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Orlando v. Liberty Ashes, Inc.

United States District Court, S.D. New York

January 15, 2020

CARL ORLANDO, JR., on behalf of himself and others similarly situated, Plaintiff,
v.
LIBERTY ASHES, INC., et al, Defendants.

          ORDER

          RICHARD J. SULLIVAN, CIRCUIT JUDGE.

         Plaintiffs Carl Orlando, Jr., Leonard Menna, Jr., Luis Acevedo, Quamaine Powell, and Ramdeo Persad bring this collective action alleging that their former employers - Liberty Ashes, Inc. ("Liberty Ashes") and its principals - violated various federal and state labor laws. Now before the Court is Defendants' motion to compel arbitration of Plaintiffs' claims and to dismiss the complaint. For the reasons that follow, Defendants' motion is DENIED.

         I. Background

         Defendant Liberty Ashes is a waste management company operated by individual Defendants Francesco Bellino, Michael Bellino, Jr., Stephen Bellino, and Michael Bellino. (Compl, ¶¶ 4-27.) Plaintiffs are individuals who worked for Liberty Ashes prior to October 2015.[1] At all times relevant to this suit, Local 890 of the League of International Federated Employees (the "Union") served as the collective bargaining representative for employees in Plaintiffs' respective roles. (See Doc. No. 130 ¶ 4.)

         At the beginning of 2012, Liberty Ashes and the Union signed a collective bargaining agreement with an effective term of January 1, 2012 to December 31, 2015 (the "2012 CBA"). (Doc. No. 136-6 (the 2012 CBA) ¶ 26.) The 2012 CBA provided that it applied "to all present and future employees covered by this Agreement and employed by [Liberty Ashes] during the term of this agreement." (2012 CBA at 3.)

         On December 1, 2015, Plaintiff Orlando - then a former employee of the company -initiated this action by filing the operative complaint on December 1, 2015. (Doc. No. 1.) The complaint sets out eight causes of action, accusing Defendants of (1) failing to pay overtime in violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq.; (2) failing to pay overtime in violation of the New York State Labor Law, N.Y. Lab. L. §§ 650 et seq., (3) failing to provide the wage notices required by New York Labor Law § 195; (4) retaliation in violation of the FLSA; (5) retaliation in violation of the New York Labor Law; (6) failing to pay the federal minimum wage; (7) failing to pay the New York State minimum wage; and (8) not paying Orlando's wages for the last three days of his employment. (Compl. ¶¶ 56-91.) Plaintiff Menna filed a consent-to-sue form on December 21, 2015. (Doc. No. 6.)

         On December 22, 2015 - after each of the Plaintiffs had terminated his employment with Liberty Ashes - Liberty Ashes and the Union executed a "Memorandum of Agreement" regarding the continuing relationship between the two entities (the "2015 MOA"). The 2015 MOA provided that a "successor CBA" (the "2016 CBA") would take effect on January 1, 2016 and was to run until December 31, 2018. (Doc. No. 129-2(2015 MOA) ¶ 3.) The 2015 MOA made some changes to the compensation available to Liberty Ashes employees (which are not relevant to this action), but otherwise provided that "[a]ll other terms and conditions of employment as contained in the expired CBA, and any MOA executed between the parties after the execution of the prior CBA, shall remain in full force and effect." (Id. ¶ 4.) On January 8, February 1, and February 5, 2016, Plaintiffs Acevedo, Powell, and Persad joined this action respectively. (Doc. Nos. 19, 23, 26.)

         On December 28, 2016 - more than a year after Orlando commenced suit and more than ten months after the remaining Plaintiffs joined this action - Liberty Ashes and the Union entered a second memorandum of agreement (the "2016 MOA"). (Doc. No. 129-3 (2016 MOA).) The 2016 MOA modified the grievance procedure set out in the 2016 CBA, adding the following arbitration clause:

To ensure the uniform administration and interpretation of this Agreement in connection with federal, state, and local wage-hour statutes, all claims, accruing at any time, brought either by the Union or Employees, concerning an employee's hours and wages including, but not limited to, claims arising under the Fair Labor Standards Act ("FLSA"), the New York Labor Law or Local Law (collectively, the 'Covered Statutes'), in any manner, shall be subject exclusively, to the grievance and arbitration procedures described in the collective bargaining agreement. There shall be no right or authority for any of the above claims to be arbitrated on a class wide basis. The costs of arbitration shall be borne equally between the Union and the Employer and not the employee.

(2016 MOA ¶ 1.) In exchange for adopting this arbitration clause, Liberty Ashes agreed to pay each "Employee" a cash bonus and to give "all Employees" a raise and an annual allowance for the purchase of work boots. (Id. ¶¶ 2-5.)

         Defendants moved to compel arbitration on March 6, 2017 (Doc. No. 98), which Plaintiffs opposed on the grounds that they were no longer employees of Liberty Ashes and therefore not bound by the terms of the 2016 MOA. However, when briefing on that motion revealed several factual disagreements, the Court concluded that limited discovery was appropriate. (See Doc. No. 118 at 2.) Accordingly, on January 31, 2018, the Court denied Defendants' motion to compel arbitration without prejudice to renewal. (Id. at 1.) Defendants renewed their motion on May 25, 2018 (Doc. No. 128), and the motion was fully briefed on July 20, 2018 (Doc. No. 150).

         II. Legal Standard

         Arbitration is a matter of contract, and parties may be forced to arbitrate a dispute when they have previously agreed to arbitration. AT & T Techs,, Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648 (1986); see also FSP, Inc. v. Societe Generate, 350 F.3d 27, 30 (2d Cir. 2003) ("Although the FAA expresses a strong federal policy favoring arbitration, '. . . a party cannot be required to submit to arbitration any dispute which he has not agreed to so submit.'" (internal citation omitted) (quoting United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960)). To determine whether a dispute is arbitrable, a court must decide two questions: "(1) whether there exists a valid agreement to arbitrate at all under the contract in question ... and if so, (2) whether the particular dispute sought to be arbitrated falls within the scope of the arbitration agreement." Hartford Accident & Indem. Co. v. Swiss Reinsurance Am. Corp., 246 F.3d 219, 226 (2d Cir. 2001) (quoting Nat'l Union Fire Ins. Co. v. Belco Petroleum Corp., 88 F.3d 129, 135 (2d Cir. 1996)). In accordance with the Federal Arbitration Act ("FAA"), "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983).

         "Under the FAA, threshold questions of arbitrability presumptively should be resolved by the court and not referred to the arbitrator.. . . [But] the presumption may be overcome where the parties 'clearly and unmistakably' agree to arbitrate threshold questions such as whether the arbitration clause applies to a particular dispute, or whether it is enforceable." Doctor's Assocs., Inc. v. Alemayehu,934 F.3d 245, 250-51 (2d Cir. 2019) (internal citations omitted); see also All. Bernstein Inv. Research & Mgmt., Inc. v. Shaffran,445 F.3d 121, 126 (2d Cir. 2006) (internal quotations omitted) ("[T]he issue of whether the parties agreed to arbitrate a matter is to be decided by the courts and not the arbitrators, unless the parties clearly and unmistakably provide otherwise."). Importantly, though, "parties may not delegate to the arbitrator the fundamental question of whether they formed the agreement to arbitrate in the first place." Doctor's Assocs., Inc., 934 F, 3d at 251. "[W]hether an entity is a party to the ...


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