Lawrence v. N.Y.C Med. Practice

• Docket Number: 1:18-cv-8649-GHW
• Decision Date: 21 July 2023
• Parties: KEYLEE LAWRENCE, Individually and on behalf of all others similarly situated, et al., Plaintiffs, v. NYC MEDICAL PRACTICE, P.C., d/b/a Goals Aesthetics and Plastic Surgery, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

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KEYLEE LAWRENCE, Individually and on behalf of all others similarly situated, et al., Plaintiffs, v. NYC MEDICAL PRACTICE, P.C., d/b/a Goals Aesthetics and Plastic Surgery, et al., Defendants.

No. 1:18-cv-8649-GHW

United States District Court, S.D. New York

July 21, 2023

MEMORANDUM ORDER AND OPINION

GREGORY H. WOODS, United States District Judge:

In 2018, four employees of a New York plastic-surgery practice filed suit against their employer, alleging that it had violated various provisions of the Fair Labor Standards Act (the “FLSA”) and the New York Labor Law (the “NYLL”). After a lengthy and contentious discovery period, Plaintiffs were ultimately able to certify a collective action under the FLSA and a class action under Federal Rule of Civil Procedure 23. Defendants-Plaintiffs' former employer and that employer's sole shareholder-now move for summary judgment as to Plaintiffs' claims or, in the alternative, to compel arbitration as to members of Plaintiffs' class that had previously signed arbitration agreements.

Because Plaintiffs' have met what is an admittedly low burden at this stage to advance their failure-to-pay-overtime claims to trial, but have failed to defend their remaining claims Defendants' motion for summary judgment will be GRANTED IN PART. Additionally, because Plaintiffs cannot show that the relevant arbitration agreements are unconscionable or that they have been waived, Defendants' motion to compel arbitration will be GRANTED.

I. BACKGROUND AND PROCEDURAL HISTORY^[1]

The background facts of this case are set forth in detail in the Court's May 20, 2021 decision granting Plaintiffs' motion to certify an FLSA collective and a Rule 23 class action. See Dkt. No. 139 at 2-3. As explained in that order, Plaintiffs here were employees of NYC Medical Practice P.C., which conducts business under the name GOALS Aesthetics and Plastic Surgery. Id. at 2. In addition to GOALS, the other Defendant in this case is GOALS' sole shareholder, physician Sergey Voskin. Id.

Plaintiffs assert that while working for GOALS, they were required to work more than ten hours in a single day and more than forty hours per week. See Dkt. No. 126-2 (Deposition of Keylee Lawrence, or “Lawrence Depo.”) at 66:15-17 (asserting that she worked at least forty-five hours per week); Dkt. No. 126-6 (Deposition of Courtney Braccia, or “Braccia Depo.”) at 32:17-21 (asserting that she worked sixty hours per week); Dkt. No. 126-4 (Declaration of Bria Warner, or “Warner Decl.”) ¶ 3 (asserting that she worked at least forty-five hours per week); Dkt. No. 126-7 (Declaration of Wendy Rosado, or “Rosado Decl.”) ¶ 4 (asserting that she worked at least sixty hours per week, and “often more”). Plaintiffs do not dispute that Defendants properly compensated them and similarly situated employees for at least some of that overtime work. See Dkt. No. 218 (“Plaintiffs' 56.1 Response”) ¶¶ 2, 12, 19, 29 (not disputing the overtime payments made to various employees). Instead, they contend that Defendants' time records were faulty or manipulated such that Plaintiffs were never paid for all of the overtime to which they were entitled. See Warner Decl. ¶¶ 4-5 (stating that the timekeeping equipment often malfunctioned, that GOALS manipulated its timekeeping equipment, and that the time records never matched the weekly timesheets); Dkt. No. 126-3 (Declaration of April Bobyn, or “Bobyn Decl.”) ¶ 7 (stating that GOALS failed to accurately keep overtime records); Braccia Depo. at 35:18-36:12 (providing testimony concerning manipulation of time records).

Plaintiffs filed their active complaint in this case on September 25, 2018. Dkt. No. 5 (“Compl.”). It includes six claims-four for alleged violations of the overtime provisions of the FLSA and the NYLL, one for alleged violations of the NYLL's spread of hours provision, and one for alleged violations of the NYLL's commission-regulating provisions. Id. The complaint also indicated that the Plaintiffs intended to certify the case as a Rule 23 class action and a collective action under the FLSA. Id. at 18.

Shortly after Plaintiffs filed their compliant, GOALS instituted a policy in October 2018 pursuant to which all employees “executed an agreement with an arbitration clause including a class and collective action waiver.” Dkt. No. 162 at 2. The text of most of those arbitration agreements reads, as relevant:

AGREEMENT TO ARBTIRATE ANY CLAIMS. READ THE FOLLOWING ARBITRATION PROVISION CAREFULLY, IT LIMITS YOUR RIGHTS, INCLUDING THE RIGHT TO MAINTAIN A COURT ACTION.

The Employer and Employee agree to arbitrate any claim, dispute, controversy, including all statutory claims and any state or federal claims, that may arise out of relate to Employee's employment with Employer including all state or federal wage payment laws.... The parties also agree to: (1) waive any right to pursue any claims arising under this agreement or related to any dispute between Employer and Employee, including statutory, state or federal claims, as a class or collective action arbitration; or (2) to have an arbitration under this agreement consolidated with any other arbitration or proceeding....

THIS ARBITRATION PROVISION LIMITS YOUR RIGHTS, INCLUDING YOUR RIGHT TO MAINTAIN A COURT ACTION. PLEASE READ IT CAREFULLY PRIOR TO SIGNING.

Dkt. No. 208-3 § 15; Dkt. No. 208-5 § 15; Dkt. No. 208-6 § 15; Dkt. No. 208-7 § 15; Dkt. No. 208-8 § 15 (italics emphasis added for all citations).^[2] Because Plaintiffs elected not to pursue conditional class certification, the parties proceeded through discovery before Plaintiffs moved to certify their FLSA collective and Rule 23 class. See Dkt. No. 139 at 7. During that discovery period, as part a different case in front of a different court, two individuals who would later become part of the class in this case-Natasha Lubrano and Chrismary Rodriguez-entered into a court-approved settlement agreement by which they “voluntarily, irrevocably and unconditionally release[d] . . . any claims they [had], or may have, against Goals” and related entities. Dkt. No. 208 ¶¶ 5-7.

After discovery concluded and the Court granted class certification on May 20, 2021, see Dkt. No. 139 at 24, the parties began discussing the process by which notice of the case would be sent to putative class members. See, e.g., Dkt. No. 143 (Court order concerning the notice and consent forms). On July 5, 2021, at the tail end of these discussions, Defendants raised the prospect that some potential class members may have signed arbitration agreements waiving their right to participate in any class or collective action. Dkt. No. 162 at 2. This was the first time that the existence of the arbitration agreements was made known to the Court, though Defendants contend that they notified Plaintiffs of the agreements and their possible relevance earlier in the discovery period. See Dkt. No. 173 at 13:12-18.

In an October 7, 2021 oral opinion, the Court declined to limit the scope of class notice to exclude anyone who had potentially signed an arbitration agreement. Id. at 17-20. But it noted its intent to “put in place a process” to allow the Defendants to engage in motion practice concerning the arbitration agreements if they could show, after the period to join the class concluded, that one or more members of the class had signed such an agreement. Id. at 18:3-4; see also id. at 19:19-21 (noting that Defendants could later “seek to compel arbitration and dismiss the claims of any plaintiffs with valid arbitration agreements who later join these actions”). Then, after class notices were sent and returned, the Court reopened discovery on March 16, 2022 for the limited purpose of permitting an exchange of information (and additional discovery) about the opt-in members of the collective action and which class members had entered into arbitration agreements; that discovery window closed on June 8, 2022. Dkt. No. 189.

About a month-and-a-half after that discovery period concluded, Defendants filed a letter on July 20, 2022 requesting to file three motions: a motion for summary judgment, a motion to compel arbitration as to class members who had entered into arbitration agreements, and a motion to decertify the class. Dkt. No. 197. After an August 9, 2022 conference, the Court granted Defendants' request in part, permitting them to file their motions for summary judgment and to compel arbitration (but not the proposed motion to decertify). Dkt. No. 203. Defendants filed both motions on October 11, 2022, and filed a related motion to seal the next day. See Dkt. No. 206 (motion to compel arbitration); Dkt. No. 207 (memorandum of law in support, or “Defs' Arb. Mem.”); Dkt. No. 209 (motion for summary judgment); Dkt. No. 210 (memorandum of law in support, or “Defs' MSJ Mem.”); Dkt. No. 215 (motion to seal). Plaintiffs responded to the motions for summary judgment and to compel arbitration on November 10, 2022. See Dkt. No. 216 (Plaintiffs' memorandum of law opposing the arbitration motion, or “Pls' Arb. Opp.”); Dkt. No. 217 (Plaintiffs' memorandum of law opposing the summary-judgment motion, or “Pls' MSJ Opp.”). And Defendants replied in support of both motions on November 25, 2022. See Dkt. No. 219 (Defendants' reply in support of the arbitration motion, or “Arb. Reply”); Dkt. No. 220 (Defendants' reply in support of the summary-judgment motion, or “MSJ Reply”).

II. LEGAL STANDARD

A. Motion for Summary Judgment

Summary judgment is appropriate when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Celotex Corp. v Catrett, 477 U.S. 317, 322 (1986) (“[S]ummary judgment is proper ‘if the pleadings, depositions, answers to...