Erving Miguel Martinez, on behalf of himself, FLSA Collective Plaintiffs, and the Class v. GAB.K, LLC et al.

CourtDistrict Court, S.D. New York
DecidedJuly 18, 2024
Docket1:24-cv-00352
StatusUnknown

This text of Erving Miguel Martinez, on behalf of himself, FLSA Collective Plaintiffs, and the Class v. GAB.K, LLC et al. (Erving Miguel Martinez, on behalf of himself, FLSA Collective Plaintiffs, and the Class v. GAB.K, LLC et al.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Erving Miguel Martinez, on behalf of himself, FLSA Collective Plaintiffs, and the Class v. GAB.K, LLC et al., (S.D.N.Y. 2024).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ---------------------------------------------------------------X ERVING MIGUEL MARTINEZ, on behalf of : himself, FLSA Collective Plaintiffs, : and the Class, : : 24-CV-352 (DEH) (RWL) Plaintiffs, : : ORDER TO STAY - against - : PENDING ARBITRATION : GAB.K, LLC et al., : : Defendants. : ---------------------------------------------------------------X ROBERT W. LEHRBURGER, United States Magistrate Judge. Plaintiff Erving Miguel Martinez (“Martinez” or “Plaintiff”), on behalf of himself and other similarly-situated persons, filed a collective and class action lawsuit against Defendants GAB.K, LLC (“GAB.K”), Teton Restaurant Group, LLC (“Teton”), and Gabriel Kreuther (“Kreuther”) (collectively, the “Defendants”) alleging violations of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”); the New York Labor Law, N.Y. Lab. Law § 190 et seq. (“NYLL”); the New York City Human Rights Law, N.Y.C. Admin. Code § 8- 101 et seq. (“NYCHRL”); and the New York State Human Rights Law, N.Y. Exec. Law § 290 et seq. (“NYSHRL”). Defendants now move to stay the action and compel arbitration under an agreement requiring arbitration. For the reasons that follow, Defendants’ motion is GRANTED.1 1 “District courts in this Circuit regularly have concluded that a motion to compel arbitration and stay litigation pending arbitration is non-dispositive and therefore within a Magistrate Judge's purview to decide without issuing a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B) and Fed. R. Civ. P. 72(b).” Chen-Oster v. Goldman, Sachs & Co., 449 F. Supp.3d 216, 227 n.1 (S.D.N.Y. 2020) (collecting cases). BACKGROUND Martinez was an employee of the restaurant Gabriel Kreuther (the “Restaurant”), owned by GAB.K. (Dorros Aff. ¶ 3.2) On or around September 7, 2018, Martinez signed an arbitration agreement (the “First Arbitration Agreement”) requiring arbitration of

disputes arising between the employer and employees. (Id.) The Restaurant closed for several months during the COVID-19 pandemic. When the Restaurant reopened after the pandemic, Martinez signed another arbitration agreement (the “Second Arbitration Agreement” together with the First Arbitration Agreement, the “Arbitration Agreement” or “Agreement”) on or around September 11, 2020. (Id. ¶ 4.) The Second Arbitration Agreement is identical to the First Arbitration Agreement Martinez signed in 2018. (Dorros Aff., Ex. A, Ex. B.) The Arbitration Agreement requires “the resolution of disputes that otherwise would be resolved in a court of law … to be resolved only by an arbitrator through final and binding arbitration and not by way of court or jury trial.” (Dorros Aff., Ex. A at 1, Ex. B at 1.) The Arbitration Agreement further states that the claims covered by

the Arbitration Agreement include, inter alia, “disputes regarding any city, county, state or federal wage and hour law”; “compensation, meal, or rest periods, expense reimbursement”; and “discrimination or harassment and claims arising under the … Fair Labor Standards Act … and state statutes, if any, addressing the same or similar subject matters, and all other similar federal and state statutory and common law claims.” (Id.) The Arbitration Agreement has a “fee-splitting” provision, requiring the cost of the arbitration to be “borne by EMPLOYER and EMPLOYEE equally, unless otherwise

2 “Dorros Aff.” refers to the Affidavit of Eben Dorros In Support Of Defendants’ Motion to Compel Arbitration And To Stay Proceedings, filed March 11, 2023. (Dkt. 14.) determined by the Arbitrator.” (Id., Ex. A at 2, Ex. B at 2.) The Arbitration Agreement also states that “EMPLOYER AND EMPLOYEE HAVE EACH READ, BEEN PROVIDED WITH A REASONABLE TIME TO REVIEW, AND UNDERSTAND THIS AGREEMENT, AND UNDERSTAND THAT THIS AGREEMENT TO BINDING ARBITRATION CONSTITUTES

A WAIVER OF TRIAL BEFORE JUDGE OR JURY AND WAIVER OF PARTICIPATION IN CLASS, COLLECTIVE, OR REPRESENTATIVE ACTIONS.” (Id., Ex. A at 2, Ex. B at 2.) The last page of the Arbitration Agreement requires the signature of both employee and employer. (Id.) While Martinez signed the Arbitration Agreement, GAB.K did not. (Id.) Martinez was employed by GAB.K until June 2023, when GAB.K approached him regarding his allegedly hostile workplace behavior against his co-workers. (Dorros Aff. ¶ 6.) Martinez did not return to work, and GAB.K eventually terminated him on June 19, 2023. (Dorros Aff., ¶ 6; Complaint (“Compl.”), Dkt. 1 ¶ 31.) GAB.K, Teton, and Kreuther move to compel arbitration and to stay the instant action. In opposing the motion, Martinez asserts that no valid agreement exists because

GAB.K did not sign the Arbitration Agreement. (Pl. Opp. at 1-2.3) Martinez further argues that the Court should invalidate the Arbitration Agreement because the fee-splitting provision is unconscionable. (Id. at 2.) In reply, Defendants contend that New York law does not require an employer to sign an agreement with an employee for it to be valid and enforceable, so long as the employer manifested its assent by tendering the agreement. (Def. Reply at 1-4. 4) And, although disputing that the fee-splitting provision

3 “Pl. Opp.” refers to Plaintiff’s Memorandum Of Law In Opposition To Defendants’ Motion To Compel Arbitration. (Dkt. 21.)

4 “Def. Reply” refers to Defendants’ Reply Memorandum Of Law In Further Support Of Their Motion To Compel Arbitration And Stay Proceedings. (Dkt. 23.) is not unconscionable, Defendants have agreed to waive it and pay the entire fee. (Id. at 6.) PROCEDURAL HISTORY On January 17, 2024, Martinez commenced the instant action, asserting claims for

alleged violations of the FLSA, NYLL, NYCHRL, and NYSHRL, arising from unpaid wages, unreimbursed costs, and discrimination based on race and national origin. (Compl., Dkt. 1.) On March 11, 2024, GAB.K, Teton, and Kreuther filed the instant motion to compel arbitration and to stay proceedings. (Dkt. 12.) In addition to a supporting memorandum of law, GAB.K also filed the Dorros Affidavit attaching the Arbitration Agreement. (Dorros Aff., Ex. A, Ex. B.) On March 25, 2024, Martinez filed his opposition brief along with the Declaration of C. K. Lee (“Lee Decl.”), an affidavit from Martinez, and local arbitration rules. (Dkt. 22.) GAB.K, Teton, and Kreuther replied on April 1, 2024, at which point the motion was fully briefed. (Dkt. 23.)

LEGAL STANDARDS Under the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“FAA”), parties can arbitrate their disputes instead of litigating them in court. Section 2 of the FAA puts arbitration agreements on an “equal footing” with other contracts. Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006). Agreements to arbitrate thus are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” FAA § 2. Federal policy favors arbitration. Southland Corp. v. Keating, 465 U.S. 1, 10 (1984) (by enacting the FAA, Congress “declared a national policy favoring arbitration”).

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Erving Miguel Martinez, on behalf of himself, FLSA Collective Plaintiffs, and the Class v. GAB.K, LLC et al., Counsel Stack Legal Research, https://law.counselstack.com/opinion/erving-miguel-martinez-on-behalf-of-himself-flsa-collective-plaintiffs-nysd-2024.