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Bright-Asante v. Saks & Company Inc.

United States District Court, S.D. New York

March 9, 2017



          Edgardo Ramos, U.S.D.J.

         Plaintiff Michael Bright-Asante brings this action against Saks & Company, Inc., the Vice President of Human Resources, Theo Christ (together, “Saks”), and the Retail, Hotel, and Department Store Union/United Food and Commercial Workers International Local 1102 (“Local 1102”) (all together, “Defendants”) alleging, among other things, employment discrimination. Before the Court are three motions: (1) Plaintiff's motion to amend the Amended Complaint pursuant to Federal Rule of Civil Procedure 15(a); (2) Saks' motion for sanctions pursuant to Federal Rule of Civil Procedure 11; and (3) Saks' motion to compel arbitration and/or dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).[1]

         For the reasons stated below, Plaintiff's motion to amend and Saks' motion for sanctions are DENIED and Saks' motion to compel arbitration and/or dismiss is DENIED in part and GRANTED in part.

         I. Factual and Procedural Background[2]

         Plaintiff is an African American man formerly employed as a sales associate in the women's shoe department at Saks Fifth Avenue (the “Store”), a department store in New York City. Amended Complaint (“Am. Compl.”) ¶ 10. He is married and has young children. Id. at ¶ 96. Plaintiff is also a member of Local 1102. Id. at ¶ 11. In December 2013, Local 1102 and Saks entered into a binding collective bargaining agreement (“CBA”). The CBA provides, in pertinent part, that Saks possesses “all statutory and inherent management rights, power, and authority” and that its right to hire or suspend its salespeople was not limited by any provision in the CBA. Rocco Decl. Ex. A, at 1. It also contains a provision prohibiting discrimination against any employee on account of gender, race, or any other legally protected status. Id. at 14 (Article 25. Non-Discrimination).

         The CBA includes a three step grievance procedure to address a dispute or complaint arising between Local 1102 and Saks out of the CBA or “the interpretation thereof.” Id. at 12 (Article 21. Administration, Grievance & Arbitration Procedure). Step 1 states that within twenty calendar days of an employee having a grievance, the employee or Local 1102 must submit the grievance to Saks in writing. Id. Saks must respond within twenty days (or “as soon thereafter as practicable”). Step 2 provides that if the grievance is not settled during the first step, it can be presented within twenty calendar days of Saks' answer, in writing to Defendant Christ, the Vice President of Human Resources at Saks. Id. This too must be answered by Saks within twenty calendar days. Lastly, if the grievance is not settled during the second step, after twenty calendar days the grievance can be submitted to arbitration. Id. at 13. To properly comply with Step 3, the employee must make a written demand for arbitration. Id. Importantly, the antidiscrimination provision makes no reference to this grievance procedure. Also, neither the grievance procedures nor the antidiscrimination provision address whether disputes arising under federal or state law are subject to arbitration.

         In the summer of 2014, Saks became aware of fraudulent activity occurring at the Store and began an investigation of its sales associates. Plaintiff alleges that at that time, the racial makeup of the salespersons at the Store was approximately fifty percent white and fifty percent minorities. Id. at ¶ 48. He claims, however, that Saks investigated only the non-white salespersons. Id. at ¶ 49. Through its investigation, Saks learned that sales associates were stealing merchandise from the Store by the unauthorized use of customers' credit cards. On September 5, 2014, Plaintiff was arrested by law enforcement in connection with the investigation and charged with grand larceny and theft. Id. at ¶ 13. Four days later, on September 9, Christ sent Plaintiff a letter suspending him without pay “pending the legal outcome of [his] situation.” Id. at ¶ 14. Plaintiff alleges that a white woman, who also worked in the Store and similarly sold merchandize to the same customer, was never investigated or suspended. Id. at ¶¶ 56-57.

         On September 15, 2014, Local 1102 sent Saks an email (“Step 1 Grievance”) requesting Plaintiff's immediate reinstatement and back pay. Rocco Decl. Ex. B. Plaintiff claims that the Step 1 Grievance was not signed by him and did not comply with the CBA because it did not include “a written summary” of his complaint “and/or the contract provision alleged to have been violated.”[3] Am. Compl. ¶ 29. He further claims that Saks did not respond within the requisite twenty-day period and that Local 1102 made no efforts to enforce the timeline. Id. at ¶¶ 34, 35. Plaintiff contrasts his grievance process with that of a white salesperson. Without providing further explanation or detail, he claims that during the time Local 1102 was unresponsive to him, it successfully grieved the suspension of a white salesperson. Id. at ¶ 72.

         Plaintiff claims that sometime after he was suspended from the Store, he filed an application for unemployment benefits with the New York State Unemployment Insurance Benefits Board. Am. Compl. ¶ 86. He alleges that Saks opposed his application in retaliation for filing the application, which resulted in an initial denial of his unemployment benefits.

         On March 13, 2015, all of the criminal charges against Plaintiff were dismissed. Id. at ¶ 19. One week later, on March 20, Plaintiff sent a letter to Christ informing him that his case had been dismissed and attached a copy of the Certificate of Disposition. Id. at ¶ 19. Plaintiff also duly notified Local 1102. Id. at ¶ 21. Plaintiff claims that no one from Saks responded to his letter. Id. at ¶ 20. He also claims that no one from Local 1102 responded to a letter he sent on April 10, inquiring about his grievance and reinstatement. Id. at ¶ 22. Though Plaintiff notes that representatives of Local 1102 did inform him that a grievance had been filed, he never received proof of the grievance or further updates regarding the grievance process until after he filed the instant action. Id. at ¶¶ 23-27.

         On July 27, 2015, Plaintiff filed the instant suit.[4] (Doc. 1) Plaintiff alleged that Saks unlawfully discriminated and retaliated against him and breached the CBA. Id. He also alleged that Local 1102 unlawfully discriminated against him and breached its duty of fair representation. Approximately one month later, on August 21, 2015, Local 1102 submitted Plaintiff's grievance to arbitration. Am. Compl. ¶ 41. On September 28, 2015, the Court entered an Order of Automatic Referral to mediation. (Doc. 16) The mediation session was held on January 8, 2016, however the parties could not reach a resolution. On February 9, 2016, Plaintiff requested a pre-motion conference to seek leave to amend the Complaint. (Doc. 20) The Court held the pre-motion conference and granted Plaintiff leave to file an amended complaint to include additional allegations against Local 1102. Plaintiff filed the Amended Complaint on April 4, 2016. (Doc. 25) The Amended Complaint included additional factual allegations and a claim for constructive discharge against Saks. Am. Compl. ¶¶ 94-98. Shortly thereafter, on April 29, 2016, Saks sought leave to file a motion to dismiss the Amended Complaint and/or compel arbitration. (Doc. 28) After the pre-motion conference on May 19, 2016, the Court granted Saks leave to file the instant motion, which it filed on June 9, 2016. (Doc. 32)

         By letter dated August 11, 2016, Plaintiff informed the Court that the arbitration hearing had concluded and attached the Arbitrator's findings (the “Award”), dated July 29, 2016. Arbitration Award (Doc. 40). At the arbitration, Saks argued that its treatment[5] of Plaintiff was properly supported by evidence that showed Plaintiff engaging in fraudulent transactions. According to Catherine Richards, the Director of Investigations at Saks, on August 29, 2014, Plaintiff sold pairs of Louboutin and Givenchy shoes (totaling more than $6, 000) by using the credit card account number of a customer who was not present at the Store on that day and who had not authorized the purchase. Id. at 4. Richards testified that a surveillance video - which was not viewed at the arbitration - showed Plaintiff making the transactions at two separate registers and giving the shoes to a woman who was not the owner of the credit card account. Id. Local 1102 argued that Saks could not meet its burden of proof because the criminal charges against Plaintiff had been dropped, and Saks did not produce the individual whose card was allegedly used or the surveillance video showing Plaintiff's actions.

         The Arbitrator found in favor of Saks and denied Local 1102's grievance. He relied on Richards' testimony regarding the video, stating that Richards' “unequivocal” identification of Plaintiff in the video established Plaintiff's involvement in the fraudulent transaction. Id. at 6. The Arbitrator also highlighted (1) the absence of the true cardholder; (2) Plaintiff's use of two separate registers to complete the purchase, and (3) Plaintiff's giving the shoes to a woman that was not the true cardholder. Lastly, the Arbitrator noted that there was no “plausible, benign reason” for Plaintiff's actions and that because Plaintiff did not attend the arbitration, “he obviously could not explain away what he did.” Id.

         In the August 11 letter attaching the Award, Plaintiff claimed that the issue addressed by the Arbitrator was not the issue that Local 1102 had originally submitted for arbitration and that he was not made aware of the “new stipulated issue” until after the Award had been issued. Id. The Court directed Defendants to respond to Plaintiff's letter and to advise the Court on the impact of the Award on the pending motion to dismiss. (Doc. 41) On October 10, 2016, in response to Plaintiff's letter, Saks and Local 1102 provided a summary of the Arbitrator's findings and emphasized that neither Plaintiff, nor his counsel, attended or participated in the arbitration. (Docs. 42, 43) Saks further claimed that its motion was unaffected by the Arbitrator's findings and the Award. The next day, on October 11, Plaintiff filed a letter with the Court claiming that Defendants were in collusion because both Saks and Local 1102 knew that the video on which the Arbitrator relied did not support the Arbitrator's conclusions. (Doc. 44) Plaintiff claimed that Richards “deliberately misled the Arbitrator and perjured herself” by claiming that it was not Saks' policy to allow customers to make purchases without physically showing their credit card. He also attached a copy of Saks' policy allowing for transactions without the Store credit card so long as additional steps are taken to confirm the identification of the customer. On October 12, Plaintiff requested a pre-motion conference to vacate the Award or in the alternative seek leave to file an amended complaint to include a claim to vacate the Award. (Doc. 45)

         The Court held the pre-motion conference on November 2, 2016. At the conference, Plaintiff's counsel explained that Local 1102 had been unresponsive to Plaintiff's requests for information regarding his grievance and that he did not receive any information from Local 1102 until after he filed the instant action. The Court cautioned Plaintiff that based on the facts presented at the conference, it was unlikely that Plaintiff's motion to amend would be granted. See Transcript of 11/2/2016 Conference (Doc. 53) at 14:9-18. Saks also informed the Court of its intention to seek sanctions in the event that Plaintiff filed the motion to amend. On November 7, 2016, Saks sent Plaintiff's counsel a letter giving notice of Saks' intention to file a Rule 11 motion in the event Plaintiff filed a motion amend. Declaration of Wendy Johnson Lario in Opposition (“Lario Decl.”) (Doc. 59) Ex. B. On November 30, 2016, Plaintiff filed the instant motion to file a Second Amended Complaint.[6] (Doc. 55) Two weeks later, on December 14, 2016, Saks filed a cross-motion for sanctions. (Doc. 57)

         II. Legal Standards

         A. Rule 15 Motion to Amend

         Parties are entitled to amend their pleadings once, as a matter of course, within 21 days after serving the pleading or, if a responsive pleading is required, within 21 days after service of a responsive pleading or a Rule 12 motion. Fed.R.Civ.P. 15(a)(1). A party may not otherwise amend its pleading without either the written consent of the opposing party or leave of the court. Fed.R.Civ.P. 15(a)(2). “The court should freely give leave when justice so requires.” Id. The Supreme Court has held that it would be an abuse of discretion, “inconsistent with the spirit of the Federal Rules, ” for a district court to deny leave without some justification, “such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962). Leave to amend may be denied on the basis of futility if the proposed claims would not withstand a Rule 12(b)(6) motion to dismiss. Dougherty v. Town of N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 88 (2d Cir. 2002). The party opposing the amendment has the burden of establishing its futility. Blaskiewicz v. Cnty. of Suffolk, 29 F.Supp.2d 134, 137-38 (E.D.N.Y. 1998) (citing Harrison v. NBD Inc., 990 F.Supp. 179, 185 (E.D.N.Y. 1998)).

         B. Rule 12(b)(6) Motion to Dismiss

         Under Rule 12(b)(6), a complaint may be dismissed for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). When ruling on a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Koch v. Christie's Int'l PLC, 699 F.3d 141, 145 (2d Cir. 2012). However, the Court is not required to credit “mere conclusory statements” or “threadbare recitals of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)); see also Id. at 681 (citing Twombly, 550 U.S. at 551). “To survive a motion to dismiss, a complaint must contain sufficient factual matter . . . to ‘state a claim to relief that is plausible on its face.'” Id. at 678 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). If the plaintiff has not “nudged [his] claims across the line from conceivable to plausible, [the] complaint must be dismissed.” Twombly, 550 U.S. at 570.

         III. Discussion

         A. Motion to Amend ...

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