Smith v. Allstate Power Vac, Inc.

• Decision Date: 26 August 2020
• Docket Number: 17-cv-07475 (NG) (SMG)
• Citation: 482 F.Supp.3d 40
• Parties: Felina SMITH, Plaintiff, v. ALLSTATE POWER VAC, INC., and Jane and John Doe #1 - 10, Defendants.
• Court: U.S. District Court — Eastern District of New York

482 F.Supp.3d 40

Felina SMITH, Plaintiff,

v.ALLSTATE POWER VAC, INC., and Jane and John Doe #1 - 10, Defendants.

17-cv-07475 (NG) (SMG)

United States District Court, E.D. New York.

Signed August 26, 2020

Drew William Sumner, Sumner Law LLP, White Plains, NY, Daniel M. Felber, Law Offices of Daniel Felber, New York, NY, for Plaintiff.

Ariadne Anna Panagopoulou Alexandrou, Elior Daniel Shiloh, Gregory I. Radwan, Lewis Brisbois Bisgaard & Smith LLP, Rebecca Ann Goldstein, Littler-Mendelson, New York, NY, for Defendants.

OPINION & ORDER

GERSHON, United States District Judge:

Plaintiff Felina Smith sues her former employer Allstate Power Vac, Inc. ("APV") and Jane and John Doe #1–10, presently unknown employees of APV. Plaintiff alleges that she was the victim of sex discrimination while she was employed by APV as a truck driver and brings claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. , New York State's Human Rights Law, §§ 296, et seq. , New York City's Human Rights Law, N.Y. Admin. Code §§ 8-107, et seq. , and under common law for intentional infliction of emotional distress.

Defendant has moved to compel arbitration under the Federal Arbitration Act ("FAA" or "the Act"), 9 U.S.C. §§ 1 et seq. , or alternatively, to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(c). Defendant also seeks to amend its answer under Rule 15 in connection with both requests for relief. Plaintiff, in opposition, argues that under Michigan arbitration law defendant waived its right to compel arbitration by litigating in this court and that the arbitration agreement is unenforceable under Michigan contract law principles. As discussed below, I have determined that the issue is first, whether or not the FAA applies in this case, and then, if it does not, whether under Michigan arbitration law the defendant waived its right to arbitrate by litigating in this court.

I. Relevant Background

Plaintiff was hired by APV as a truck driver in April 2014. On April 18, 2014, plaintiff signed and dated an arbitration agreement ("the arbitration agreement" or "the DRA"). Pursuant to the DRA, plaintiff agreed to arbitrate all disputes with her employer, including any dispute alleging employment discrimination. The DRA establishes a 180-day statute of limitations to file a demand for arbitration, and contains a Michigan choice of law provision. The DRA states in relevant part:

EQ encourages the prompt and inexpensive resolution of disputes with applicants and current and former employees. Therefore, as a condition of employment and/or continued employment, EQ asks its applicants and employees to agree to this Dispute Resolution Agreement ("Agreement") for all claims and disputes (including claims or disputes alleging illegal discrimination or violation of other state or federal laws relating to employment matters) they may have concerning, arising from or relating to their application for, employment with, and/or termination of employment from EQ, except as specifically noted below. By signing this Agreement, you agree as follows:

....

6. I agree to file any demand for arbitration within 180 days (or in less time if any applicable law so requires) of the event and/or employment practice or action complained of, and I waive any longer state or federal statutes of limitation to the contrary (except those requiring a shorter period), to the extent permitted by Michigan law. I understand that the statute of limitations for claims arising out of an employment action may be longer than 180 calendar days. I agree that any employer action that is the subject of an action, including but not limited to those related to discrimination, benefits, termination of employment, or other terms or conditions of employment is barred if it is not filed within the 180 day period (or in less time if any applicable law so requires). I agree that the 180 day period (or applicable shorter period) is reasonable and will not be extended for any reason, including continuing violations. I waive the application of continuing violations doctrines.

7. This Agreement does not prohibit me from timely filing a charge of discrimination under federal law with the EEOC. The EEOC's right to investigate is maintained. However, filing a charge or claim with an administrative agency[,] including the EEOC or internally with EQ, does not toll (hold in abeyance) the 180 calendar day period for my filing a demand for arbitration. If I wish to obtain individual relief, I understand that any arbitration demand must be filed within 180 days of the action complained of (or in less time if an applicable statute of limitations so requires). The enforceability of the waiver of longer statutory periods will be determined by Michigan law, not by AAA's Rules or its Due Process Protocol.

....

10. This Agreement shall be governed by Michigan law. If any portion of this Agreement is ruled unenforceable, all remaining portions of this agreement shall remain valid. This Agreement reflects the entire agreement between me and EQ with respect to the subject matter hereof, and this Agreement supersedes all prior or contemporaneous oral or written understandings, statements, representations, or promises with respect to the subject matter hereof. I agree that this Agreement may not be modified except in a writing signed by me and EQ's Director of Human Resources.

APV terminated plaintiff's employment in less than a year, on December 11, 2014. Plaintiff subsequently filed a complaint with the Equal Opportunity Employment Commission ("EEOC"). According to plaintiff's complaint, on August 18, 2017, the EEOC issued a final determination that Plaintiff "was a victim of sex (gender-female) discrimination when she was the victim of disparate treatment based on her sex, in violation of Title VII." Complaint at ¶ 25 (internal quotation marks omitted). Upon issuing its determination, the EEOC attempted conciliation, but failed in obtaining adequate relief for plaintiff. The EEOC issued plaintiff a right to sue letter dated September 26, 2017, and plaintiff filed this lawsuit on December 22, 2017.

On September 14, 2018, defendant filed a request for a pre-motion conference, raising an arbitration defense for the first time. At the conference, I granted the parties leave to conduct limited discovery in connection with defendant's anticipated motion to compel arbitration.

II. Legal Standard

"Courts deciding motions to compel [arbitration] apply a standard similar to that applicable for a motion for summary judgment." Meyer v. Uber Techs., Inc. , 868 F.3d 66, 74 (2d Cir. 2017) (internal quotation marks omitted). Under the summary judgment standard, the court considers "all relevant, admissible evidence submitted by the parties and contained in pleadings, depositions, answers to interrogatories, and admissions on file, together with ... affidavits, and draws all reasonable inferences in favor of the non-moving party." Id. (internal quotation marks and citations omitted). "[W]here the undisputed facts in the record require the matter of arbitrability to be decided against one side or the other as a matter of law, [courts] may rule on the basis of that legal issue and avoid the need for further court proceedings." Id. (internal quotation marks omitted).

III. Discussion

A. The FAA's Applicability

Section 1 of the FAA excludes from the Act's coverage "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." 9 U.S.C. § 1. The phrase "or any other class of workers engaged in foreign or interstate commerce" is sometimes referred to as the residuary exemption. The Supreme Court has interpreted the residuary exemption to exempt from the FAA "contracts of employment of transportation workers," Circuit City Stores, Inc. v. Adams , 532 U.S. 105, 119, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001), and lower courts interpreting 9 U.S.C. § 1 have found that truck drivers engaged in interstate transportation of goods constitute transportation workers under Section 1. See, e.g., Kowalewski v. Samandarov , 590 F. Supp. 2d 477, 482–83 (S.D.N.Y. 2008) (collecting cases).

Because plaintiff worked as a truck driver for APV, I ordered defendant to show cause why its motion to compel arbitration should not be denied under Section 1 of the FAA. New Prime Inc. v. Oliveira , ––– U.S. ––––, 139 S. Ct. 532, 537, 202 L.Ed.2d 536 (2019) (a court should determine whether a contract referencing arbitration "falls within or beyond the boundaries of" § 1 "before ordering arbitration"). In response, plaintiff argued that she is exempted under Section 1 because she worked as a truck driver transporting waste and business supplies in interstate commerce and that the DRA is preempted because it conflicts with Congress's express purpose in enacting Section 1. Defendant countered by arguing that I need not decide whether plaintiff is exempted by Section 1 because, even if she is, the DRA is enforceable under state law; it further argued that plaintiff does not fall within Section 1 because her job duties involved driving and operating the front end of a truck used for cleaning out manholes and did not require her to move goods in interstate commerce.

I subsequently asked the parties to submit evidence supporting their respective positions. Plaintiff submitted an affidavit in which she states that: approximately ninety-five percent of defendant's waste is sent to an out-of-state disposal facility; during her employment, defendant collected large amounts of waste from the Metropolitan Transportation Authority and Consolidated Edison, and that most, if not all, of this waste was transported outside New York State; during the course of her employment with defendant, she would routinely clean up waste at various locations, and then either plaintiff or a co-worker would deliver the waste to New Jersey for disposal; she frequently delivered waste out of state during her...