Opinion
159312/2016
01-14-2020
Ihor TROSHIN and All Other Persons Similarly Situated Who Were Employed by the Stella Orton Home Care Agency, Inc., Plaintiffs, v. STELLA ORTON HOME CARE AGENCY, INC., Defendant.
Virginia & Ambinder LLP (LaDonna Lusher, Michele A. Moreno, and Joel L. Goldenberg of counsel), for plaintiffs. Ford Harrison LLP (Philip K. Davidoff and Jeffrey A. Shooman of counsel), for defendant.
Virginia & Ambinder LLP (LaDonna Lusher, Michele A. Moreno, and Joel L. Goldenberg of counsel), for plaintiffs.
Ford Harrison LLP (Philip K. Davidoff and Jeffrey A. Shooman of counsel), for defendant.
Gerald Lebovits, J.
Ihor Troshin, the named plaintiff in this wage-and-hour action—one of many pending wage-and-hour disputes involving home-care agencies like defendant—moves by order to show cause for preliminary and permanent injunctive relief precluding arbitration of particular claims against defendant Stella Orton Home Care Agency, Inc. A global arbitration pertaining to all the various pending home-care-agency-related wage and hour claims (including those of Troshin and some members of the proposed class here) is now scheduled for a hearing on January 15, 2020. Troshin therefore also seeks a temporary restraining order for the same relief pending adjudication of his motion for an injunction.
The complaint in this case is brought by Troshin on behalf of a prospective class of current and former Stella Orton employees. (See Compl., NYSCEF No. 1, at ¶ 1.) For convenience, this court refers collectively to the named and prospective plaintiffs as "Troshin."
This court concludes that although it is not yet prepared to rule on the underlying motion for injunctive relief, on this record Troshin has failed to establish an entitlement to a TRO. The court therefore grants the attached OSC only to the extent of setting a briefing schedule and oral argument date on the request for preliminary and permanent injunctive relief. The court declines to sign the portion of the OSC granting a TRO.
BACKGROUND
The Relevant Employment Agreements
Named plaintiff Troshin is a home health aide. Defendant, Stella Orton Home Care Agency, provides residential nursing and home health aide services. Troshin worked for Stella Orton from some time in 2004 until January 2015. (See NYSCEF No. 1, at ¶ 16.) Troshin's employment with Stella Orton was governed by a collective bargaining agreement between Stella Orton and plaintiff's union, 1199SEIU United Healthcare Workers East (1199). The most recent such agreement was executed in 2012. (See 2012 CBA, NYSCEF No. 116.) That agreement contained detailed provisions governing wages, hours, and paid time off. (See id. at arts. X, XI, XII, XVII.)
The 2012 CBA also contained an arbitration clause (article XXVI). Article XXVI provides that the CBA governs "any dispute between the Union (on its behalf and/or on behalf of any employee) with the Employer involving the proper application, interpretation, or compliance with the specific written provisions of the Agreement based on facts and circumstances occurring during the term of this Agreement." (Id. at art. XXVI, § 1.) The arbitration provision creates a multi-step process for resolving such disputes. In the fourth and final step of this process, should a dispute remain unresolved, "the Union and/or Employer may within ten (10) days thereafter request that the matter be submitted for final and binding arbitration under the Labor Arbitration Rules of the American Arbitration Association." (Id. at art XXVI, § 2.)
In December 2015—i.e. , after Troshin left his employment with Stella Orton—the union and Stella Orton executed a Memorandum of Agreement that, subject to ratification by the union and its membership, modified several of the provisions of the 2012 CBA, including the arbitration provision. The new arbitration clause expressly subjected all employee claims asserting violations of the federal Fair Labor Standards Act, the New York Home Care Worker Wage Parity Law, or the New York Labor Law, to mandatory arbitration. (See 2015 MOA, NYSCEF No. 115, at 8-9.) The new arbitration clause also imposed mandatory pre-arbitration mediation before a designated neutral (Martin F. Scheinman, Esq.). It provided that should the union seek arbitration of a dispute governed by the new clause, and should the mandatory mediation prove unsuccessful, the union had four months in which to demand arbitration (also to be held before Scheinman). (Id. at 9.) And the clause prohibited class arbitration. (Id. )
The Wage-and-Hour Disputes
In November 2016, Troshin brought this action on behalf of himself and a prospective class of more than one hundred other individuals who were employed by Stella Orton at the time of filing or who previously had been so employed during the class period. (NYSCEF No. 1, at ¶¶ 1, 10.) The complaint alleges, in brief, that beginning in 2010, and continuing through the time of filing, class members had been repeatedly forced to work extremely long hours without receiving wages and benefits to which they were statutorily and contractually entitled. (See id. at ¶¶ 2-4.) It asserted (i) claims for violations of various wage and overtime provisions of the Labor Law and implementing regulations, and (ii) third-party-beneficiary claims for breach of the contract(s) between Stella Orton and various New York State and New York City agencies to pay wages consistent with the terms of the Health Care Worker Wage Parity Law and certain City ordinances. (See id. at ¶¶ 57-101.)
The record reflects that Troshin (as named plaintiff) and Stella Orton then litigated this matter in the ordinary course—including production of discovery and conferences and motion practice before this court—for approximately three years. (See e.g. NYSCEF Nos. 22, 23, 32, 46, 50, 55, 57 [conference orders]; No. 57 [decision & order resolving motion to compel discovery].)
In January 2019, 1199 brought a class grievance, under the terms of the 2015 MOA, by letter to Mediator/Arbitrator Scheinman. The letter stated that 1199 asserted this grievance "on behalf of all its home care bargaining unit members employed by various agencies" (including Stella Orton). The grievance stated that it applied to, among other things, "any ... outstanding wage and hour claims" by its members "arising under the Covered States" (i.e. , FLSA, the Labor Law, and the Home Care Worker Wage Parity Law). (NYSCEF No. 68, at 1, 3.)
In November 2019, Stella Orton moved in this action to compel arbitration under the Federal Arbitration Act (motion sequence 004). (See NYSCEF No. 63.) Stella Orton argued that article XXVI of the 2012 CBA requires mandatory arbitration of Troshin's wage-and-hour claims and that any question relating to arbitrability was for the arbitrator—not a court—to decide in the first instance. (See Mem. of Law in Supp. of Mot., NYSCEF No. 69, at 10-12.)
Troshin has filed papers opposing the motion to compel. The parties have stipulated that Stella Orton's reply papers are due on January 16, 2020, and that the motion is returnable on January 17. (See NYSCEF No. 110.)
On December 24, 2019, Arbitrator Scheinman wrote to numerous attorneys representing parties involved in pending wage-and-hour cases against home health agencies (including counsel for both parties here) to notify them that mediation of the claims asserted by 1199 had proven unsuccessful. (See NYSCEF No. 118.) He noted in particular that a number of counsel representing wage-and-hour plaintiffs had indicated that they were unwilling to follow the mediation process that he had hammered out with 1199 and the agencies; he explained that those counsel "represented former employees that had left employment prior to the signing of the ADR protocol" governing the mediation process and therefore took the position that their clients "were not bound to follow the ADR protocol." (Id. at 1-2.)
Arbitrator Scheinman stated that 1199 "has determined it represents all of the employees' claims and wishes to pursue those claims promptly in arbitration," and that the agencies "agree this is now the proper course." (Id. at 2 [emphasis added].) He therefore scheduled a global arbitration hearing regarding these claims, to begin on January 15, 2020.
Arbitrator Scheinman also stated that "on the first day of the hearing," he would hear argument on two threshold questions relevant here: (i) whether the claims involving former 1199 bargaining unit members were arbitrable; and (ii) whether he had jurisdiction to adjudicate these claims where the employees raising them had left their jobs prior to the effective date of the Memorandum of Agreement imposing the mediation/arbitration procedure under which he was operating. (Id. ) He indicated that the parties—including counsel "who have decided to litigate the identical claims in a court of competent jurisdiction"—could submit pre-arbitration briefs on these issues by January 14, 2020. (Id. )
On January 8, 2020, Arbitrator Scheinman's assistant sent an email to numerous attorneys confirming that a hearing would be held on January 15 and providing a time and location for the hearing. (See NYSCEF No. 120.)
This Motion
On January 13, 2020, Troshin brought on this motion by order to show cause, seeking preliminary and permanent injunctive relief prohibiting arbitration of his claims (and those of members of the prospective class). (See NYSCEF No. 113 [proposed OSC]; No. 114 [Aff. of LaDonna M. Lusher in Supp. of Mot.], at ¶¶ 3, 16.) The OSC includes a provision imposing a TRO barring arbitration of the claims of Troshin and prospective class members pending adjudication of the requests for injunctive relief—and, in particular, barring Arbitrator Scheinman from considering those claims during the scheduled January 15 global arbitration hearing. (See NYSCEF No. 113, at 2.)
Also on January 13, this court heard oral argument from the parties on Troshin's request for a TRO. Upon considering the parties' submissions at argument, Troshin's papers on this motion, and the opening and response papers on Stella Orton's motion to compel arbitration, this court has set a briefing schedule and argument date for Troshin's request for injunctive relief (as reflected in the attached OSC) but has declined to sign the portion of the OSC that requested a TRO. The court notified the parties of this disposition by email on the afternoon of January 13, and now issues this decision & order to explain more fully the reasoning underlying the court's ruling.
Troshin has since submitted two decisions by other justices of this court granting similar TROs in other wage-and-hour actions by home health aides. This court, upon considering those decisions, concludes that the decisions do not alter its analysis, as set forth in further detail below. See note 15, infra .
DISCUSSION
A party seeking a preliminary injunction must clearly demonstrate a likelihood of success on the merits, irreparable harm absent an injunction, and that the balance of the equities tips in the movant's favor. ( Housing Works, Inc. v. City of New York , 255 AD2d 209 [1st Dept 1998].) On a motion for preliminary injunction, a court may, in its discretion, grant a temporary restraining order to prevent immediate, irreparable injury during the pendency of the preliminary injunction motion. (See CPLR 6301.)
This court concludes that, on this record, Troshin's motion papers fail to establish any likelihood of success on the merits of his claims for relief. The court therefore holds that it would not be appropriate to grant a TRO barring Arbitrator Scheinman from considering the arbitrability of Troshin's claims at the scheduled January 15 hearing.
The Issue of Arbitrability
Troshin argues first that this court should issue a TRO barring arbitration of the claims raised in this action because those claims are (assertedly) not required to be arbitrated either under the 2012 CBA or under the 2015 MOA.
This argument has two principal steps. First , Troshin contends that the terms of the 2012 CBA's arbitration clause do not apply to this action because his claims are based on governing statutes, not the terms of the CBA (and that in any event the clause is permissive rather than mandatory). Second , Troshin contends that the 2015 MOA's arbitration clause, which plainly would apply to Troshin's statutory claims, does not govern here, because Troshin left Stella Orton. Thus, Troshin claims, Stella Orton cannot arbitrate his claims with 1199, because those claims simply are not arbitrable. (See Mem. of Law, NYSCEF No. 126, at 8-12.)
These arguments are not without force. But this court cannot reach them—let alone rely upon them in granting a TRO or an injunction—without first resolving the analytically prior issue of whether it is for the court or for the arbitrator to decide arbitrability. And the court concludes that under the particular language of the CBA governing Troshin's employment with Stella Orton, arbitrability is for Arbitrator Scheinman, not this court, to determine.
Whether the Contract in This Case Commits the Question of Arbitrability to the Arbitrator or to the Courts
Although the default rule is that "the question of arbitrability is an issue ... for judicial determination in the first instance," where the parties' agreement clearly evinces a decision to commit arbitrability itself to the arbitrator, the courts will "recognize[ ], respect[ ] and enforce[ ]" that commitment. (See Smith Barney Shearson Inc. v. Sacharow , 91 NY2d 39, 45-46 [1997] ; accord Henry Schein, Inc. v. Archer & White Sales, Inc. , 139 S Ct 524, 527-528 [2019] [holding that courts must enforce the parties' contractual agreement "that an arbitrator, rather than a court, will resolve threshold arbitrability questions as well as well as underlying merits disputes," even where the arguments in favor of arbitrability are "wholly groundless"].)
A contract containing an arbitration clause will be held to "clearly and unmistakably provide" for arbitrability to be decided by the arbitrator rather than a court where (i) the arbitration clause's scope is "broad" rather than "narrow," and (ii) the contract "specifically incorporates by reference the American Arbitration Association (AAA) rules providing that the arbitration panel shall have the power to rule on its own jurisdiction." ( Zachariou v. Manios , 68 AD3d 539, 539 [1st Dept 2009].) This court concludes that the arbitration clause at issue here meets both these requirements.
First , the language of article XXVI of the 2012 CBA provides that the arbitration clause governs "any dispute between the Union (on its behalf and/or on behalf of any employee) involving the proper application, interpretation, or compliance with the specific written provisions of the Agreement based on facts and circumstances occurring during the term of this Agreement." (NYSCEF No. 116, at 30.) This clause is a broad arbitration provision. (See Fairfield Towers Condominium Assoc. v. Fishman , 1 AD3d 252, 253, 254 [1st Dept 2003] [holding that an agreement's arbitration clause governing "all differences arising between the parties ... as to interpretation, application, or performance of any part of this agreement" constituted a "broad" clause, such that certain arbitration-related disputes were for the arbitrator rather than the courts to decide] [alteration in original]. )
Accord Abram Landau Real Estate v. Bevona (123 F3d 69, 71, 74 [2d Cir. 1997] [holding that an arbitration clause committing to arbitration "all differences arising between the parties to this agreement as to interpretation, application, or performance of any part" of the contract" was a "broad" provision] ).
In opposing Stella Orton's motion to compel, Troshin argues that article XXVI is a "narrow" provision in this context because it envisions arbitration only at the option of the "Union and/or employer," not the employee. (NYSCEF No. 116, at 31.) But this language from step four of the contractual grievance procedure must be read in the context of the procedure as whole. The definition of a grievance subject to arbitration in ¶ 1 of article XXVI itself contemplates that in a dispute between employee and employer involving the CBA, the union "on behalf of" the employee. (Id. at 30.) That under ¶ 2 of article XXVI, step one of the grievance/arbitration process involves an employee presenting a grievance to his or her supervisor, and steps two through four of the process involves the union reducing that same grievance to writing and presenting to ever more more senior employees within the employer's hierarchy (and eventually to an arbitrator) (see id. at 30-31), further indicate that this paragraph of the CBA treats the union as acting as an employee's representative when requesting arbitration.
This process would admittedly be an imperfect fit if a three-corner dispute develops among employer, employee, and union (as might be the case here). But the fact that article XXVI of the 2012 CBA did not foresee and address all possible ways in which a dispute relating to the proper application, interpretation, or compliance of the CBA might arise and play out is not, without more, enough to render it a "narrow" rather than "broad" arbitration clause.
Second , article XXVI of the CBA provides that the fourth (and last) step of the contractual dispute-resolution process will be "final and binding arbitration under the Labor Arbitration Rules of the American Arbitration Association." (NYSCEF No. 116, at 31.) Those rules, in turn, expressly provide that "[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement." (NYSCEF No. 69 [quoting rules].) Article XXVI's incorporation of this delegation of authority to the arbitrator, coupled with the article's broad substantive scope, indicates that the question whether Troshin's claims are arbitrable under the 2012 CBA is for the arbitrator, not this court—and thus that this court should not issue a TRO barring arbitration of those claims.
To be sure, Arbitrator Scheinman's December 24, 2019, email announced that he also plans to consider whether the 2015 MOA governs arbitrability of claims by home health employees who (like Troshin) left employment before the MOA's effective date. (See NYSCEF No. 118, at 2.) As Troshin notes in in passing in opposing the motion to compel arbitration, the 2015 MOA, unlike the 2012 CBA, does not incorporate by reference AAA rules delegating arbitrability issues to the arbitrator. (See Mem. of Law, NYSCEF No. 93, at 23 n 2.). This arbitrability inquiry, though, would still necessarily implicate article XXVI of the 2012 CBA. A central aspect of the inquiry is which CBA provision—article XXVI or the new "Alternative Dispute Resolution" article added to the CBA by the 2015 MOA—governs the arbitrability of claims held by individuals who left employment before the effective date of the MOA. And, as noted above, the AAA arbitration rules, incorporated by reference by article XXVI, provide that objections with respect to the scope of the arbitration agreement are for the arbitrator.
A further consideration cutting against issuance of a TRO is that, as Troshin himself acknowledges, the 2015 MOA might well require arbitrating the claims of prospective class members in this action who were still employed by Stella Orton when Troshin commenced the action in November 2016. Yet Troshin requested a TRO that categorically bars arbitration of "Plaintiffs' claims asserted in this action" (NYSCEF No. 113, at 2), without separating out those prospective class members whose claims are governed by the 2015 MOA. Troshin's TRO papers do not explain why this court should risk barring arbitration even of claims required to be arbitrated (or demonstrate that this risk is illusory).
See NYSCEF No. 126, at 3, 25.
Troshin's complaint expressly alleges at the outset that the prospective class includes individuals who "are presently ... employed by The Stella Orton Home Care Agency, Inc." (NYSCEF No. 1, at ¶ 1 [emphasis added].)
Nor, for that matter, do Troshin's papers address any potential interaction between this arbitrability issue and the pending motion for class certification.
Whether the Arbitrability Holdings of Other Decisions in Home-Health-Aide Actions Govern This Case
Troshin argues that decisions of other justices of this court and the Appellate Division, First Department, hold that the question of arbitrability of claims like the ones brought in this action is for the courts, not Arbitrator Scheinman. This court disagrees. The decisions relied upon by Troshin, though superficially similar, are subtly but crucially inapposite here.
Troshin relies principally on three decisions: Lorentti-Herrera v. Alliance for Health, Inc. , Konstantynovska v. Caring Professionals, Inc. , and Hichez v. United Jewish Council of the East Side . Each of these decisions admittedly concerned wage-and-hour claims brought by unionized employees working under a CBA as modified by a later MOA, and each decision resolved the arbitrability of those claims. None of the decisions, though, dealt with a scenario in which—as here—the contractual provision under which the defendant sought to compel arbitration delegated threshold questions of arbitrability to the arbitrator rather than to the courts.
Index No. 155417/2018, NYSCEF No. 30 (Sup Ct, NY County Feb. 7, 2019) (Crane, J.), aff'd (173 AD3d 596 [1st Dept 2019] ).
Index No. 159883/2016, 2018 NY Slip Op 31475 (U) (Sup Ct, NY County July 5, 2018) (Hagler, J.), aff'd as modified (172 AD3d 486 [1st Dept 2019] ).
Index No. 653250/2017, 2018 NY Slip Op 32327 (U) (Sup Ct, NY County Sept. 18, 2018) (Freed, J.).
Konstantynovska involved a CBA and MOA entered into by a different union from 1199. (See generally Index No. 159883/2016, NYSCEF Nos. 14, 25.) The CBA's arbitration clause in that case, though it set forth a similar multi-step grievance process to article XXVI here, contained no language delegating arbitrability questions to the arbitrator (either expressly or through incorporation by reference). (See Index No. 159883/2016, NYSCEF No. 25, at 7-8.) The later MOA modified the CBA to provide that statutory wage-and-hour claims would be governed only by a new CBA article (see id. , NYSCEF No. 14, at 1-2), which again did not delegate arbitrability questions to the arbitrator rather than the courts (see id. at 2, 3).
In both Lorentti-Herrera and Hichez , the plaintiffs were workers represented by 1199. In each case, the original CBA did contain an arbitration provision incorporating by reference the AAA arbitration rules, and the CBA was supplemented by a later MOA adding a new arbitration provision that neither expressly delegated threshold arbitrability questions to the arbitrator nor incorporated the AAA rules doing so. And in each case, the defendant, in moving to compel arbitration, relied only on the 2015 MOA—not on the prior CBA.
See Lorentti-Herrera (Index No. 155417/2018, NYSCEF No. 8, at 16-17 [CBA]; No. 10, at 4-5 [MOA] ); Hichez (Index No. 653250/2017, NYSCEF No. 8, at 28-30 [CBA]; No. 10, at 8-10 [MOA] ).
See Lorentti-Herrera (Index No. 155417/2018, NYSCEF Nos. 6, 22); Hichez (Index No. 653250/2017, NYSCEF Nos. 15, 48). The same was true in Guzman v. First Chinese Presbyterian Community Affairs Home Attendant Corp. (Index No. 157401/2016, 2019 NY Slip Op 30895 [U], at *5 [Sup Ct, NY County April 5, 2019] [Freed, J.] ), also cited by Troshin here.
In other words, the arbitration provisions relied upon by the defendants in Lorentti-Herrera , Konstantynovska , Hichez , and Guzman did not contain the crucial contractual language delegating threshold arbitrability questions to the arbitrator. The courts in those cases thus, unsurprisingly, applied the longstanding rule that arbitrability is a matter for judicial determination unless the parties have clearly agreed otherwise. (See Sacharow , 91 NY2d at 45-46.)
In this case, on the other hand, Stella Orton has sought to compel arbitration based in part upon the 2012 CBA's arbitration provision, which does clearly delegate arbitrability questions to the arbitrator. (See NYSCEF No. 69, at 10-13.) The holdings and reasoning of those prior decisions do not apply here in light of the material factual difference between them and this case. This court must instead resolve Troshin's request for a TRO in light of the particular contractual language governing this case. And given that language, Troshin has failed to show that he has any likelihood of succeeding in his argument that this court, not Arbitrator Scheinman, should decide the threshold questions of arbitrability.
Troshin has submitted today two decisions rendered since argument by justices of this court, each of which granted TROs in similar home-health-aide actions. This court, upon carefully considering those decisions, concludes that they do not alter the court's analysis here. One decision, issued by Justice Kathryn E. Freed in the Guzman action, carries forward the court's prior ruling that the plaintiffs there did not have to arbitrate their claims. See Guzman (Index No. 157401/2016, NYSCEF No. 78). Those rulings, though, are inapposite under the particular circumstances of this case, as discussed above. The other decision was issued by Justice David B. Cohen in Pustilnik v. Premier Home Health Care Services Inc. (Index No. 155081/2016). But the CBA's arbitration clause in Pustilnik —like the clause in Konstanynovska but unlike the clause here—did not expressly or by reference delegate threshold arbitrability questions to the arbitrator. (See Index No. 155081/2016, NYSCEF No. 7, at 34-36.) The reasoning of Justice Cohen's rulings in Pustilnik thus does not carry over to this case.
The Issue of Waiver
Troshin also argues that Stella Orton has waived its right to compel arbitration by actively litigating this case for three years—and that the issue of waiver is for this court rather than the arbitrator to decide. (See NYSCEF No. 126, at 15-16.) But this court is not persuaded that Troshin has established at this stage that his waiver argument is likely to succeed on the merits. Although Troshin is correct that a party may waive its right to compel arbitration through litigation-related conduct, and that this issue is for the courts to decide (see Skyline Steel, LLC v. PilePro LLC , 139 AD3d 646, 647 [1st Dept 2016] ), he has not established that this principle should govern the outcome here.
Skyline Steel , and the other cases cited by Troshin on this point, addressed waiver by the party seeking to compel arbitration. Indeed, that is how Troshin frames the issue: whether "[d]efendant has waived its right to compel arbitration." (NYSCEF No. 126, at 15.) But Arbitrator Scheinman did not schedule the January 15, 2020, arbitration hearing on Troshin's claims (and those of many others) based on a ruling on a motion to compel by Stella Orton, but pursuant to a request for arbitration by 1199 . (See NYSCEF No. 118, at 2.)
Troshin's union (or former union) plainly is not a party here. And Troshin does not even attempt to establish that a non-party's desire to arbitrate can be waived or otherwise precluded by a party's litigation conduct—much less that this waiver question must be decided by the courts rather than an arbitrator. This court need not—and does not—definitively decide this question here. It suffices for present purposes that this court is unwilling to grant a TRO in factual circumstances that the movant has not addressed.