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Barreto v. JEC II, LLC

United States District Court, S.D. New York

July 25, 2017

RENATO BARRETO and DAVID KANT, Plaintiffs,
v.
JEC II, LLC, BRAND ESSENCE HOSPITALITY GROUP, LLC, BAGATELLE AMERICA LLC, THE ONE GROUP HOSPITALITY, INC., THE ONE GROUP, LLC & BAGATELLE LITTLE WEST 12th LLC, all individually and d/b/a BAGATELLE NY, and LAURENT NICOUD, Defendants.

          OPINION & ORDER

          KATHERINE B. FORREST, UNITED STATES DISTRICT JUDGE

         Plaintiffs Renato Barreto and David Kant filed the instant action on December 20, 2016, alleging that defendants engaged in unlawful employment discrimination and retaliation against plaintiffs under, among other statutes, Title VII of the Civil Rights Act of 1964. On April 21, 2017, defendants moved this court to stay this litigation and compel arbitration pursuant to arbitration agreements that plaintiffs signed and the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. Plaintiffs oppose defendants' motions, arguing that although they signed arbitration agreements, such agreements are invalid because they are unconscionable. Furthermore, plaintiffs argue that even if the agreements are enforceable, they are not enforceable against certain defendants who were not parties to the agreements. For the reasons set forth below, the Court finds that the agreements are not unconscionable and bind plaintiffs to arbitrate their underlying disputes in this action against all defendants. Accordingly, the Court GRANTS defendants' motions to compel arbitration.

         I. BACKGROUND

         A. FACTUAL BACKGROUND

         Plaintiffs Renato Barreto and David Kant were both employed as servers/waiters by defendants at the restaurant Bagatelle, located on Little West 12th street in New York, NY. (Complaint (“Compl.”) ¶¶ 8, 11, ECF No. 2.) Plaintiff Barreto began his employment at Bagatelle in 2012. (Id. ¶11.) In or around that time, Barreto and approximately 30 newly-hired employees attended a staff meeting where they were given a copy of an employee-handbook, which contained as an appendix an arbitration agreement. (Affidavit of Renato Barreto (“Barreto Aff.”) ¶ 2, ECF No. 34-1; see ECF Nos. 24-3, 24-4.) The arbitration agreement is titled “(BAGATELLE LITTLE WEST 12TH LLC)'s Mandatory Arbitration Policy and Procedure for Resolving Disputes Arising Out of Its Employees' Employment or Termination of Employment” and provides:

In the event of any dispute, claim or controversy including, but not limited to, any dispute, claim or controversy seeking compensatory and/or punitive damages (“claims”) arising out of any employees' employment or cessation of such employment with (BAGATELLE LITTLE WEST 12TH LLC), any such claims, on an individual or class basis, shall be submitted to final and binding arbitration.”

(ECF No. 24-4 at 1.) (emphasis in original) According to plaintiff Barreto, the employees were instructed to sign the documents and were told that they would not be able to work for Bagatelle unless they did so. (Barreto Aff. ¶ 7.) Plaintiff Barreto states that the employees were not provided with further instructions and were given approximately five minutes to sign and return the documents and were not told that they could take the employee handbook home.[1] (Id. ¶¶ 3, 5-6, 8.) Barreto signed the arbitration agreement on May 9, 2012. (ECF No. 24-4 at 7.)

         Plaintiff Kant began his employment at Bagatelle in 2015. (Compl. ¶11.) At the commencement of his employment, Kant was also provided with an employee handbook, which contained as an appendix an arbitration agreement. (ECF Nos. 24-1, 24-2.) The arbitration agreement is titled “The Company's Mandatory Arbitration Policy and Procedure for Resolving Disputes Arising Out of Its Employees' Employment or Termination of Employment” and provided:

In the event of any dispute, claim or controversy including, but not limited to, any dispute, claim or controversy seeking compensatory and/or punitive damages (“claims”) arising out of any employees' employment or cessation of such employment with The Company, [2]any such claims, on an individual or class basis, shall be submitted to final and binding arbitration. . . . Any claim Employee has or may bring against The One Group, LLC, or any affiliated, subsidiary, or agent of the One Group, LLC, arising out of the employee's employment or termination of employment shall be subject to the requirements of this Arbitration Agreement.”

(ECF No. 24-2 at 1, 3.) (emphasis in original) Similarly to plaintiff Barreto, plaintiff Kant alleges that he was allocated only approximately five minutes sign and return the documents.[3] (Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion to Compel Arbitration (“Mem. in Opp.), ECF No. 34 at 5.) Kant signed the arbitration agreement on March 2, 2015. (ECF No. 24-2 at 6.)

         B. PROCEDURAL BACKGROUND

         Plaintiffs filed their complaint in this action on December 20, 2016, alleging that defendants engaged in unlawful discrimination and retaliation under Title VII of the Civil Rights Act of 1964, New York City Administrative Code § 8-107, and New York Executive Law § 296. (Compl. ¶¶ 136-68.) On April 21, 2017, defendants moved the court to stay this litigation and compel arbitration pursuant to the arbitration agreements signed by plaintiffs and the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (ECF Nos. 27, 29, 30.) Defendants argue that plaintiffs executed binding arbitration agreements, which compel them to arbitrate the instant dispute concerning their employment with and/or termination from Bagatelle restaurant. Plaintiffs oppose defendants' motions, arguing that neither plaintiff entered into a valid and binding arbitration agreement because the agreements were unconscionable. Alternatively, plaintiffs argue that even if the agreements are enforceable, they are not enforceable against the defendants who were not parties to the agreements.

         II. LEGAL STANDARDS

         “[A]rbitration is simply a matter of contract between the parties; it is a way to resolve those disputes-but only those disputes-that the parties have agreed to submit to arbitration.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943, (1995). The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., “creates a body of federal substantive law of arbitrability applicable to arbitration agreements . . . affecting interstate commerce.” Alliance Bernstein Inv. Research & Mgmt., Inc. v. Schaffran, 445 F.3d 121, 125 (2d Cir. 2006) (internal ...


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