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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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TIFFANY RYAN, individually and on behalf of
all others similarly situated,
Plaintiff,
v.
JPMORGAN CHASE & CO., and JPMORGAN
CHASE BANK, N.A.,
Defendants.
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MEMORANDUM DECISION
12 CV 4844 (VB)
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Briccetti, J.:
Plaintiff Tiffany Ryan, a former Assistant Branch Manager of JPMorgan Chase Bank,
N.A. (“Chase”), brings this putative collective action alleging defendants violated the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. §§ 201-219. Specifically, plaintiff alleges defendants failed
to compensate her and others similarly situated for lawful overtime wages.
Defendants move to dismiss the action, or in the alternative stay it, and to compel
arbitration of Ryan’s claim on an individual basis pursuant to the Federal Arbitration Act
(“FAA”), 9 U.S.C. §§ 1-16. (Doc. #2).
For the reasons set forth below, defendants’ motion to dismiss and to compel arbitration
is GRANTED.
The Court has jurisdiction under 28 U.S.C. §§ 1331 and 1337.
BACKGROUND
For the purpose of ruling on this motion, the Court considers only the evidence relevant
to defendants’ motion to dismiss and to compel arbitration.
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In March 2010, Chase hired plaintiff as an Assistant Branch Manager. Upon accepting
her employment, plaintiff signed a Binding Arbitration Affirmation (“Affirmation”), dated
March 11, 2010, which provides in pertinent part:
I understand my employment is subject to my and JPMorgan Chase’s
agreement to submit employment-related disputes that cannot be resolved
internally to binding arbitration, as set forth in the Binding Arbitration Agreement
. By signing
below I acknowledge and agree that I have read and understand the Binding
Arbitration Agreement, have accepted its terms and understand that it is a
condition of my employment with JPMorgan Chase.
The Binding Arbitration Agreement (“BAA”) to which the Affirmation refers contains
the following:
As a condition of and in consideration of my employment with JPMorgan
Chase & Co. or any of its direct or indirect subsidiaries, I agree with JPMorgan
Chase as follows:
1. SCOPE: Any and all “Covered Claims” (as defined below) between
me and JPMorgan Chase . . . shall be submitted to and resolved by final and
binding arbitration in accordance with this Agreement.
2. COVERED CLAIMS: “Covered Claims” include all legally protected
employment-related claims, . . . that I have or in the future may have against
JPMorgan Chase . . . which arise out of or relate to my employment or separation
from employment with JPMorgan Chase . . . including, but not limited to, claims .
. . [under] the Fair Labor Standards Act of 1938 . . . .
. . . .
4. CLASS ACTION/COLLECTIVE ACTION WAIVER: All Covered
Claims under this Agreement must be submitted on an individual basis. No
claims may be arbitrated on a class or collective basis. Covered Parties
expressly waive any right with respect to any Covered Claims to submit, initiate,
or participate in a representative capacity or as a plaintiff, claimant or member in
a class action, collective action, or other representative or joint action, regardless
of whether the action is filed in arbitration or in court. Furthermore, if a court
orders that a class, collective, or other representative or joint action should
proceed, in no event will such action proceed in the arbitration forum. Claims
may not be joined or consolidated in arbitration with disputes brought by other
individual(s), unless agreed to in writing by all parties.
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. . . .
7. ARBITRATION PROCEEDINGS: . . . . (a) Fees: All ordinary and
reasonable administrative expenses of the arbitration, including fees for a single
arbitrator, hearing room expenses, travel expenses of the arbitrator, the AAA
representatives (if applicable), and any witnesses produced at the arbitrator’s
specific request and not otherwise called by a party, will be paid completely by
JPMorgan Chase. . . . Except as otherwise provided by law, all attorney’s fees
shall be paid by the party that incurs them.
DISCUSSION
I. Standard of Review
“In the context of motions to compel arbitration brought under the Federal Arbitration
Act, the court applies a standard similar to that applicable for a motion for summary judgment.”
Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003) (citations omitted). Accordingly, the
Court must grant a motion to compel arbitration if the pleadings, discovery materials before the
Court, and any affidavits show there is no genuine issue as to any material fact and it is clear the
moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp
v. Catrett, 477 U.S. 317, 322 (1986).
A fact is material when it “might affect the outcome of the suit under the governing law. .
. . Factual disputes that are irrelevant or unnecessary” are not material and thus cannot preclude
summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
A dispute regarding a material fact is genuine if there is sufficient evidence upon which a
reasonable jury could return a verdict for the nonmoving party. See id. The Court “is not to
resolve disputed issues of fact but to assess whether there are any factual issues to be tried.”
Wilson v. Nw. Mut. Ins. Co., 625 F.3d 54, 60 (2d Cir. 2010) (citation omitted). It is the moving
party’s burden to establish the absence of any genuine issue of material fact. Zalaski v. City of
Bridgeport Police Dep’t, 613 F.3d 336, 340 (2d Cir. 2010).
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The party opposed to arbitrating its claim “bears the burden of proving that the claims at
issue are unsuitable for arbitration.” Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91
(2000) (citations omitted). In addition, the party claiming the arbitration agreement is invalid
“on the ground that arbitration would be prohibitively expensive, . . . bears the burden of
showing the likelihood” that such costs will be incurred. Id. at 92.
If the Court finds the arbitration agreement is valid, and the claim is arbitrable, the Court
may dismiss the case and order the parties to arbitrate. See Cohen v. UBS Fin. Servs., Inc., 2012
WL 6041634, at *2 (S.D.N.Y. Dec. 4, 2012) (citing LaVoice v. UBS Fin. Servs., Inc., 2012 WL
124590, at *2 (S.D.N.Y. Jan. 13, 2012)); Reynolds v. de Silva, 2010 WL 743510, at *8-9
(S.D.N.Y. Feb. 24, 2010) (“[A]ll courts of which we are aware have followed the rule that,
where all of the issues raised in the Complaint must be submitted to arbitration, the Court may
dismiss an action rather than stay proceedings.” (internal quotation marks and citations omitted)).
II. Arbitrability of Plaintiff’s Claim Under the FAA
A. The FAA
“The FAA was enacted in 1925 in response to widespread judicial hostility to arbitration
agreements.” AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1745 (2011) (citation
omitted). The FAA “establishe[d] that, as a matter of federal law, 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). Thus, the FAA reflects “both a liberal federal
policy favoring arbitration, and the fundamental principle that arbitration is a matter of contract.”
AT&T Mobility LLC v. Concepcion, 131 S. Ct. at 1745 (internal quotation marks and citations
omitted). But, “‘by agreeing to arbitrate a statutory claim, a party does not forgo the substantive
rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial,
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forum.’” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991) (quoting Mitsubishi
Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985)).
To decide a motion to compel arbitration of a plaintiff’s claim founded on statutory rights,
the district court must determine: (1) whether the parties agreed to arbitrate; (2) the scope of that
agreement; and (3) “if federal statutory claims are asserted, . . . whether Congress intended those
claims to be nonarbitrable.” Genesco, Inc. v. T. Kakiuchi & Co., Ltd., 815 F.2d 840, 844 (2d Cir.
1987) (citing Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. at 626-29).
The parties agree that plaintiff signed an employment contract containing the BAA and
thus agreed to arbitration; her claim is within the scope of the BAA because it arises out of her
employment; and Congress intended FLSA claims to be arbitrable. Nevertheless, plaintiff
contends the BAA is unenforceable because (i) the right to collective action cannot be waived,
(ii) she will be prevented from vindicating her statutory rights if she has to arbitrate individually,
and (iii) the BAA is contrary to federal policy expressed in the National Labor Relations Act
(“NLRA”), 29 U.S.C. §§ 151-69, and the Norris-LaGuardia Act (“NLA”), 29 U.S.C. §§ 101-15.
B. A Collective Action Waiver is Not Per Se Unenforceable
In AT&T Mobility LLC v. Concepcion, the Supreme Court struck down California’s
prohibition on class waivers in consumer arbitration agreements, reasoning that “[r]equiring the
availability of classwide arbitration interferes with fundamental attributes of arbitration and thus
creates a scheme inconsistent with the FAA.” AT&T Mobility LLC v. Concepcion, 131 S. Ct. at
1748. Following AT&T Mobility, the Second Circuit noted that class waivers are not per se
unenforceable so long as the plaintiff has the opportunity to vindicate her statutory rights. See In
re Am. Express Merch. Litig. (“Amex III”), 667 F.2d 204, 219 (2d Cir. 2012). This comports with
decisions in other circuits, which have found the right to proceed collectively is procedural, and
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thus can be waived. See Torres v. United Healthcare Servs., Inc., 2013 WL 387922, at *4 & n.2
(E.D.N.Y. Feb. 1, 2013) (noting the Second Circuit has not addressed the issue of collective action
waivers in FLSA cases, but the Fourth, Fifth, and Ninth Circuits have upheld such waivers).
Following this clear precedent, this Court concludes collective action waivers are not per
se unenforceable due to the “FAA’s ‘overarching purpose’ of ‘ensur[ing] the enforcement of
arbitration agreements according to their terms so as to facilitate streamlined proceedings.’”
LaVoice v. UBS Fin. Servs., Inc., 2012 WL 124590, at *6 (quoting AT&T Mobility LLC v.
Concepcion, 131 S. Ct. at 1748). The Court is not persuaded by the few non-binding reported
decisions which have held to the contrary. See, e.g., Raniere v. Citigroup Inc., 827 F. Supp. 2d
294 (S.D.N.Y. 2011), appeal docketed, No. 11-5213 (2d. Cir. Dec. 15, 2011); D.R. Horton, Inc.,
357 N.L.R.B. No. 184, 2012 WL 36274, at *1 (Jan. 3, 2012), appeal docketed sub nom D.R.
Horton, Inc. v. NLRB, No. 12-60031 (5th Cir. Jan. 13, 2012).1
Therefore, plaintiff’s contention that her right to proceed collectively under the FLSA
cannot be waived is without merit.
C. Statutory Rights Analysis
Plaintiff’s second argument turns on whether the BAA is unenforceable because it
precludes her from vindicating her federal statutory rights under the FLSA. The Second Circuit
has partly addressed this issue in a series of recent decisions. See generally Amex III, 667 F.3d
204 (2d Cir. 2012).
1 Defendants note the Court of Appeals for the District of Columbia Circuit recently vacated
D.R. Horton because it was decided by an unconstitutionally constituted panel of the NLRB. See
Noel Canning v. NLRB, 2013 WL 276024, *1 (D.C. Cir. Jan. 25, 2013) (rejecting certain
Presidential recess appointments). Because the Court finds D.R. Horton unpersuasive, it need
not address the decision’s constitutionality.
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In In re Am. Express Merch. Litig. (“Amex I”), 554 F.3d 300 (2d Cir. 2009), an antitrust
case involving a commercial contract containing a collective action waiver, the court joined other
circuits in analyzing the waiver “under the federal substantive law of arbitrability.” Id. at 312. It
specifically adopted the Eleventh Circuit’s reasoning, finding a class action waiver should be
evaluated on a case-by-case basis, considering “‘the fairness of the provisions, the cost to an
individual plaintiff of vindicating the claim when compared to the plaintiff’s potential recovery,
the ability to recover attorneys’ fees and other costs and thus obtain legal representation to
prosecute the underlying claim,’” the practical impact of the waiver, and related public policy.
Id. at 321 (quoting Dale v. Comcast Corp., 498 F.3d 1216, 1224 (11th Cir. 2007)).
Taking these factors into consideration, the court in Amex I found the class action waiver
at issue was unenforceable because the plaintiff demonstrated arbitration would be “prohibitively
expensive.” Id. at 315-16. It reasoned that plaintiff’s expert, who reviewed the case to
determine the “economic rationality of bringing an individual action against Amex,” found the
median plaintiff had a potential recovery of treble damages for $5,252. Id. at 316-17. Further,
the expert concluded it “would not be worthwhile for an individual plaintiff . . . to pursue
individual arbitration or litigation where the out-of-pocket costs, just for the expert economic
study and services, would be at least several hundred thousand dollars, and might exceed $1
million.” Id. at 317.
The Supreme Court vacated Amex I, and remanded for reconsideration in light of Stolt-
Nielsen S.A. v. AnimalFeeds Int’l Corp., 130 S. Ct. 1758, 1773-75 (2010), which held class
arbitration could not be imposed on parties who had not otherwise agreed to it. Am. Express Co.
v. Italian Colors Rest., 130 S. Ct. 2401 (2010). Upon rehearing, the Second Circuit adhered to its
analysis in Amex I and found its decision “unaffected by Stolt-Nielsen.” In re Am. Express
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Merch. Litig. (“Amex II”), 634 F.3d 187, 189 (2d Cir. 2011). The court reasoned that its “prior
holding focused not on whether the plaintiffs’ contract provides for class arbitration, but on
whether the class action waiver is enforceable when it would effectively strip plaintiffs of their
ability to prosecute alleged antitrust violations.” Id. at 193-94.
Then, after the Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, the
Second Circuit sua sponte reexamined its Amex II decision. Amex III, 667 F.3d at 206. In
Amex III, the court stood by its two prior decisions and held that “as the class action waiver in
this case precludes plaintiffs from enforcing their statutory rights, . . . the arbitration provision
[is] unenforceable.” Id. at 218-19. Noting that plaintiffs need “to have the opportunity to
vindicate their statutory rights,” id. at 219, the court explained that “the cost of plaintiffs’
individually arbitrating their dispute with Amex would be prohibitive, effectively depriving
plaintiffs of [their] statutory protection.” Id. at 217.2
Several judges in this District have applied the Amex line of cases to determine whether
an arbitration agreement prevented plaintiffs from vindicating their statutory rights. Class action
waivers have been held unenforceable when plaintiff claimed damages of $3,734.04, expert fees
totaling $58,500, and attorney’s fees of $166,000 that were not recoverable in arbitration,
Sutherland v. Ernst & Young LLP, 768 F. Supp. 2d 547, 551-52 (S.D.N.Y. 2011), or when
plaintiff brought a Title VII pattern or practice claim that could only be pursued as a class, Chen-
Oster v. Goldman, Sachs & Co., 785 F. Supp. 2d 394, 408-09 (S.D.N.Y. 2011). In contrast, class
action waivers have been upheld when each plaintiff’s individual damages exceeded $45,000,
2 The Supreme Court has granted certiorari to review Amex III. Am. Express Co. v. Italian
Colors Rest., 133 S. Ct. 594 (2012). The question presented is: “Whether the Federal
Arbitration Act permits courts, invoking the ‘federal substantive law of arbitrability,’ to
invalidate arbitration agreements on the ground that they do not permit class arbitration of a
federal-law claim.”
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Cohen v. UBS Fin. Servs., Inc., 2012 WL 6041634, at *5, or when plaintiffs would not likely
incur substantial expert fees and could recover attorney’s fees in arbitration, LaVoice v. UBS
Fin. Servs., Inc., 2012 WL 124590, at *7-8. See also Torres v. United Healthcare Servs., Inc.,
2013 WL 387922, at *7-8 (distinguishing Sutherland because plaintiff failed to provide costs of
pursuing individual claims).
Applying the facts of this case to the law as enunciated by the Second Circuit, and
considering the FAA’s “liberal federal policy favoring arbitration,” the Court finds plaintiff has
failed to satisfy her burden to show that arbitrating her claim individually precludes her from
vindicating her statutory rights. Plaintiff estimates she has $9,817.50 in damages for her
overtime claim, including liquidated damages, and her opposition papers note she individually
“will pursue higher damages in this action.”3 Therefore, at a minimum, plaintiff’s damages are
almost double those pursued in Amex and almost three times those pursued in Sutherland. See
Amex I, 554 F.3d at 317; Sutherland v. Ernst & Young LLP, 768 F. Supp. 2d at 551. See also
Miguel v. JPMorgan Chase Bank, N.A., 2013 WL 452418, at *7 (C.D. Cal. Feb. 5, 2013)
(upholding JPMorgan’s BAA despite plaintiff’s estimated recovery of less than $1,200). And
plaintiff’s costs are substantially less than in Amex or Sutherland: plaintiff does not allege she
will incur expert fees, the BAA obligates defendants to pay the costs of arbitration, and, under 29
U.S.C. § 216(b), defendants will pay plaintiff’s reasonable attorney’s fees if she prevails in
arbitration. Compare Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115, 118-19 (2d Cir.
2010) (rejecting arbitration agreement that contained a fee-shifting provision requiring plaintiff
to pay defendant’s attorney’s fees).
3 Defendants estimate plaintiff’s damages claim as $42,751.80, based on plaintiff’s calculations
and the complaint.
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At bottom, the Court finds the BAA’s class action waiver is fair, permits plaintiff to
vindicate her statutory rights under the FLSA, does not hinder her ability to recover attorney’s
fees or costs, and comports with public policy favoring arbitration and honoring private
contracts. Accordingly, plaintiff has failed to satisfy her burden to show that “the claims at issue
are unsuitable for arbitration,” and that “arbitration would be prohibitively expensive.” Green
Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. at 91-92.
D. Arbitrability of Plaintiff’s Claim Under Other Federal Statutes
Plaintiff’s next contends the BAA is unenforceable because it violates both the NLA and
the NLRA.
These arguments are without merit. First, the NLA does not apply to arbitration
agreements like the BAA. See 29 U.S.C. § 103(a), (b); Movant v. P.F. Chang’s China Bistro,
Inc., 870 F. Supp. 2d 831, 843-44 (N.D. Cal. 2012). Second, this Court joins numerous other
courts in finding the NLRA does not determine whether a plaintiff has a right to bring a
collective action under the FLSA, see, e.g., Miguel v. JPMorgan Chase Bank, N.A., 2013 WL
452418, at *7; Torres v. United Healthcare Servs., Inc., 2013 WL 387922, and in rejecting the
reasoning of D.R. Horton, 357 N.L.R.B. No. 184, 2012 WL 36274, and Owen v. Bristol Care,
Inc., 2012 WL 1192005 (W.D. Mo. Feb. 28, 2012), rev’d, 702 F.3d 1050 (8th Cir. 2013).4
4 Because the Court finds the NLA and NLRA do not preclude individual arbitration, it need not
reach the parties’ arguments whether the FAA, NLA, and NLRA are in conflict.
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CONCLUSION
Defendants’ motion to dismiss is GRANTED, and the parties are ordered to arbitrate
plaintiff’s claim under the Binding Arbitration Agreement.
The Clerk is instructed to terminate the motion (Doc. #2) and close this case.
Dated: February 21, 2013
White Plains, NY
SO ORDERED:
____________________________
Vincent L. Briccetti
United States District Judge
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