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Patterson v. Raymours Furniture Co., Inc.

United States District Court, S.D. New York

March 27, 2015

CONNIE PATTERSON, on behalf of herself and all others similarly situated, Plaintiff,

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For Connie Patterson, on behalf of herself and all others similarly situated, Plaintiff: Joseph A. Fitapelli, LEAD ATTORNEY, Fitapelli & Schaffer, New York, NY; Justin Mitchell Swartz, LEAD ATTORNEY, Michael Joseph Scimone, Outten & Golden,LLP (NYC), New York, NY; Brian Scott Schaffer, Eric Joshua Gitig, Fitapelli & Schaffer, LLP, New York, NY.

For David Ambrose, Plaintiff: Eric Joshua Gitig, Fitapelli & Schaffer, LLP, New York, NY.

For Raymours Furniture Company, Inc., Defendant: David Wirtz, LEAD ATTORNEY, Littler Mendelson, P.C. (NYC), New York, NY; Michael Thomas Grosso, LEAD ATTORNEY, Littler Mendelson, P.C. (Newark), Newark, NJ; Edward T. Groh, Raymour & Flanigan, Phillipsburg, NJ.

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VALERIE CAPRONI, United States District Judge.

Plaintiff brings this putative collective and class action against her former employer for alleged violations of the Fair Labor Standards Act (" FLSA" ) and the New York Labor Law (" NYLL" ). Defendant

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moved to compel arbitration pursuant to an arbitration clause contained in its employee handbook. For the reasons stated below, Defendant's motion is GRANTED.


Defendant is a furniture retailer that operates stores in multiple states, including New York. Compl. ¶ 2; McPeak Decl. ¶ 4. Plaintiff worked as a Sales Associate from June 20, 2005, to February 2, 2014, the date on which she was terminated. Compl. ¶ 17; McPeak Decl. ¶ ¶ 5, 11, Ex. 1. Plaintiff claims that Defendant misclassified all of its Sales Associates as exempt from the overtime provisions of the FLSA and NYLL. Compl. ¶ 5. As a result, Defendant failed to pay them overtime wages for all the hours worked in excess of forty hours per week in violation of both statutes. Id. ¶ ¶ 78, 87.[1]

When Plaintiff was hired, Defendant provided her with a copy of its Associate Handbook (" Handbook" ). McPeak Decl. ¶ 5. Plaintiff signed an acknowledgment form stating that she understood the Handbook's contents to be " applicable to the position" for which she had been hired. McPeak Decl. Ex. 1. The form stated that the Handbook's contents were " not promissory or contractual in nature" and that Plaintiff's employment was " not for any stated period." Id. In October 2009, Defendant updated its Handbook and distributed copies to all employees. McPeak Decl. ¶ 6. Plaintiff acknowledged that her continued employment would constitute her agreement to the 2009 changes and all future changes made to the Handbook. McPeak Decl. Ex. 2. The 2009 acknowledgment form stated that " nothing in the Handbook constitutes a contract or promise of continued employment," that Plaintiff's employment was " at will" and that the parties had not " entered into an employment agreement for a specified period of time." Id.

In February 2012, Defendant issued a revised version of its Handbook, which, for the first time, included the Employment Arbitration Program (" EAP" ). McPeak Decl. ¶ 12, Ex. 6. Defendant notified its employees by email and required them to acknowledge that they had reviewed the updated Handbook. McPeak Decl. ¶ 13, Exs. 7, 8. Plaintiff did so. McPeak Decl. Ex. 9. Defendant amended its Handbook one more time in April 2013 and again emailed its employees and required them to acknowledge the updates. McPeak Decl. ¶ 18, Ex. 11. Plaintiff electronically acknowledged her review of the Handbook. McPeak Decl. Ex. 12.

Page five of the 2013 version of the Handbook declares: " THIS HANDBOOK IS NOT A CONTRACT OF EMPLOYMENT. All Associates of the Company are employed on an 'at will' basis." McPeak Decl. Ex. 10 at 5 (emphasis in original). It goes on to state that the Handbook " is intended for informational purposes only" and that nothing in it " creates a promise of continued employment, employment contract, term or obligation of any kind on the part of the Company." Id. (emphasis in original). On the same page, the document states that " [c]ontinuing employment after the issuance of this Handbook (or any subsequent revision) constitutes the associate's agreement to rules, policies, practices and procedures contained herein." Id.

The Handbook describes the EAP as " an essential element of your continued employment relationship" and " a condition of your employment." Id. at 58 (emphasis in original). It also provides that the EAP " is not a contract of employment and does not change your status as an at-will employee." Id.

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(emphasis in original). Under the EAP, employees are required to arbitrate " any employment-related or compensation-related claims . . . that in any way arise from or relate to your employment with us . . . and that are based upon a legally protected right." Id. at 59 (emphasis in original). The EAP defines " legally protected right" to include rights arising under the " the federal Fair Labor Standards Act or any state wage and hour laws." Id. Finally, the program has a class action waiver:

Claims under this Program cannot be litigated by way of class or collective action. Nor may Claims be arbitrated by way of a class or collective action. All Claims between you and us must be decided individually. This means that, notwithstanding any other provision of this Program, if you . . . elect to arbitrate a Claim, . . . you . . . will [not] have the right . . . to . . . obtain relief from a class action . . ..

Id. at 66 (emphasis in original).

Defendant moves to compel arbitration based on the company's EAP.


In deciding a motion to compel arbitration under the Federal Arbitration Act (" FAA" ), 9 U.S.C. § § 3 and 4, the Court " applies a standard similar to that applicable for a motion for summary judgment." Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003) (citations omitted). A motion to compel arbitration may be granted " when the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that movant is entitled to judgment as a matter of law." Thomas v. Pub. Storage, Inc., 957 F.Supp.2d 496, 499 (S.D.N.Y. 2013) (citations and internal quotation marks omitted). " All facts, inferences, and ambiguities must be viewed in a light most favorable to the nonmovant." Alexander & Alexander Servs., Inc. v. These Certain Underwriters at Lloyd's, London, 136 F.3d 82, 86 (2d Cir. 1998) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). If the Court determines " that an arbitration agreement is valid and the claim ...

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