BY KEVIN M. HOGAN AND SEAN C. MCPHEE Western District Case Notes
BAEC Bulletin | September/October 2023 | 21
Agreements to Arbitrate In Oldacre v. ECP-PF CT Operations, 22-cv-577-JLS-HKS (May 15, 2023), plaintiff commenced a putative class action against defendant—an operator of fitness centers—claiming that defendant violated New York Labor Law § 191 by paying him, and other manual workers, on a bi-weekly rather than weekly basis. Defendant moved to compel arbitration of the named plaintiff’s claim based on an arbitration clause contained in the gym membership agreement that it offers as a “perk” to its employees. Plaintiff opposed, arguing that the arbitration clause in the gym membership agreement did not cover employment disputes, and that defendant failed to show that plaintiff agreed to arbitrate claims related to his employment. In response, defendant argued that the issue of arbitrability had to be decided by an arbitrator because the agreement delegated that authority to the arbitrator, and plaintiff had not challenged the enforceability of the delegation provision. Observing first that there is a general presumption that the issue of arbitrability should be resolved by the courts, the Court then noted that the presumption can be overcome if the parties have “clearly and unmistakably” delegated that authority to an arbitrator. In that scenario, a court may not override the contract, and has no power to decide the arbitrability issue “even if the court thinks that the argument that the arbitration agreement applies to a particular dispute is wholly groundless.” The Court then found that the plain language of the delegation provision showed that plaintiff had clearly and unmistakably delegated questions of arbitrability to the arbitrator. Finally, because plaintiff did not challenge the delegation provision itself, defendants’ motion to compel arbitration was granted since a challenge to another provision of the arbitration clause in which the delegation provision is found does not prevent a court from enforcing a delegation provision. Joinder of Non-Diverse Defendants In Kelly v. Snap-On Inc., 21-cv-729-LJV (May 22, 2023), plaintiff was injured when he was struck by a vehicle driven by one defendant who plaintiff alleged was an agent for other corporate defendants. Plaintiff commenced two actions, first an action against one corporate defendant alleging that, as owner of the vehicle, it was liable for the driver’s negligence. Plaintiff then commenced a second action against two related corporate defendants based on claims of negligent hiring and training and a theory of respondent superior. Before plaintiff could move to consolidate the two actions, defendants in the second action removed it to federal court based on complete diversity. Plaintiff moved for leave to amend the complaint to add the driver, whose citizenship would defeat diversity, and then to remand the lawsuit back to state court. The Court granted both motions, ruling first that, because the allegations against the driver and the corporate defendants arose
KEVIN M. HOGAN Managing Partner Phillips Lytle LLP
SEAN C. MCPHEE Partner Phillips Lytle LLP
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