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Palese v. Tanner Bolt & Nut, Inc.

United States District Court, E.D. New York

December 5, 2013

JAMES PALESE, Plaintiff,
v.
TANNER BOLT & NUT, INC. and JEFFREY TANNENBAUM, Defendants

For the Plaintiffs: DAVIS S. FEATHER, ESQ., Law Offices of David S. Feather, Garden City, NJ.

For the Defendants: DOMENICK LEONARDI, ESQ., The Law Offices of Lee A. Schwartz, Melville, NY.

OPINION

Page 373

MEMORANDUM & ORDER

FREDERIC BLOCK, Senior United States District Judge.

Plaintiff James Palese (" Palese" ) alleges in his Amended Complaint that defendants retaliated against him by terminating his employment in violation of Title VII, the Family Medical Leave Act, New York Executive Law § 296, and Title 8 of the New York City Administrative Code. He also alleges breach of an Employment Agreement and two Asset Purchase Agreements. While there is no serious dispute that the retaliation claims and the alleged breach of the Employment Agreement are subject to an agreement between the parties to arbitrate those claims, the parties disagree on whether the claims alleging breach of the Asset Purchase Agreements are arbitrable.

I

Defendant Tanner Bolt & Nut, Inc. (" Tanner" ) sells building supplies and equipment, and defendant Jeffrey Tannenbaum (" Tannenbaum" ) is its president. In 2010, Palese, the owner of two companies--HermansCentral.com, Inc. (" HermansCentral" ) and R& T Building & Service Corp. (" R& T Building" )--agreed to sell both to Tanner. In connection with the sale, Tanner agreed to hire Palese as the General Manager of the new Herman's Hardware Division of Tanner, which would

Page 374

include Palese's former companies. The parties entered into multiple agreements to memorialize the arrangements.

Under the Employment Agreement, dated and executed on June 8, 2010, Tanner hired Palese for a 5-year term ending May 31, 2015. The Employment Agreement has an extensive arbitration clause which includes, in relevant part:

All claims, disputes and other matters in question between the parties to this Agreement arising out of or in any way relating to Employee's employment by Tanner or this Agreement or the breach thereof, shall be decided by an arbitration to be conducted in Kings County, State of New York.

Pl.'s Am. Compl. Ex. B, § 10(d) (emphasis added).

The Asset Purchase Agreements--dated and executed for R& T Building on June 4, 2010, and for HermansCentral on June 8, 2010--effected the sale and transfer of the companies' assets from Palese to Tanner. Both Asset Purchase Agreements include an identical " Governing Law Disputes" clause which reads in full:

All questions pertaining to the validity, construction, execution and performance of this Agreement shall be construed and governed in accordance with the laws of the State of New York, without giving effect to the conflicts or choice of law provisions thereof. Any dispute arising under this Agreement shall be settled in any court of competent jurisdiction located in the State of New York, County of Kings, and to the extent not otherwise subject to the jurisdiction of such courts Seller and Shareholder agree to waive any objection to such jurisdiction and agree to subject themselves to the jurisdiction of such court.

Pl.'s Am. Compl. Ex. A and Defs.' Letter, Sept. 20, 2013, Ex. A, Asset Purchase Agreements for HermansCentral and R& T Building, ยง 13(f). These agreements provide that part of the consideration for each company ...


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