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Jung v. Skadden

May 31, 2006

JONATHAN JUNG, PLAINTIFF,
v.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM, LLP, DEFENDANT.



The opinion of the court was delivered by: Michael B. Mukasey, U.S.D.J.

OPINION AND ORDER

Plaintiff Jonathan Jung sues his former employer Skadden, Arps, Slate, Meagher & Flom, LLP ("Skadden"), alleging discrimination on the basis of race and national origin, and retaliation for his protected activity in opposition to discriminatory acts. Jung brings claims under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. (2000); the New York State Human Rights Law, N.Y. Exec. Law § 290 et seq. (McKinney 2005); and the New York City Human Rights Law, N.Y. City Admin. Code § 8-101 et seq. (1996 & Supp. 2005). Skadden moves to compel arbitration of Jung's claims and to stay litigation pending the completion of arbitration, pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq. For the following reasons, Skadden's motion is granted.

I.

Skadden, an international law firm whose principal place of business is New York City, hired Jung, an Asian-American of Korean descent, as a Tax Coordinator on or about September 8, 1998. (Am. Compl. ¶¶ 1-2, 9, 13) The application for employment that Jung had filled out and signed on August 10, 1998, contained the following clause: "In the event that an offer of employment is made, the offer will be subject to . . . signing a mutual agreement to arbitrate claims." (Ex. D to Schwartz Decl. 4) Jung signed that agreement to arbitrate claims ("the Arbitration Agreement") on September 8, 1998. (Ex. B to Schwartz Decl. 6) Skadden's Director of Human Resources signed the Arbitration Agreement on December 22, 1998. (Id.) The Arbitration Agreement stated:

The Firm [Skadden] and I [Jung] mutually consent to the resolution by final and binding arbitration of all claims or controversies, whether or not arising out of my employment (or its termination), that the Firm may have against me or that I may have against the Firm or its partners, employees or agents in their capacity as such, including, but not limited to, . . . claims of discrimination (including, but not limited to, claims based on race, sex, sexual preference, religion, national origin, age, marital status, medical condition, handicap or disability); . . . and claims alleging a violation of any federal, state or other governmental law, statute, regulation or ordinance . . . .*fn1 (Id. at 1)

The Arbitration Agreement provided further that "any arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") (unless the Firm elects that the arbitration be conducted pursuant to the AAA's National Rules for the Resolution of Employment Disputes) . . . ." (Id. at 4) On February 4, 2002, Skadden employees received a memorandum documenting three changes to the Arbitration Agreement made in response to developments in the law governing the arbitration of employment disputes: for employees initiating arbitration, Skadden would pay any difference between the arbitration filing fees and court filing fees; the arbitrators would have the authority to order additional discovery requested by a party if the discovery were necessary and appropriate; and if the law of the jurisdiction where an employee was employed when a claim arose required a limitations period longer than the one-year period specified in the Arbitration Agreement, the longer period would govern. (Ex. C to Schwartz Decl.)

Sometime between December 1999 and October 2002, Jung was promoted to International Tax Supervisor. (Am. Comp. ¶¶ 18-20) Jung alleges that, beginning in October 2002, while employed in Skadden's New York City office and later Skadden's White Plains office, he was subjected to numerous instances of discrimination based on his race and national origin, culminating in his dismissal on June 7, 2004, in retaliation for complaints he had made regarding the discrimination. (Id. ¶¶ 16-71) Plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC") on or about October 12, 2004. (Pl. Opp'n Mem. 3; Ex. 3 to Chao Aff.) Skadden filed its position statement with the EEOC in opposition to Jung's charge on or about December 15, 2004. (Ex. 4 to Chao Aff.) Plaintiff received a Dismissal and Notice of Right to Sue letter from the EEOC on or about January 31, 2005. (Am. Compl. ¶ 6)

On April 29, 2005, Jung initiated suit against Skadden in this court. (Def. Mem. 6; Pl. Opp'n Mem. 3) On or about May 16, 2005, the parties stipulated to an agreement giving Skadden until June 10, 2005, to respond to Jung's complaint. (Ex. 5 to Chao Aff.) On June 10, 2005, Skadden moved to dismiss Jung's Title VII and New York City Human Rights Law claims, pursuant to Fed. R. Civ. P. 12(b)(6). In a footnote to its memorandum of law in support of the Rule 12(b)(6) motion, Skadden stated that "[b]y filing this motion, the Firm is not waiving any claims or defenses, including but not limited to, the right to compel arbitration." (Mem. of Law in Support of Defs.' Mot. To Dismiss the First, Third, Fourth and Sixth Causes of Action in Pl.'s Compl. 1 n.2) In an opinion read into the record on October 20, 2005, I denied Skadden's motion to dismiss, granting Jung leave to file an amended complaint.

Skadden's counsel faxed Jung's counsel a copy of the Arbitration Agreement on or about October 20, 2005, accompanied by a letter requesting Jung to submit his claims to arbitration and consent to a stay of litigation pending the outcome. (Ex. E to Schwartz Decl.) The letter claimed that, in April 2004, Skadden's counsel had notified Jung's prior counsel of the arbitrability of any claims Jung might bring in court. (Id. at 2) Jung rejected Skadden's request to arbitrate and filed an amended complaint on October 28, 2005. (Ex. F to Schwartz Decl.; Ex. B to Schwartz Decl.) On November 14, 2005, Skadden brought this motion to compel arbitration and stay litigation pending the completion of arbitration.

II.

Section 3 of the FAA, 9 U.S.C. § 3, requires a district court to "stay proceedings if satisfied that the parties have agreed in writing to arbitrate an issue or issues underlying the district court proceeding." WorldCrisa Corp. v. Armstrong, 129 F.3d 71, 74 (2d Cir. 1997) (quoting McMahan Sec. Co. L.P, v. Forum Capital Mkts. L.P., 35 F.3d 82, 85 (2d Cir. 1994)) (internal quotation mark omitted). Section 4 of the FAA, 9 U.S.C. § 4, "directs a federal court to order parties to proceed to arbitration if there has been a 'failure, neglect, or refusal of any party to honor an agreement to arbitrate.'" Genesco, Inc. v. T. Kakiuchi & Co., Ltd., 815 F.2d 840, 844 (2d Cir. 1987) (quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 511 (1974) (quoting 9 U.S.C. § 4)) (internal quotation marks omitted). The FAA "leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." WorldCrisa, 129 F.3d at 74 (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in original)) (internal quotation marks omitted). "In deciding whether to stay the proceedings and compel arbitration, this court must determine: (1) whether the parties agreed to arbitrate; (2) the scope of the parties' arbitration agreement; and (3) whether Congress intended any federal statutory claims to be nonarbitrable."*fn2 Chamois v. Countrywide Home Loans, No. 02 Civ. 9550 (MBM), No. 02 Civ. 9553 (MBM), 2003 WL 23022033, at *2 (S.D.N.Y. Dec. 29, 2003) (citing Genesco, 815 F.2d at 844).

Although the FAA embodies a "strong presumption in favor of arbitration," Thyssen, Inc. v. Calypso Shipping Corp., S.A., 310 F.3d 102, 104 (2d Cir. 2002) (quoting Coca-Cola Bottling Co. v. Soft Drink & Brewery Workers Union Local 812, 242 F.3d 52, 57 (2d Cir. 2001)), a party is on rare occasions "deemed to have waived its right to arbitration if it 'engages in protracted litigation that results in prejudice to the opposing party,'" S & R Co. of Kingston v. Latona Trucking, Inc., 159 F.3d 80, 83 (2d Cir. 1998) (quoting Cotton v. Slone, 4 F.3d 176, 179 (2d Cir. 1993)). If a party seeking to compel arbitration has engaged in "any prior litigation," the question of waiver is for the court to decide. Id. (quoting Doctor's Assocs., Inc. v. Distajo, 66 F.3d 438, 456 n.12 (2d Cir. 1995)) (internal quotation marks omitted).

"While waiver of arbitration is not to be lightly inferred, the issue is fact-specific and there are no bright-line rules." Id.; see also Leadertex, Inc. v. Morganton Dyeing & Finishing Corp., 67 F.3d 20, 25 (2d Cir. 1995); Cotton, 4 F.3d at 179. "Generally, waiver is more likely to be found the longer the litigation goes on, the more a party avails itself of the opportunity to litigate, and the more that party's litigation results in prejudice to the opposing party." Thyssen, 310 F.3d at 105; see also Leadertex, 67 F.3d at 25. "The proximity of a trial date when arbitration is sought is also relevant." Leadertex, 67 F.3d at 25. Notwithstanding the complex of factors that a court may consider in determining waiver, "[t]he key to a waiver analysis is prejudice."*fn3 Thyssen, 310 F.3d at 105. The Second Circuit "has recognized two types of prejudice: substantive prejudice and prejudice due to excessive cost and time delay." Id.

"[A]ny doubts concerning whether there has been a waiver are resolved in favor of arbitration." ...


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