Lesser v. TIAA Bank, FSB
| Decision Date | 21 May 2020 |
| Docket Number | 19-cv-1707 (AJN) |
| Parties | Lori Lesser, et al., Plaintiffs, v. TIAA Bank, FSB, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Current and former employees of TIAA Bank bring this action under the Federal Labor Standards Act (FLSA) and analogous state-law statutes. Defendant TIAA Bank has moved to compel arbitration as to two named Plaintiffs' claims arising before December 1, 2016, pursuant to arbitration agreements between TIAA and these two parties. TIAA Bank also asks to stay this entire litigation pending the arbitration of these claims. For the reasons that follow, the Court GRANTS TIAA's motion to compel arbitration but DENIES its request for a stay.
Unless otherwise noted, the following facts are undisputed. TIAA "is [a] federally chartered bank" that "does business across the United States of America, including, but not limited to, regularly conducting business in the States of New York, Florida, and New Jersey." Complaint, Dkt. No. 2, ¶ 15. Plaintiffs in this action are Richard Martin, Lori Lesser, Lediana Llerena, and David Gutfeld. All four individuals either worked or currently work for TIAA Bank or its predecessor, Everbank, as Retail Loan Officers (RLOs) in these three states. Id. ¶¶ 10-13, 45. Their primary duty was to sell residential mortgage loans. Id. ¶ 50. TIAA paid them "in part [or] in whole in commissions." Id. ¶ 46.
TIAA provided the terms of RLOs' compensation in documents titled Performance Guides. As TIAA explains, "[t]he purpose and scope of the Performance Guides was to enumerate" the compensation of these employees. TIAA Br., Dkt. No. 40-1, at 3. The Guides therefore describe things like these employees' "(a) . . . cash commission opportunities; (b) the method for calculation of cash commission compensation; (c) the timing for payment of cash commission compensation; (d) applicable performance standards; and (e) other procedures and requirements for which the [RLO] is responsible." Id.; see, e.g., Dkt. No. 44, Ex. A (2013 Guide).
These Performance Guides did not remain consistent throughout Plaintiffs' employment at TIAA; instead, they were subject to periodic revision. Before the Court are four Guides, respectively issued in 2013, 2014, 2016, and 2018. See Dkt. No. 44, Ex. A (2013 Guide); Dkt. No. 44, Ex. B (2014 Guide); Dkt. No. 44, Ex. C (2016 Guide); Dkt. No. 44, Ex. D (2018 Guide). For purposes of this case, the 2013 and 2014 Guides differ from those issued in 2016 and 2018 in one material respect: the former contain an arbitration clause, and the latter do not. Both the 2013 and 2014 Guides contained the following provision:
2013 Guide at 13; 2014 Guide at 27. In 2016, however, TIAA removed this arbitration provision from its new Performance Guide. See 2016 Guide. The 2018 Guide likewise did not contain an arbitration provision. See 2018 Guide.
The history of the parties' litigation begins in arbitration. In September 2018, three former RLOs—including one of the Plaintiffs here, Llerena—filed a demand for arbitration with the American Arbitration Association against TIAA. See Dkt. No. 44, Ex. G. They alleged the same wage-and-hour claims as the ones here. See id. ¶¶ 34-41. The next month, TIAA filed an answer to the demand. The parties then entered into two stipulations, both of which are central to this litigation. See Dkt. No. 44, Ex. H (First Stipulation); Dkt. No. 44, Ex. I (Second Stipulation). The Court discusses each stipulation in detail below. These claims are still being arbitrated.
Plaintiffs filed this action on February 22, 2019. See Dkt. No. 1. They allege that TIAA misclassified them as outside sales employees, thus exempting them from the protection of various labor laws. Under the proper classification, they allege, they are owed backpay for wages and overtime. They therefore bring suit under the Federal Labor Standards Act and analogous New York and New Jersey statutes. Compl. ¶¶ 72-95. Plaintiffs seek to certify a collective and a class of all Residential Loan Officers who worked for TIAA nationwide. Id. ¶ 19. Plaintiffs Martin and Lesser purport to represent a subclass of those RLOs who worked in New York, and Plaintiff Gutfeld those RLOs who worked in New Jersey. Id. ¶¶ 27, 36. About 40 additional RLOs have filed Consent Forms to join this lawsuit. See Filed Consent Forms, Dkt. Nos. 22, 27, 36, 48, 49, 50.
On July 3, 2019, TIAA moved to compel arbitration as to a subset of Plaintiffs' claims and stay this entire proceeding in the interim. Specifically, TIAA requests that the Court mandate arbitration as to Lesser and Gutfeld's claims arising before December 1, 2016. It does not seek arbitration of Lesser and Gutfeld's claims arising after that date, or arbitration of any ofthe other two Plaintiffs' claims. This motion is now before the Court.
The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., embodies a national policy favoring arbitration based on the desire to preserve the parties' ability to arbitrate, not litigate, their disputes. Doctor's Assocs., Inc. v. Alemayehu, 934 F.3d 245, 250 (2d Cir. 2019). Any doubts concerning the scope of arbitrable issues must be resolved in favor of arbitration. Holick v. Cellular Sales of New York, LLC, 802 F.3d 391, 395 (2d Cir. 2015); accord Coscarelli v. ESquared Hosp. LLC, 364 F. Supp. 3d 207, 215 (S.D.N.Y. 2019). In determining whether an action is arbitrable, a court must consider (1) whether the parties agreed to arbitrate and, if so, (2) whether the scope of the arbitration agreement encompasses the claims at issue. Holick, 802 F.3d at 394; Schnabel v. Trilegiant Corp., 697 F.3d 110, 118 (2d Cir. 2012) (); accord Coscarelli, 364 F. Supp. 3d at 215. These threshold questions are determined by "state contract law principles." Nicosia v. Amazon.com, Inc., 834 F.3d 220, 229 (2d Cir. 2016).
In deciding a motion to compel arbitration, courts apply a "standard similar to that applicable for a motion for summary judgment." Id. Courts must "consider all relevant, admissible evidence submitted by the parties and contained in pleadings, depositions, answers to interrogatories, and admissions on file, together with . . . affidavits," and must "draw all reasonable inferences in favor of the non-moving party." Id.
The Court begins with TIAA's request to compel arbitration of Lesser and Gutfeld's claims arising before December 1, 2016. Because the plain text of their employment agreementscompels arbitration, and Plaintiffs present no successful counterargument, the Court mandates these claims be decided in arbitration.
The Court begins by sorting the claims in this litigation into three categories, as determined by the employees' dates of employment. First, there are some RLOs who left TIAA's employment before December 1, 2016. Because those employees never signed one of the later Performance Guides, their claims are entirely subject to arbitration. None of the named Plaintiffs fall into this first category. Second, there are employees who began working at TIAA after December 1, 2016, and therefore worked exclusively under the no-arbitration regime. Plaintiff Martin is an example; he worked at TIAA from July 2017 to May 2018, meaning he was subject only to the Guides not containing arbitration provisions. Compl. ¶ 11. These employees' wage claims are not subject to arbitration. Indeed, TIAA concedes that Martin brings "wage claims . . . for a time period after December 1, 2016, the effective date of the Performance Guide containing no arbitration provision . . . Therefore, none of Martin's claims are arbitrable." TIAA Br. at 2 n.1. And TIAA admits that "since there was no agreement to arbitrate the claims arising on or after December 1, 2016, those claims are properly before this Court." Id. at 5.
Third, there are those employees who worked under both regimes. Plaintiffs Lesser and Gutfeld fall into this category—they began working at TIAA in 2013 and 2014 respectively and both continue to work there. Id. ¶¶ 13, 14. These employees therefore were subject to both kinds of Guides. The Court refers to individuals who, like Lesser and Gutfeld, worked across both time spans as crossover employees.1
The arbitrability of claims for employees in the first or second categories is clear: the former are subject to arbitration, and the latter are not. TIAA's motion to compel arbitration focuses on the third category of cases. And even as to crossover employees, there is no dispute their claims arising after 2016 need not be arbitrated. As TIAA explains, therefore, "the only meaningful dispute [in this case] is whether Plaintiffs Lesser and Gutfeld, who were employed continuously both before and after the December 1, 2016 (the effective date of the 2016 Guide), are subject to arbitration for their alleged claims which arose before December 1, 2016." TIAA Reply Br. at 2. TIAA thus moves only "for an Order compelling Lesser and Gutfield to arbitrate their wage claims arising before December 1, 2016." Def. Br. at 1. This motion to compel arbitration thus turns on one question: Are the crossover employees' pre-December 2016 claims subject to mandatory arbitration? As the Court explains, the answer is yes.
"The...
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