A Brief Essentially Devoid of Any Legal Analysis or Citations

September 18, 2019

For those of you playing the at-home version of "Lawsuit," the $500 question is how do you think the federal court ruled when its Order begins with this observation: "In a brief essentially devoid of any legal analysis or citations, Plaintiff's counsel claims the parties' arbitration agreement is inapplicable or void."

The Amended Complaint

On October 15, 2018, Plaintiff Nordia Rosner filed an Amended Complaint in the United States District Court for the Southern District of New York ("SDNY") pursuant  to Title VII of the Civil Rights Act of 1964; the New York State Human Rights Law, and the New York City Administrative Code Title 8. Nordia Rosner, Plaintiff, v. Foresters Financial Holding Company, Inc., Defendant (Amended Complaint, SDNY, 18-CV-4451 / October 15, 2018) 

As alleged in the Amended Complaint, Plaintiff Rosner is a black female of Jamaican origin who was hired on October 14, 2015, to work for Defendant Foresters as an Executive Assistant. The Amended Complaint alleges in part that:

9. On her first day of employment, Rosner was required to fill out paperwork, including an arbitration agreement with her employer at the time, relating to her temporary employment. 

10. Rosner was also advised that, in the future, there may be a full time position that becomes available. 

11. After working at Forester for approximately two months, Rosner applied for and was ultimately hired into a full time position at Forester. This position was wholly separate from the temp position that she had been working in, through a staffing agency, and was accompanied with additional duties, responsibilities, salary, and benefits. 

12. Rosner began working full time for Foresters on or about January 4, 2016. At this time, she was not required to sign an arbitration provision for this new position for which she was hired. 

13. Rosner was hired as the Executive Assistant to the Chief Compliance Officer and the Chief Legal and Regulatory Officer (General Counsel) and was also expected to support the Board of Directors of the First Investors Fund. 

14. Upon beginning her full time employment, Rosner requested a letter from Human Resources delineating the terms of her employment, including her title, compensation, benefits, and duties and responsibilities. On numerous occasions, Rosner was given excuses as to why such a letter could not be provided at that time. Her similarly situated coworkers, who hold similar positions and are outside her protected class(es), have received such a letter and, upon information and belief, were compensated at a higher rate than Rosner, even where they were hired subsequent to her. 

15. Moreover, shortly into her tenure, Rosner noticed that her job duties were being reduced, with her being relegated largely to clerical functions such as copying and filing, while her similarly situated coworkers, outside of her protected class(es) are assigned more significant work. 

16. In addition, Rosner identified a disparity in how black employees are treated versus Caucasian employees, included in seating assignments and grouping, as well as in the level of work that was assigned, with one example being that a Caucasian intern was consistently assigned to participate in meetings and more meaningful projects, while Rosner, as a full time employee, was relegated to copying.

Picking up the thread of events from there, in December 2016, Rosner field a discrimination complaint with the Equal Employment Opportunity Commission ("EEOC"). Thereafter, in January 2018, she submitted a complaint to Foresters alleging that she had been subjected to retaliation. In its May 15, 2018 response, Foresters informed Rosner that her claims of retaliation were found to be unsubstantiated and without merit. On May 17, 2018, EEOC issued a Right to Sue letter and, on that same day, Foresters terminated Rosner. 

Motion to Compel Arbitration

Defendent Foresters moved SDNY to stay Rosner's action and to compel arbitration. In Plaintiff's six-page Memo of Law opposing the stay and remand to arbitration, it is argued that Defendant Foresters wrongly relies upon its Employee Handbook in support of its contention that the arbitration agreement signed before Rosner became an employee with Defendant was still applicable. Pointedly, Claimant cites the very language of the Employee Handbook that states "I understand that the Handbook is not a contract of employment . . . " at Page 3 of Nordia Rosner, Plaintiff, v. Foresters Financial Holding Company, Inc., Defendant (Plaintiff's Memorandum of Law in Opposition to Defendant's Motion to Compel Arbitration and Stay This Action, SDNY, 18-CV-4451 / December 10, 2018) http://brokeandbroker.com/PDF/RosnerMemoOppSDNY181210.pdf

The Temp Position Versus The Full-Time Position

Plaintiff Rosner asserts there is no arbitration agreement in place pertaining to her full-time employment with Defendant Foresters. Whatever arbitration agreement exists must be restricted to the temporary work that she provided through a staffing agency for two months, and said agreement must not extended to cover her full time position directly with Defendant. As to that full-time employment, Plaintiff alleged that:

[T]his position was not obtained through the staffing agency and was wholly different and separate from the temporary position that she was working in previously, through the staffing agency. This position was also not simply a continuation of her prior temp work, but in a more full timer role. Rather, Rosner applied for, and was hired, for a job that was separate and independent from her prior temp work. . . .

At Page 3 of the Memo 

Not Governed By. Not Regulated By.

Finally, Plaintiff argues a "special circumstance" makes it illogical for the Court to order FINRA arbitration:

[P]ursuant to the arbitration agreement at issue, any arbitration, in the first instance, is to proceed through the Financial Industry Regulatory Authority ("FINRA"), Howeer, neither Rosner nor Defendant is governed by FINRA. Rosner has never been a member of FINRA. According to FINRA's own website, Defendant is also not regulated by FINRA . . .

At Page 4 of the Memo 

The Court Order

There are times when you have to read a court's entire Order or Opinion in order to figure out who wins. Then there are times where the decision is telegraphed in the opening remarks. In the case of the Motion pending before SDNY, we pretty much get the message by the second sentence of the opening paragraph:

Defendant Foresters Financial Holding Company, Inc. ("Foresters") moves to compel Plaintiff Nordia Rosner to arbitrate her claims of employment discrimination. In a brief essentially devoid of any legal analysis or citations, Plaintiff's counsel claims the parties' arbitration agreement is inapplicable or void. For the reasons discussed below, the Court STAYS this action and GRANTS Defendant's motion to compel arbitration

At page 1 of Nordia Rosner, Plaintiff, v. Foresters Financial Holding Company, Inc., Defendant (Order, SDNY, 18-CV-4451 / September 10, 2019) 

In an apparent demonstration of the power and artistry of citations, the SDNY notes in part that:

In this case, there is no dispute that Plaintiff signed an arbitration agreement with Foresters Financial, or that the agreement covers the types of employment discrimination claims alleged in the Amended Complaint. See Pl. Br. (Dkt. 25) at 2-4; Gold v. Deutsche Aktiengesellschaft, 365 F.3d 144, 149 (2d Cir. 2004) ("[I]n the absence of fraud or other wrongful act on the part of another contracting party, a party ‘who signs or accepts a written contract . . . is conclusively presumed to know its contents and to assent to them.'" (quoting Metzger v. Aetna Ins. Co., 227 N.Y. 411, 416 (1920))). Courts in this circuit have also consistently compelled arbitration pursuant to arbitration clauses containing language similar to that in the Agreement. See, e.g., Bellevue v. Exxon Mobile Corp., No. 19-CV-652, 2019 WL 1459041, at *2 (E.D.N.Y. Apr. 2, 2019); Falcone Bros. P'ship v. Bear Stearns & Co., 699 F. Supp. 32, 35 (S.D.N.Y. 1988); Fleming v. J. Crew, No. 16-CV-2663, 2016 WL 6208570, at *1 (S.D.N.Y. Oct. 21, 2016); Moss v. Rent-A-Ctr., Inc., No. 06-CV-3312, 2007 WL 2362207, at *1 (E.D.N.Y. Aug. 15, 2007); see also McAllister v. Connecticut Renaissance Inc., 496 Fed. App'x 104, 106 (2d Cir. 2012).

Plaintiff primarily argues that her claims are beyond the scope of the Agreement because they arose out of her full-time employment, not the temporary position for which she was hired when she signed the Agreement. See Pl. Br. at 2-4. The fact that Plaintiff did not sign a separate arbitration agreement when she began her full-time position is immaterial because the Agreement does not contain a temporal or job-specific limitation. See Moss, 2007 WL 2362207, at *8 ("Broadly phrased arbitration agreements create a presumption of arbitrability which is only overcome if the arbitration agreement is not susceptible to an interpretation that covers the dispute." (citing Bank Julius Baer & Co. v. Waxfield Ltd., 424 F.3d 278, 284 (2d Cir. 2005))). Rather, the Agreement unambiguously extends to all claims "past, present, or future," between Plaintiff and the Company and its affiliates, "whether or not" those claims "ar[ise] out of [Plaintiff's] association" with Foresters Financial. Agreement at 1. Because of the breadth of that contractual language, a subsequent agreement would have been redundant. 

Plaintiff otherwise argues that the Agreement should not apply because neither party is an entity regulated by FINRA, making FINRA an inappropriate arbitral forum.See Pl. Br. at 4. The Agreement, however, has anticipated the possibility that FINRA may not be available to arbitrate a dispute. In such cases, the Agreement requires the parties to arbitrate through JAMS-which Plaintiff does not contend would be in any way improper. See Agreement at 2. Thus, Plaintiff's argument as to FINRA is simply irrelevant to Foresters' motion, which does not seek to seek to compel arbitration before FINRA specifically. . . .

= = = = =

Footnote 1: Plaintiff also contends that Defendant's Employee Handbook, which is separate from the Agreement, is an illusory contract that is not binding on Plaintiff. See Pl. Br. at 3. The Court declines to rule on the significance, if any, of the Handbook because Plaintiff is obligated to arbitrate pursuant to the terms of the Agreement alone.

Pages 3 - 4 of the SDNY Order

Bill Singer's Comment

I understand SDNY's points and analysis. Unfortunately, I don't find myself persuaded by the Court's rationale based upon my understanding of the underlying facts. As I see it, Plaintiff Rosner makes a fair point that executed agreements secured in the discharge of a part-time position secured through the introduction/efforts of a staffing agency should not be carried over as the controlling terms of a full-time position secured through her own efforts. 

By way of analogy, imagine the circumstance of an individual, who is first employed by a law firm as a part-time paralegal hired through the referral of a placement agency. After attending law school at night, that same employee becomes a lawyer and is hired by the law firm as an associate lawyer. I'm not sure that I would necessarily agree that the "lawyer" was still governed by the same employment agreements as the "paralegal." I would think the same would apply for many similar changes in employment status -- not for all changes though. If a given employee was "promoted" up the chain of command, for example, I would find it fair and consistent to hold said employee to prior employment agreements. What troubles me with Rosner is that the case appears to hold a part-time employee subject to the terms of employment under which a full-time employee works; and then there are further exacerbating factors such as the temporary agency, the direct-hire, and the relatively dramatic changes in duties and responsibilities. I'm not saying that the Plaintiff should prevail on her claims, but I am saying that whether she should be held to the terms of her part-time employment after she became a full-time employee seem triable issues of fact. 

Similarly, I'm not quite sure that you can (or should) simply view a requirement to arbitrate before FINRA as a mere inconvenience that opens the door to an alternative choice of forum in the name of JAMS -- which becomes all the more bizarre when neither party to the contemplated litigation is even subject to FINRA's jurisdiction. SDNY's Order forces Plaintiff into mandatory FINRA arbitration, but, ahem, not really, since neither Plaintiff nor Defendant is subject to FINRA jurisdiction. As such, the whole FINRA-choice-of-forum tends to devolve into something that looks like an unintended ruse or sham to funnel disputes to JAMS. 

More troubling for me is that Plaintiff's case involves allegations of racial discrimination and retaliation. Those are very serious issues. I'm not quite sure that the purported "notice" of mandatory FINRA/JAMS arbitration of discrimination/retaliation claims is clearly and unequivocally conveyed to all Foresters employees. All of which raises concerns about constitutional due process and whether a given party knowingly waived the right to litigate an alleged claim citing a violation of constitutional rights.

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