020 Petition, Charter filed a "Motion to Compel Arbitration and to Enjoin Respondent from Pursuing Claims Outside of Arbitration." (Doc. 3.) The court held a hearing on that motion on July 29, 2020. (See Doc. 16 (transcript).) At that hearing, with the agreement of Charter and Ms. Derfert, the court issued a temporary restraining order requiring NYSDHR to postpone its proceeding until the court received briefing and had an opportunity to rule on Charter's motion. The court also permitted NYSDHR to intervene and to offer briefing regarding its jurisdiction to proceed in the face of the arbitration Agreement.
On August 19, 2020, NYSDHR filed its "Motion to Dismiss Petitioner's Second Claim for Injunctive Relief." (Doc. 15.) Charter filed an opposition on September 10, 2020. (Doc. 22.) NYSDHR filed its reply on September 17, 2020. (Doc. 24.) Charter filed a sur-reply on September 21, 2020. (Doc. 28.)
Charter's Petition and its pending motion to compel and enjoin both seek: (1) an order under the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("FAA"), compelling Ms. Derfert to arbitrate her pending discrimination claim (Charter's "Compel Claim"), and (2) an order under Fed. R. Civ. P. 65 enjoining Ms. Derfert from pursuing the adjudication of that claim outside of arbitration (Charter's "Enjoin Claim"). (See Doc. 1 at 7; Doc. 3-1 at 18.) NYSDHR states that it takes no position as to "whether Charter will succeed on the merits of their petition to compel arbitration" under the FAA. (Doc. 15-9 at 20.) But NYSDHR seeks dismissal under Fed. R. Civ. P. 12(b)(6) of the Enjoin Claim. (See Doc. 15 at 2.) In short, NYSDHR does not oppose an arbitration proceeding between Charter and Ms. Derfert, but NYSDHR maintains that Charter cannot prevent a parallel NYSDHR proceeding to "investigat[e] or enforc[e] the Human Rights Law on the complaint of Derfert." (Doc. 15-9 at 5.) The court accordingly begins with Charter's Enjoin Claim.
NYSDHR maintains that granting the Enjoin Claim "would have the effect of interfering with the agency's ability to conduct an administrative hearing on the merits of Derfert's complaint." (Doc. 15-9 at 5.) NYSDHR asserts that it is not a party to the Arbitration Agreement and that it has the power under New York statutory law to proceed on Ms. Derfert's complaint. (Id. at 7, 16.) NYSDHR further contends that Charter has not satisfied the requirements for granting a permanent injunction. (Id. at 19.) In support, NYSDHR relies on EEOC v. Waffle...
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