Bordet v 21 Club, Inc.

[*1] Bordet v 21 Club, Inc. 2006 NY Slip Op 50438(U) [11 Misc 3d 1069(A)] Decided on February 16, 2006 Supreme Court, New York County Kornreich, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on February 16, 2006
Supreme Court, New York County

RENE BORDET, JEAN CLAUDE LESBRE and YVES THEPAULT, Plaintiffs,

against

21 CLUB, INC., ORIENT-EXPRESS HOTELS LTD. and ORIENT-EXPRESS HOTELS, INC., Defendants.



108516/05

SHIRLEY WERNER KORNREICH, J.

This is an action to recover for age and national origin discrimination brought by plaintiffs against defendants, their former employers. Defendants allegedly terminated plaintiffs' employment because they each were over the age of sixty and of French national origin. Plaintiffs Rene Bordet and Jean Claude Lesbre claim that they were falsely accused of drinking on the job and then fired; plaintiff Yves Thepault claims that he was fired for making a derogatory gesture at the chef at defendants' restaurant, where they worked. According to the complaint, other employees who were not in the same protected age or national origin class, engaged in similar or worse behavior without being terminated. The complaint sets forth two causes of action: (1) discrimination in violation of New York Executive Law § 296 and (2) discrimination in violation of Title 8 of the Administrative Code of the City of New York.

Defendants now move to dismiss this action in its entirety or to stay the instant action and compel arbitration, pursuant to a collective bargaining agreement ("CBA") between defendant 21 Club, Inc. (the "21 Club") and Local 100, the plaintiffs' union. In support of their motion, they submit the affirmation of counsel, the complaint and a copy of the "Memorandum of Agreement," executed between the 21 Club and Local 100, dated November 25, 2003. Plaintiffs have opposed [FN1] and defendants have replied.

I.Plaintiffs' Complaint

Plaintiffs' complaint alleges the following. In 2004 and 2005, the defendants "engaged in a concerted and egregious course of action to rid defendant [21 Club] of its older and long-term employees of French national origin." Compl., para 2. Specifically, defendants' falsely accused older employees of French national origin of drinking on the job or other improper behavior. Id. The 21 Club is owned by defendant Orient-Express Hotels, Ltd. ("OEH") and defendant Orient-[*2]Express Hotels Inc. ("Orient") is a subsidiary of OEH. Id. at 7, 8. Further, Bryan Macguire, the 21 Club's General Manager, "reports directly to OEH and/or Orient-Express Inc." Id. at 24.

The 21 Club's Banquet Department (the "Banquet Department") employs approximately sixty people, including five captains and fifteen waiters. Id. at 13. The 21 Club restaurant (the "Restaurant") employees about 150 individuals, including captains and waiters. Id.

A.Plaintiff Rene Bordet

Plaintiff Rene Bordet is 68 years old, of French national origin and was employed by the 21 Club for over ten years, as a waiter and then as a captain, until he was terminated on November 4, 2004. Compl., para. 3. Mr. Bordet worked in the 21 Club's Banquet Department since 1994 and performed his work in an "exemplary manner." Id. at. 10. On October 27, 2004, Mr. Bordet was working at a private party when he picked up a "used wine glass" that was on a serving cart, while he was holding the dirty glass, "he encountered Chris Haarsgaard," the Banquet Department's assistant manager. Id. at 14. Mr. Bordet handed the glass to a busboy. Id.

Mr. Haarsgaard then informed Jeffrey Sacchet, the 21 Club's Director of Operations, that "Bordet had been drinking wine that evening while on the job." Id. at 15. Mr. Sacchet subsequently accused Mr. Bordet of drinking on the job, "despite the fact that Haarsgaard, as [he] himself admitted, had not seen Bordet drink alcohol on the job, had not smelled alcohol on Bordet's breath, and had not observed any behavior by Bordet that in any way indicated that Bordet had been drinking." Id. On the night in question, Mr. Haarsgaard did not remove Mr. Bordet from his duties, but allowed him to finish his work for the night. Id. at 16. Mr. Bordet stated that he did not drink alcohol on that night and "vehemently denied Sacchet's accusation." Id. at 17. Nonetheless, on November 4, 2004, Mr. Bordet was fired by the 21 Club. Id.

B.Plaintiff Jean Claude Lesbre

Plaintiff Jean Claude Lesbre is 63 years old, also of French national origin, and worked as a captain at the 21 Club for ten years. On April 28, 2004, the 21 Club terminated his employment. Compl., para. 4. Mr. Lesbre worked at the 21 Club restaurant since 1994, performing his work in an "exemplary manner" for his entire employment. Id. at 11.

On April 26, 2004, Mr. Sacchet called Mr. Lesbre into his office, where Mr. Sacchet accused him of "drinking a glass of wine earlier that evening and while at work. Sacchet pulled from his pocket a glass from which Lesbre had allegedly drunk the wine." Compl., para. 19. Mr. Lesbre denied this accusation, offering "to submit, immediately, to tests for alcohol consumption, including taking a blood sample." Id. at 20. This offer, which was made to Mr. Sacchet in the presence of the union's shop steward, was refused and two days later, Mr. Lesbre's employment was terminated by the 21 Club. Id.

C.Plaintiff Yves Thepault

Plaintiff Yves Thepault, also of French national origin, is 68 years old and was employed as a waiter by the 21 Club for fourteen years. His employment was terminated on January 18, 2004. Compl., para. 5. Similarly, from the time he began working at the 21 Club as a waiter in its banquet department, Mr. Thepault performed his work as a waiter in an "exemplary manner." Id. at 12. On January 18, 2005, Mr. Thepault "made a derogatory gesture to the chef" named Elian, after the chef instigated a confrontation over a hamburger. Id. at 24-25. Bryan Macguire, the 21 Club's General Manager, then fired Mr. Thepault for "gross insubordination." Id. at 24. [*3]Although Mr. Thepault apologized, "Macguire insisted on [his] termination." Id. at 25.

D.Disparate Treatment/General Environment

On the other hand, employees "actually caught in the act of consuming alcohol" were subject to a "substantially less severe response[.]" Compl., para. 21. Thomas Rakosi, a captain at the Restaurant, was caught by Mr. Haarsgaard drinking at work on four occasions and was not fired for such conduct. Id. at 22. Mr. Rakosi, who is neither French nor elderly, was subject to only a one-week suspension after his fourth offense. Id.

Mr. Haarsgaard also drank at the 21 Club, "having passed out at his place of work from excess drink and spen[t] the night there sleeping it off." Compl., para. 23. Mr. Haarsgaard is less than 40 years old, admitted to drinking on the job and, thereafter, "left the 21 Club's employ on his own terms and without any imposition of discipline by [any defendants.]" Id.

On at least two other occasions, "verbal abuse [was] directed at [the chef] Elian by younger, non-French 21 Club employees, [and] neither matter resulted in termination and only one 21 Club employee was even suspended." Compl., para. 26. In another "fight between a 21 Club restaurant chef and a 21 Club Captain of Turkish national origin who was substantially younger than plaintiffs," the behavior resulted in the captain being suspended from work for only a short period. Id.

Further, the 21 Club's environment was "rife with anti-French sentiment, including, but not limited to, the following: Mr. Sacchet "expressed glee over his perception that President Bush hated the French"; Mr. Haarsgaard and Mr. Sachet expressed their belief that the French, "unlike other groups," have a propensity to consume wine; Mr. Haarsgaard and Mr. Sachet "repeatedly made fun of Bordet's French accent"; Mr. Sacchet "referred to Bordet's French national origin in a derogatory manner"; Mr. Sacchet "informed Lesbre that he did not want the 21 Club employees of French national origin to communicate with one another in their native language, but had no problem with employees speaking Spanish or Greek to one another." Id. at 28-29.

II.The Collective Bargaining Agreement

On or about November 25, 2003, the 21 Club and Local 100 modified and extended a Collective Bargaining Agreement via a Memorandum of Agreement, which was effective from November 1, 2003 through October 31, 2006. See Memorandum of Agreement, p. 1 (hereinafter, the "Agreement"). The Agreement provided that: Any and all disputes between the parties to this Agreement, in connection with or arising out of the application or interpretation of this Agreement, including grievances that are not resolved under the procedure set forth in the article governing grievances, may be submitted to final and binding arbitration at the option of the petitioner[,] the American Arbitration Association or by mutual agreement of the parties to one (1) of the following Arbitrators: Roger Maher, Richard Adelman, John Sands or Elliot Shriftman or under the Expedited Arbitration Procedure of the American Arbitration Association. The parties agree to abide by the award in connection with any arbitration commenced under this Article, and further agree that such award may be confirmed by a court of competent jurisidiction.

Agreement, p. 4 (emphasis supplied). [*4]

When addressing the issue of discrimination, Article 40 of the Collective Bargaining Agreement, executed in 1994, provides that: There shall be no discrimination against any employee because of Union membership or activities, race, religion, creed, physical handicap, national origin, sex, sexual preference, marital status or age in violation of applicable municipal, state or federal law.

Collective Bargaining Agreement, Article 40(b).

III.Conclusions of Law

A.Arbitrability

Initially, defendants argue that the instant dispute is subject to arbitration, pursuant to the Agreement between the 21 Club and the union. Where an employee's discrimination claim is involved and an arbitration agreement is contained only in a union's CBA, the Court will compel arbitration where the CBA both governs plaintiff's employment, and "contains an arbitration agreement that expressly covers age discrimination claims under the Human Rights Law." Garcia v. Bellmarc Prop. Mgmt., 295 AD2d 233, 234 (1st Dept. 2002) (compelling arbitration where plaintiff concedes "arbitration provision is clear and unmistakable in its waiver of the employee's right to a judicial forum") (emphasis supplied). See also Rogers v. New York Univ., 220 F.3d 73, 75-76 (2d Cir. 2000) ("CBAs, unlike employment contracts executed by individual employees, that purport to waive an employee's right to bring discrimination claims in federal court must be clear and unmistakable"). On the other hand, where a collective bargaining agreement "does not clearly and unmistakably waive their statutory right to a judicial forum[,]" plaintiffs will not be obligated to arbitrate any employment discrimination claims. Conde v. Yeshiva Univ., 16 AD3d 185, 186 (1st Dept. 2005) citing Wright v. Universal Mar. Serv. Corp., 525 U.S. 70 (1998).

Additionally, pursuant to the Federal Arbitration Act, "privately negotiated arbitration agreements are to be enforced according to their terms[.]" Cullman Ventures, Inc. v. Conk, 252 AD2d 222, 228 (1st Dept. 1998). See also Brooke Group v. JCH Syndicate 488, 87 NY2d 530, 534 (1996) (in interpreting contract, Court must give words and phrases used by parties their "plain meaning").

Here, the subject arbitration provision itself does not contain mandatory language. Indeed, the provision states that any disputes "may be submitted to final and binding arbitration at the option of the petitioner[,] the American Arbitration Association or by mutual agreement of the parties[.]" When giving the words of the Agreement their "plain meaning," it is clear that arbitration "may" occur at the petitioner's option or mutual agreement of the parties.[FN2] Neither situation exists here. The Court cannot mandate arbitration not required by the Agreement. [*5]

Even were the Court to consider the arbitration clause in the Agreement to be mandatory, which it does not, defendants have still failed to demonstrate that the instant Agreement "clearly and unmistakably" waives plaintiffs' rights to bring their discrimination claims in a judicial forum. Although defendants rely heavily on the holding of the Appellate Division, First Department in Garcia, that case is inapposite. Initially, the Garcia decision does not specify what language constituted the "arbitration agreement that expressly covers age discrimination claims under the Human Rights Law[.]" Garcia, 295 AD2d at 234. Further, in Garcia, the plaintiff conceded that such arbitration provision was "clear and unmistakable in its waiver of the employee's right to a judicial forum[.]" Id. Unlike the plaintiff in Garcia, plaintiffs here have made no such concession.

B.Motion to Dismiss Yves Thepault's Claims

The Court's task on a CPLR 3211 motion to dismiss is "to determine whether [the] plaintiff's pleadings state a cause of action." 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 NY2d 144 (2002). In making its determination, the Court must "accept the facts as alleged in the complaint as true, accord [the] plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory." Leon v. Martinez, 84 NY2d 83, 87-88 (1994). However, allegations that consist only of bare legal conclusions are not entitled to such consideration. Kliebert v. McKoan, 228 AD2d 232 (1st Dept. 1996) (citations omitted).

In the action at bar, Mr. Thepault has alleged that he was fired because he made a derogatory gesture at the chef Elian. Further, he claims that while other employees not members of the same protected class as he engaged in similar or worse behavior, those employees were not fired. At this time, Mr. Thepault's version of the facts sufficiently supports this cause of action and, thus, dismissal is unwarranted.

C.Dismissal of the Complaint as Against OEH and Orient

A corporation will be legally responsible for the action of its subsidiary where it "become[s] an actor in the whole business of [the] subsidiary corporation." A. W. Fiur Co. v. Ataka & Co., 71 AD2d 370, 374 (1st Dept. 1979) ("A subsidiary corporation over which the parent corporation exercises control in everyday operations may be deemed an instrumentality or agent of the parent"). Under the "single employer" doctrine, a parent corporation may be liable for the discriminatory acts of its subsidiary. Murphy v. S.W. Networks, 1998 U.S. Dist. LEXIS 10211, 7-8 (S.D.NY 1998). However, "[t]hat doctrine applies only where a parent and subsidiary corporation have an integrated economic relationship and exercise common control over employment practices.'" Id.

Plaintiffs have alleged that the 21 Club's General Manager, who is responsible for employment decisions, reports directly to the two Orient-Express Defendants. At this stage of litigation where no discovery has taken place and when affording plaintiffs' version of the facts every favorable inference, plaintiffs have sufficiently alleged that OEH and Orient via the General Manager, Mr. Macguire exercised control over the 21 Club's action vis-…-vis the plaintiffs herein. Cf. Sone v. Tsumura, 222 AD2d 231, 232 (1st Dept. 1995) (no basis for claims against parent corporation where "plaintiff has merely demonstrated that a parent-subsidiary relationship exists" between parent and subsidiary). Accordingly, it is

ORDERED that defendants' motion to dismiss is denied; and it is further [*6]

ORDERED that defendants are directed to serve their answers to the complaint within twenty (20) days after service of a copy of this order with notice of entry; and it is further

ORDERED that both parties appear before the Court for a preliminary conference at 11:00 a.m. on March 16, 2006 at 111 Centre Street, Room 1227, New York, NY 10013.

The foregoing constitutes the decision and order of the Court.

Dated:February 16, 2006

New York, New YorkSHIRLEY WERNER KORNREICH Footnotes

Footnote 1: Although plaintiffs, in their memorandum of law, apparently apply for sanctions, plaintiffs have failed to either move or cross-move for such relief and, thus, the Court will not consider their improper application. In any event, sanctions are not warranted at this time.

Footnote 2: The Fourth Circuit cases cited by defendants do not change this result as they are inapposite. See Austin v. Owens-Brockway Glass Container, 78 F.3d 875, 877 (4th Cir. 1996) (language of arbitration clause differed; did not contain language providing for arbitration "at option of the petitioner" or by "mutual agreement"); United States v. Bankers Ins. Co., 245 F.3d 315, 318 (4th Cir. 2001) (language of arbitration clause differed; did not contain language providing for arbitration "at option of the petitioner" or by "mutual agreement").