Ladenburg Thalmann & Co. Inc. v Matty

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Ladenburg Thalmann & Co. Inc. v Matty 2012 NY Slip Op 31292(U) May 7, 2012 Supreme Court, New York County Docket Number: 114494/11 Judge: Barbara Jaffe Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. SCANNED ON 511612012 .. . [* 1] SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY PART c5 Justice MOTION DATE MOTION SEQ. NO. MOTION CAL. NO. The following papers, numbered 1 to were read on this motion to/for MB Notice of Motion/ Order to Show Cause - Affldavlts - Exhlblts ... I,Z 3 Answerlng Affldavlts - Exhlbits Replylng Affidavit8 .. Upon the foregoing papem, It Is ordered that this motion Dated: BARBARA JAF J. Check one: J. S. C. .c c NON-FINAL QPOSITION ] 0 REFERENCE 0 DO NOT POST 0 SETTLE ORDER/ JUDG. SUBMIT ORDER/ JUDG. Check if appropriate: - [* 2] Motion Date: Motion Seq. No.: Petitioner, 2/14/12 00 1 -against- DECISION AND JUDGMENT For petitioner: Janene M. Marasciullo, Esq. Kaufman Dolowich et al. 135 Crossways Park Dr,, Ste. 201 Woodbury, NY 1 1797 516-681-1 100 For respondent Matty: Gregory Filosa, Esq. Leeds Morelli & Brown, P.C. One Old Coun6y Rd. Carle Place, NY 115 14 5 16-873-9550 For respondent NYSDHR: Erin Sobkowski, Esq. Caroline 5. Downey General Counsel New York State Div. o f Human Rights One Fordham Plaza Bronx, NY 10458 71 8-741-8398 By order to show cause dated January 4,20 12, petitioner moves pursuant to CPLR 40 1(d) and 7501 et seq. and the Federal Arbitration Act (FAA) for an order compelling arbitration of all disputes between it and respondent Matty related to Matty's employment and staying the action pending before respondent New York State Division of Human Rights (SDHR) filed by'Matty against it. Matty and the SDHR oppose. The salient facts are as follows: In February 2001, Matty executed an employment application with petitioner which required him to agree that: any dispute or claim that may arise between [Matty] and Lpetitioner] . . . shall be determined by mandatory arbitration (and not in a court). This agreement to mandatory arbitration covers all employment disputes or claims including but not limited to termination of employment and all claims under Title VI1 of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967 and any other federal, state or local statute or regulation regarding employment - [* 3] discrimination. (Petition, dated Dec. 22,201 1 [Pet.], Exh. 2). Upon his employment with petitioner, Matty also received a copy of petitioner s employee handbook which contains the identical arbitration clause. ( I d , Exh. 3). On or about September 19,20I 1, Matty filed a complaint with the SDHR, alleging that petitioner had violated Article 15 of the Executive Law of the State of New York (Human Rights Law) by discriminating against him because of his disability. (Id. Exh. 1). At issue is whether Matty s agreement to engage in mandatory arbitration precludes him from pursuing his complaint with the SDHR or the SDHR from investigating andor prosecuting the complaint. In E. E. 0.C.v W a g e House, Inc., the Supreme Court held that the Equal Employment Opportunity Commission (EEOC) had the authority to pursue relief on behalf of an employee who had filed a claim against his or her employer, notwithstanding that the employee had agreed to arbitrate discrimination claims against the employer. (534 US 279 [2002]). The Court observed that the EEOC was statutorily authorized to bring enforcement actions on its own behalf, even if the employee had declined to pursue his or her claim. The Court also rejected the employer s claim that the FAA barred the EEOC from pursuing a claim against it as the EEOC was not a party to the employment contract at issue, nor did it agree to arbitrate the claim. Prior to Waffle House, Inc.,in Gilmer v Interstate/Johnson Lune Corp.,the Supreme Court held that an employee who filed a discrimination claim against his or her employer was bound by a mandatory arbitration clause in an employment agreement, but also found that an individual [discrimination] claimant subject to an arbitration agreement will still be free to file a [* 4] charge wt the EEOC, even though the claimant is not able to institute a private judicial action. ih (500 US 20 [19911; see also E.E, 0.C. v Rappaport, Hertz, Cherson & Rosenthal, P. C., 273 F Supp 2d 260 [ED NY 20031 [E.E.O.C. cannot be compelled to arbitrate discrimination complaint against employer even though employee could be compelled to do so pursuant to arbitration clause in employment contract]). In analogous circumstances, the New York Court of Appeals has held that the Attorney General of the State of New York may not be compelled to arbitrate claims brought by him or her on behalf of persons who had signed agreements containing mandatory arbitration clauses. The Court observed that the Attorney General had not agreed to arbitrate any claims and that he was statutorily authorized to bring actions on behalf of the public interest. (People v Coventry First LLC, 13 NY3d 108 [2009]; see also People v H & R Block, Inc., 5 8 AD3d 415 [lgtDept 20091 [trial court properly declined to compel plaintiff to arbitrate claims]). Here, absent any dispute that the SDHR, like the EEOC and the Attorney General, has the authority to investigate and prosecute discrimination complaints on its own behalf in order in order to vindicate the public interest by eliminating discrimination in employment (Executive Law $4 290,295), and as the SDHR was not a party to the employment agreement between petitioner and Matty, petitioner has failed to establish that the arbitration clause at issue precludes Matty or the SDHR from pursuing Matty s complaint. Petitioner has also failed to cite any authority for the proposition that Matty s discrimination claim may not be heard simultaneously in an arbitration and an action filed by the SDHR. (See eg Matter of New York State Dept. of Labor (Unemployment Ins. Appeal Bd.) v New YorkStute Div.ofHuman Rights,71 AD3d 1234 [3d Dept 20103, lv denied 15 NY3d 714 [* 5] [SDHR required to give collateral estoppel effect to findings made in earlier arbitration concerning discrimination claim]; Matter ofMetro-North Commuter R. R. Co. v New York State Exec. Dept. Div. of Human Rights, 271 AD2d 256 [ 19' Dept 20001 [same]; see also Anker Mgt. Corp. v State of N. Y , Div.of Human Rights, 2 15 AD2d 706 [2d Dept 19951 [denying petitioner's motion to enjoin SDHR from investigating and adjudicating complaint filed by employee despite employee having participated in arbitration proceeding regarding claim as SDHR had independent authority to pursue claim]). Accordingly, it is hereby ADJUDGED and ORDERED, that the petition is denied and the proceeding is dismissed. ENTER: DATED: May 7,2012 New York, New York MAY 0 3 PUQ UNFILED JUDGMENT Thki Judgmenthas not been entered by the County Ckrk and notice dentry cannot be based hereon. 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