United States District Court, S.D. New York
OPINION AND ORDER
KATHERINE POLK FAILLA UNITED STATES DISTRICT JUDGE.
January 2016, Plaintiff Pamela Johnston
(“Plaintiff” or “Johnston”) entered
into a working relationship with Defendant Electrum Partners
LLC (“Electrum”). The nature and terms of that
relationship may be open to dispute, but the parties agree
that the relationship ended by August 2017. Two months later,
in October 2017, Plaintiff brought the instant action
claiming wrongful termination and retaliation under the New
York City Human Rights Law (“NYCHRL”), N.Y. City
Admin. Code §§ 8-101 to 8-131. Specifically,
Plaintiff alleges that she was fired after reporting
workplace misconduct to Electrum's management, including
its founder, president, and managing member, Defendant Leslie
Bocskor (“Bocskor, ” and together with Electrum,
“Defendants”). In addition, Plaintiff claims that
she was terminated after, and as a result of, advising
Electrum that she had been diagnosed with an advanced form of
have moved to dismiss the complaint or to stay the case
pending arbitration pursuant to the Federal Arbitration Act
(“FAA”), 9 U.S.C. §§ 1-16. For the
reasons set forth in the remainder of this Opinion, the Court
will stay this litigation pending the results of an existing
arbitration proceeding in Nevada.
is a public relations specialist who resides at and works
from a Manhattan address. (Compl. ¶¶ 2, 5). In
furtherance of this business, Johnston served as President
and sole owner of Cloud 12 Group, Inc. (“Cloud
12”), a corporation of which she is also the sole
shareholder and principal. (See Bocskor Decl. ¶ 10; Pl.
Opp. 8 (describing Cloud 12 as an “entity that
[Plaintiff] controlled”); ICA 7 (indicating Johnston
signed as President of Cloud 12)).
began operations on or about January 6, 2014; Bocskor founded
the company, and he continues to act as its president and
managing member. (Bocskor Decl. ¶ 4). The company is
incorporated in Nevada, and operates out of Las Vegas. (See
Id. at ¶¶ 3, 5). Electrum “provides
advisory services and guidance to individuals and businesses
engaged in the medical and recreational cannabis
industries.” (Id. at ¶ 6).
The Independent Contractor Agreement
January 4, 2016, Cloud 12 and Electrum entered into an
Independent Contractor Agreement (the “ICA” or
“Agreement”). (ICA; see also Pl. Opp. 8).
Johnston signed the ICA on behalf of Cloud 12 in her capacity
as President, while Bocskor signed the ICA on behalf of
Electrum in his capacity as Managing Member. (Id. at
7). Per the terms of the ICA, Cloud 12 was to serve as
Electrum's Director of Marketing until December 31, 2018,
at which point the ICA would terminate. (Id. at 2,
8). Either party could also terminate the Agreement before
that time “for any or no reason” upon 60
days' notice. (Id. at 2). Although the ICA
allowed the parties to “mutually agree to amend, append
or replace [the Agreement] with one another at any time,
” the Agreement could “not be modified,
terminated, waived[, ] altered or amended except in writing,
signed by [Cloud 12] and a duly authorized officer of”
Electrum. (Id. at 2, 7).
specified the duties and responsibilities that Cloud 12 was
to provide Electrum, including tasks involving
“Communication Strategies, ” “Competitive
Positioning, ” and “Executive Reputation.”
(ICA 8). Cloud 12 would also provide these services to
entities beyond Electrum, including its subsidiaries,
clients, and partners. (Id.) In exchange, Electrum
would pay Cloud 12 “a fee of $8, 500 per month, ”
along with stock options. (Id. at 1). Bocskor
contends, and nothing in the record contradicts, that (i)
Johnston performed all of the work for Cloud 12 that was
requested by Electrum, but (ii) all payments for
Johnston's work under the ICA were made by Electrum to
Cloud 12. (Bocskor Decl. ¶¶ 16-17).
further contends that Johnston negotiated the terms of the
ICA with the express purpose of remaining an employee of only
Cloud 12 and not Electrum, so that she could continue to
“perform work for other clients through … Cloud
12, set her own schedule, and control the amount of personal
income she received so as not to adversely affect the
financial aid her daughter was receiving at college.”
(Bocskor Decl. ¶ 12). Johnston also understood that
becoming an Electrum employee would require her to relocate
to Nevada, a move that she did not wish to make.
(Id. at ¶ 13). Johnston's bid for Cloud 12
to remain an independent contractor to Electrum is borne out
by the terms of the ICA, which terms provide that Cloud 12
would perform services for Electrum “as an independent
contractor, ” and that Cloud 12 was “not a
partner, employee or agent of” Electrum. (ICA 2; see
also, e.g., Id. at 1-2 (providing that Cloud 12
would be reimbursed for certain “pre-approved”
expenses, but not any “equipment, tools, materials,
and/or supplies to accomplish” the services it would
provide to Electrum); Id. at 2 (providing that
Electrum would not withhold any taxes from its payments to
Cloud 12, which was “solely responsible” for
making tax payments)).
to the instant motion, the ICA included an arbitration
provision, which stated, in relevant part:
Except as otherwise provided in this Agreement, any and all
controversies or claims arising out of or related to this
Agreement or the breach thereof shall be settled by binding
arbitration in Las Vegas, Nevada in accordance with the rules
of the Judicial Arbitration and Mediation Service (JAMS), and
judgment upon the award rendered may be entered in any court
having jurisdiction. … Nothing in this Paragraph shall
prevent [Electrum] from seeking injunctive relief from the
courts pending arbitration.
(ICA 7). Also relevant to the analysis below, the ICA
contained a choice-of-law clause, providing that the
“Agreement shall be construed in accordance with and
governed by the substantive and procedural laws of the State
of Nevada, regardless of its conflict of laws
The Alleged Oral Agreement
until August 2017 did any party to the ICA seek in writing to
modify or terminate the Agreement. Plaintiff alleges,
nonetheless, that in June 2016, she entered into an oral
agreement with Electrum and Bocskor in her individual
capacity to become Senior Vice President of Strategy and
Special Projects for Electrum. (Compl. ¶¶ 20-21,
50). This, Plaintiff argues, made her an Electrum employee,
rather than an independent contractor, and thus no longer
subject to the ICA. (See Id. at ¶ 22; Pl. Opp.
2). According to Plaintiff, she then “became more
involved in the day-to-day operations of Electrum” and
was given increased access to Electrum's financial and
management information. (Pl. Opp. 2-3).
a conference before the Court in anticipation of the instant
motion, Plaintiff's counsel stated that when Plaintiff
took on the new role at Electrum in June 2016, “she
started getting an additional $3, 000 a month.” (IPTC
Tr. 5:9-10). Plaintiff, however, has provided no documentary
evidence of this pay increase, and Plaintiff's counsel
admitted that no written documentation memorialized
Plaintiff's new responsibilities or increase in pay.
(Id. at 6:24-7:11). Plaintiff's counsel also
admitted that as “a matter of convenience, ”
Electrum continued to pay Cloud 12 for Johnston's
services, rather than Johnston directly. (Id. at
The Termination of the Relationship
parties do not dispute that Plaintiff's working
relationship with Electrum ended by August 2017. (Compl.
¶¶ 36-37; Bocskor Decl. ¶ 18). According to
Johnston, this occurred after she reported several instances
of inappropriate sexual behavior by Electrum employees to
Bocskor and advised him that she had been diagnosed with
stage four breast cancer. (Compl. ¶¶ 26-29).
Plaintiff claims that by July 2017, Defendants simply stopped
paying her, and that she was fired when she “expressed
alarm” at this development. (Id. at
contrast, Defendants contend that “[o]n August 5, 2017,
following numerous incidents involving Ms. Johnston and Cloud
12, Electrum provided written notice to Cloud 12, via Ms.
Johnston, that the ICA would terminate” in 60 days.
(Bocskor Decl. ¶ 18). According to a Demand for
Arbitration that Electrum filed in Nevada, the
“incidents” alleged against Johnston include
engaging in unprofessional conduct that cost Electrum money
and clients; subcontracting work to third parties and
surreptitiously billing Electrum for those subcontracts in
violation of the ICA; and disclosing confidential information
to third parties in violation of the ICA. (See
generally Arb. Demand ¶¶ 23-43). By
Defendants' account, 20 days after notifying Cloud 12
that Electrum would terminate the ICA, Cloud 12 ceased
performing under the Agreement. (Bocskor Decl. ¶ 19).
filed the Complaint in this action on October 11, 2017,
bringing claims for wrongful termination, aiding and abetting
wrongful termination, unlawful retaliation, and aiding and
abetting unlawful retaliation under NYCHRL. (Dkt. #1; Compl.
¶¶ 45-64). On November 6, 2017, Defendants filed a
letter with this Court requesting a pre-motion conference to
address their anticipated motion to dismiss the action, or in
the alternative, to stay it pending arbitration. (Dkt. #5).
Plaintiff filed a responsive letter on November 9, 2017 (Dkt.
#6), and the Court held the conference on December 13, 2017
(Dkt. #12). In response to an inquiry from the Court during
the conference, Plaintiff later wrote to the Court to
indicate that she did not intend to amend her complaint (Dkt.
#10), and the Court therefore set a briefing schedule for the
instant motion (Dkt. #11). On February 16, 2018, Defendants
filed their motion to dismiss, or alternatively, to stay the
action pending arbitration. (Dkt. #14-15). Plaintiff opposed
the motion on March 20, 2018 (Dkt. #16), and Defendants
replied to Plaintiff's opposition on April 3, 2018 (Dkt.
Motions to Stay Litigation Under § 3 of the FAA
represents a “liberal federal policy favoring
arbitration agreements[.]” Mitsubishi Motors Corp.
v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625
(1985) (quoting Moses H. Cone Mem'l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 24 (1983)). Accordingly,
“where the contract contains an arbitration clause,
” the obligation to arbitrate a dispute “should
not be denied unless it may be said with positive assurance
that the arbitration clause is not susceptible of an
interpretation that covers the asserted dispute. Doubts
should be resolved in favor of coverage.” AT&T