Sanchez v. Clipper Realty, Inc.
| Decision Date | 31 October 2022 |
| Docket Number | 21 Civ. 8502 (KPF) |
| Parties | RODNEY SANCHEZ, on behalf of himself, FLSA Collective Plaintiff and the Class, Plaintiff, v. CLIPPER REALTY, INC., doing business as Clipper Realty; CLIPPER REALTY OP L.P., doing business as Clipper Realty L.P.; CLIPPER REALTY CONSTRUCTION LLC; CLIPPER 107 CH LLC, doing business as Clover House; and CLIPPER EQUITY LLC, doing business as Clipper Equity, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Plaintiff Rodney Sanchez worked as a porter in a Brooklyn apartment building from September 2019 to September 2020. He brings a putative class action against his purported former employers - Clipper Realty, Inc., Clipper Realty OP L.P., Clipper Realty Construction LLC, Clipper 107 CH LLC, and Clipper Equity LLC (collectively, “Defendants”) - alleging violations of federal and state wage-and-hour laws. Defendants maintain that this Court cannot adjudicate those claims because Plaintiff agreed to submit them to arbitration through a collective bargaining agreement negotiated by his union. For reasons that follow, the Court disagrees and denies Defendants' motion to compel arbitration. The Court also denies Defendants' partial motion to dismiss finding that Plaintiff has plausibly alleged that Defendants constitute a single integrated enterprise, and thus that each Defendant may be considered Plaintiff's employer for purposes of federal and state employment laws.
BACKGROUND[1]
Defendants are in the business of buying, selling, developing, and managing residential and commercial real estate in and around New York. (FAC ¶ 9). Clipper Realty, Inc., a business corporation incorporated in Maryland, is the parent company of Clipper Realty OP L.P., Clipper Realty Construction LLC, and Clipper 107 CH LLC (collectively, the “Clipper Realty Defendants”). (Id. at ¶¶ 10, 18). Clipper Equity LLC is a limited liability company incorporated in New York. (Id. at ¶ 22). In the aggregate, Defendants own and operate buildings with “thousands of rental units.” (Id. at ¶¶ 13-14).
Plaintiff worked as a porter at one such building, a residential development located at 107 Columbia Heights, Brooklyn, New York, 11201 (“Clover House”), from an unspecified date in or about September 2019 until September 15, 2020. (FAC ¶ 41). He alleges that Defendants subjected him and similarly situated employees to four unlawful labor practices throughout his employment. Specifically, he claims that Defendants (i) failed to pay him for ninety hours of training (id. at ¶¶ 42-43); (ii) required him to work through his lunch breaks without pay (id. at ¶¶ 44-49); (iii) paid him biweekly rather than weekly as required by state law (id. at ¶ 50); and (iv) failed to provide him with mandatory wage statements and notices (id. at ¶¶ 52-53).
On or about August 18, 2020, Plaintiff underwent back surgery to address injuries he sustained in a car accident. (FAC ¶ 55). When he returned to work on September 15, 2020, he brought Defendants a note from his doctor explaining that, on a temporary basis, he should not lift items weighing more than fifty pounds. (Id.). Although only a “small percentage” of Plaintiff's work involved heavy lifting, Defendants fired him that same day. (Id. at ¶¶ 55-57).
Plaintiff alleges that Defendants “operate as a single common enterprise and as joint employers for the employees at their jointly managed buildings.” (FAC ¶ 11). Taking Plaintiff's allegations as true, the Court observes that Defendants have common ownership and management in David Bistricer, J.J. Bistricer, Sam Levinson, and Jacob Schwimmer (id. at ¶ 15(a)-(c)); share a central office as well as executive support, a financial controller, and payroll services (id. at ¶ 15(e), (g), (1)); jointly manage several buildings, including Clover House (id. at ¶ 15(f), (h)); have the same contact information (id. at ¶ 15(i)); and link to one other's websites (id. at ¶ 15(m)).
Additionally, Plaintiff alleges that multiple Defendants had a hand in his and others' employment. For example, Plaintiff asserts that while the Clipper Realty Defendants supervised his day-to-day work, Clipper Equity managed his payroll and approved his leave requests. (FAC ¶ 16; see also id., Ex. H). Similarly, although Plaintiff worked only at Clover House, some of his paychecks were issued by Clipper 107 CH LLC and others were issued by Clipper Realty Construction LLC. . Plaintiff's direct supervisor, pay rate, workweek, and other conditions of employment remained constant despite the fluctuation in his payor. (Id. at ¶ 17). And Plaintiff identified four coworkers - including a supervisor, a doorman, and a heating, ventilation, and air conditioning technician - who were transferred between Defendants' buildings as needed. (Id. at ¶ 15(j)).
The Building Maintenance Employees Union, Local 486, NOITU-IUJAT (the “Union”) represents all of Clover House's full-time and regular part-time porters, handymen, and concierges. (CBA 1). The Union entered into a collective bargaining agreement (the “CBA”) with Defendant Clipper 107 CH LLC effective from early March 2020[2] until February 28, 2023. (Id. at 10-11). Section VIII of the CBA contains a dispute resolution mechanism. Specifically, it provides:
All complaints, disputes, and grievances arising between the parties to this Agreement, except as to non- payment of dues, initiation fees and insurance fund [contributions], which may be sued for directly in a court of competent jurisdiction, at the option of the Union, involving questions of interpretation or application of any clause of this Agreement, or any act or conduct in relation thereto, directly or indirectly, shall be presented by the party asserting a grievance to the other party. Both parties shall thereupon attempt to adjust the dispute, and if no adjustment can be arrived at within forty-eight (48) hours, the matter shall be submitted for mediation or arbitration to the Public Employment Relations Board (PERB), American Arbitration Association (AAA), the Federal Mediation and Conciliation Service (FMCS), one of whose staff members shall mediate the same upon the request of either party, or an Arbitrator mutually agreed to by both parties.
(Id. at 5). The CBA further states that if a dispute is submitted to arbitration, the arbitrator's decision is final and binding upon the parties. (Id.). It also specifies that arbitration costs will be split equally between Clover House and the Union. (Id.).
The CBA was amended on March 23, 2022. (See generally 2022 Addendum; see also CBA 3 ()). The addendum modified CBA's dispute resolution provision as follows:
Except as to nonpayment of dues, initiation fees and insurance fund contributions, which may be sued for directly in a court of competent jurisdiction at the option of the Union, all complaints, disputes, and grievances arising between the parties to this Agreement, involving questions of interpretation or application of any clause of this Agreement, or any act or conduct in relation thereto, directly or indirectly, shall be presented by the party asserting a grievance to the other party. Both parties shall thereupon attempt to adjust the dispute, and if no adjustment can be arrived at within forty-eight (48) hours, the matter shall be submitted for mediation to the Federal Mediation and Conciliation Service, one of whose staff members shall mediate the same upon the request of either party. If the parties cannot resolve the matter at mediation, the dispute shall be submitted to final and binding arbitration before an arbitrator mutually agreed to by both parties The arbitrator shall decide all questions of arbitrability.
(2022 Addendum 1). Of potential significance to the instant motion, the addendum further defines the term “grievance” to encompass any and all disputes over rights and duties created by the CBA, as well as rights and duties created by “any federal, state, and/or local law or regulation,” and makes the procedure outlined in the provision the “exclusive remedy” for any such grievances. (Id.).
Plaintiff initiated this action by filing a Complaint on October 15, 2021, on behalf of a putative class of all non-exempt workers employed by Defendants on or before October 15, 2015. (Dkt. #1). The Complaint alleges breaches of the Fair Labor Standards Act (the “FLSA”) and the New York Labor Law (the “NYLL”) on behalf of Plaintiff and the putative class, as well as claims of disability discrimination and retaliation under the New York State Human Rights Law (the “NYSHRL”) and the New York City Human Rights Law (the “NYCHRL”) on behalf of Plaintiff alone. (Id.). On request of the parties, the Court extended Defendants' deadline to respond to the Complaint until December 17, 2021. (Dkt. #18).
On December 17, 2021, Defendants requested leave to file a motion to compel arbitration and, alternatively, to dismiss the claims against all Defendants other than Clipper 107 CH LLC. (Dkt. #20). The Court ordered the parties to submit a letter stating whether they wished to engage in mediation prior to motion practice. (Dkt. #21). The parties indicated their joint preference to defer mediation until the after the resolution of the contemplated motion. (Dkt. #23).
On January 5, 2022, the Court granted Defendants' request for leave and set a briefing schedule for Defendants' motion. (Dkt. #24). Defendants moved to compel arbitration...
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