Keller v. About, Inc.

• Decision Date: 05 May 2021
• Docket Number: 21-CV-228 (JMF)
• Parties: JACKELYN KELLER, Plaintiff, v. ABOUT, INC. d/b/a DOTDASH, Defendant.
• Court: U.S. District Court — Southern District of New York

JACKELYN KELLER, Plaintiff, v. ABOUT, INC. d/b/a DOTDASH, Defendant.

21-CV-228 (JMF)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

May 5, 2021

OPINION AND ORDER

JESSE M. FURMAN, United States District Judge:

Plaintiff Jackelyn Keller brings claims against her former employer About, Inc., which does business as — and will be referred to here as — Dotdash, under the Family and Medical Leave Act, 29 U.S.C. §§ 2601 et seq. ("FMLA"); Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. ("Title VII"); Section 1981 of the Civil Rights Act of 1866, 42 U.S.C. § 1981 ("Section 1981"); the New York State Human Rights Law, N.Y. Exec. Law §§ 290 et seq. ("NYSHRL"); the New York City Human Rights Law, N.Y.C. Admin. Code §§ 8-101 et seq. ("NYCHRL"); the federal Equal Pay Act, 29 U.S.C. § 206(d) ("EPA"); and the New York State Pay Equity Law, N.Y. Lab. Law §§ 194 et seq. ("NYSPEL"). Dotdash now moves, pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 4, to compel arbitration and for sanctions. ECF No. 9. For the reasons that follow, the motion to compel is granted and the motion for sanctions is denied.

MOTION TO COMPEL ARBITRATION

The Court begins with Dotdash's motion to compel arbitration. That motion is based on Keller's Employment Agreement with Dotdash, a three-page offer letter she signed in February 2016, that provides in relevant part, that

all claims, disputes or controversies arising out of, concerning, or relating to your employment relationship, including claims concerning wages or compensation, benefits or other terms and conditions of employment, or any other claims whether arising by statute or otherwise, shall be fully and finally resolved by mandatory, binding arbitration conducted by JAMS . . . pursuant to JAMS['s] then-current Employment Arbitration Rules and Procedures. Your agreement to arbitrate applies to all employment-related claims, including, but not limited to, claims arising under the Fair Labor Standards Acts, Title VII of the Civil Rights Act as amended, the Equal Pay Act, the Pregnancy Discrimination Act, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the New York Labor Law, the New York Human Rights Law, the New York City Administrative Code, or any other federal, state or local employment or discrimination laws, rules, regulations, ordinances, including wage and hour laws, or any common law claims. . . . [Dotdash] will bear the administrative costs and arbitrator fees, and that [sic] the arbitrator in such action may award whatever remedies would be available to the parties in a court of law. You understand and agree that you are waiving your right to pursue a jury trial or seek attorneys' fees in a civil action, or to commence, be a party to or an actual or putative class member of any class or collective action arising out of or relating to your employment with [Dotdash] by virtue of this Binding Arbitration provision, and further agree that any claim, controversy or dispute must be submitted or raised within six (6) months of the time when the event or occurrence giving rise to the dispute arose or will be waived by you.

ECF No. 11-1 ("Employment Agreement"), § 4; see also ECF No. 11, ¶¶ 5-6.

Notably, Keller does not dispute that her claims in this case fall within the scope of this broad arbitration clause. See ECF No. 16 ("Pl.'s Opp'n"), at 2. Instead, she opposes arbitration on the ground that the arbitration clause is unconscionable and therefore unenforceable. See id. at 4-14. In particular, Keller contends — relying on New York law — that the clause is "grossly substantively unconscionable, and therefore unenforceable," for two reasons: first, because it "shortens the limitations periods for [her] claims in violation of applicable law" and, second, because it "interferes with [her] ability to recover statutorily authorized damages." Pl.'s Opp'n6.¹ In its reply, however, Dotdash agrees to waive the fee-shifting provisions as well as the six-month limitations provision as it pertains to Keller's federal EPA claim. See ECF No. 22 ("Def.'s Reply"), at 1. "New York courts have accepted offers by parties to waive the enforcement of certain provisions of arbitration agreements, and have evaluated those agreements as modified by the parties' after-the-fact waivers. . . . Because unconscionability is an equitable defense to the enforcement of harsh or unreasonable contract terms, a party cannot complain when the defendant through its waivers declines to enforce any potentially unconscionable term." Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115, 124 (2d Cir. 2010) (citation omitted). Accordingly, whether the arbitration clause is enforceable turns on whether application of the six-month limitations period to Keller's non-EPA claims is unconscionable.

"Under New York law, '[a]n unconscionable contract has been defined as one which is so grossly unreasonable or unconscionable in the light of the mores and business practices of the time and place as to be unenforceable according to its literal terms.'" McFarlane v. Altice USA, Inc., No. 20-CV-1297 (JMF), 2021 WL 860584, at *8 (S.D.N.Y. Mar. 8, 2021) (quoting Gillman v. Chase Manhattan Bank, N.A., 73 N.Y.2d 1, 10 (1988)). "A determination of unconscionability generally requires a showing that the contract was both procedurally and substantively unconscionable when made — i.e., some showing of an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonablyfavorable to the other party." Gillman, 73 N.Y.2d at 10 (internal quotation marks omitted). "The procedural element of unconscionability requires an examination of the contract formation process and the alleged lack of meaningful choice. The focus is on such matters as the size and commercial setting of the transaction, whether deceptive or high-pressured tactics were employed, the use of fine print in the contract, the experience and education of the party claiming unconscionability, and whether there was disparity in bargaining power." Id. at 10-11 (citation omitted); accord Dallas Aerospace, Inc. v. CIS Air Corp., 352 F.3d 775, 787 (2d Cir. 2003). In "exceptional cases," however, a provision of a contract can be "so outrageous as to warrant holding it unenforceable on the ground of substantive unconscionability alone." Gillman, 73 N.Y.2d at 12.

Measured against these standards, Keller's arguments fall short. First, she fails to offer sufficient evidence of procedural unconscionability. Keller is an accomplished and well-educated executive. Compl. ¶¶ 17-18; see, e.g., Chen-Oster v. Goldman, Sachs & Co., 449 F. Supp. 3d 216, 242 (S.D.N.Y. 2020) (explaining that advanced degrees and high compensation are "both indicative of sophistication for purposes of entry into contract" with an arbitration provision). She points to no high-pressure tactics or disparity in bargaining power. Moreover, "neither the FAA nor New York law precludes the enforcement of employment contracts 'which make employment conditional upon an employee's acceptance of mandatory arbitration.'" Am. Fam. Life Assurance Co. of N.Y. v. Baker, 778 F. App'x 24, 27 (2d Cir. 2019) (summary order) (quoting Ragone, 595 F.3d at 121-22). And contrary to Keller's assertions, the Employment Agreement does not "'bury[]' important information." Pl.'s Opp'n 12. The Agreement as a whole is only three pages long, and the arbitration clause is contained in a section that states — in bold and all capital letters, no less — "BINDING ARBITRATION AND WAIVER OFRIGHT TO PARTICIPATE IN CLASS ACTIONS." Employment Agreement § 4; see, e.g., Baker, 778 F. App'x at 27 ("[T]he arbitration-related provisions at issue here are not deceptive or located in fine print. . . . [O]n the signature page underlined in all-capital type the Agreement states: 'THIS CONTRACT CONTAINS AN ARBITRATION AGREEMENT WHICH MAY BE ENFORCED BY THE PARTIES.'" (internal quotation marks omitted)); Carr v. Credit One Bank, No. 15-CV-6663 (LAK), 2015 WL 9077314, at *3 (S.D.N.Y. Dec. 16, 2015) ("This arbitration clause was clear, conspicuous, and preceded by a heading written in all capital letters and bold print. . . . Accordingly, plaintiff's unconscionability argument is rejected.").

Nor does Keller demonstrate that the arbitration clause, as modified by Dotdash's waiver, is substantively unconscionable. Keller first argues that the Employment Agreement did not provide sufficient notice of the federal claims to which the six-month limitations period would apply. See Pl.'s Opp'n 6-7 & n.4. But that is not the case: Just a few lines above the provision pertaining to the limitations period, the arbitration clause explicitly lists the FLSA, Title VII, the EPA, and "any other federal . . . employment or discrimination laws, rules, regulations, ordinances, including wage and hour laws," as examples of the employment-related claims covered by its terms. Employment Agreement § 4. The Employment Agreement is thus distinguishable from the vague language at issue in the cases upon which Keller relies. See Falberg v. Goldman Sachs Grp., Inc., No. 19-CV-9910 (ER), 2020 WL 7695711, at *1 (S.D.N.Y. Dec. 28, 2020) (referencing "a claim or action . . . that relates to the Plan and seeks a remedy, ruling or judgment of any kind against the Plan or a Plan fiduciary or party in interest" (internal quotation marks omitted)); Friedmann v. Raymour Furniture Co., No. 12-CV-1307 (LDW) (AKT), 2012 WL 4976124, at *2 (E.D.N.Y. Oct. 16, 2012) (referencing "any claim or lawsuit relating to my service with" the employer (internal quotation marks omitted)); Vega v.Fed. Express Corp., No. 09-CV-7637 (RJH) (GWG), 2011 WL 4494751, at *1 (S.D.N.Y. Sept. 29, 2011) (referencing a "complaint" "[t]o the extent the law allows an employee to bring legal action" (internal quotation marks omitted)).

Keller's argument that the New York statutes pursuant to which she brings her state-law claims do not...