Owens v. PricewaterhouseCoopers LLC

Background

Nina Owens alleged that PwC recruited her in 2019 to develop its credit-card consulting business but that coworkers and supervisors limited her opportunities, took credit for her work, treated her hostilely, and discriminated against her based on age, race, and gender. She also alleged retaliation after she complained about gender-based harassment and filed an ethics and compliance complaint. PwC’s board later forced her withdrawal from the firm shortly before benefits would vest under her allegations.

Owens brought federal, state, and city discrimination and retaliation claims and an Employee Retirement Income Security Act claim. Her partnership agreement contained an arbitration provision covering claims or controversies arising from the agreement or the firm’s business. After Owens filed this lawsuit, PwC began a separate American Arbitration Association proceeding asserting that she breached noncompetition and client-solicitation provisions of the agreement.

Motion to Compel Arbitration

The court denied PwC’s motion to compel arbitration. The court applied the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which makes a predispute arbitration agreement unenforceable, at the election of the person alleging the conduct, with respect to a court case relating to a sexual-harassment dispute.

The court held that, for this purpose, sexual harassment under the New York City Human Rights Law means unwelcome verbal or physical behavior based on a person’s gender, whether or not the behavior is lewd or sexual. The court rejected an approach requiring romantic, sexual, or lewd conduct. It also held that a plaintiff must allege conduct constituting sexual harassment, rather than relying only on the fact that the plaintiff asserted a general gender-discrimination claim.

The court found that Owens plausibly alleged such conduct based on her allegations that Vishal Rawal verbally threatened and berated her, publicly denigrated her, yelled at her, and treated her differently from male coworkers. The allegations that other female partners experienced similarly disrespectful conduct also supported an inference that Rawal’s behavior toward Owens was based on gender. The court separately stated that allegations concerning lost opportunities and diverted credit involving Russell and Garvey plausibly supported gender discrimination but did not, by themselves, describe unwelcome verbal or physical behavior constituting sexual harassment.

The court also found that Owens plausibly alleged that she was PwC’s employee for purposes of the New York City Human Rights Law, despite holding the title of principal. The allegations that PwC supervised her, assigned and removed her from projects, controlled participation and revenue credit, and could force her withdrawal were sufficient at this stage.

Motion to Stay the Separate Arbitration

The court denied Owens’s motion to stay the AAA arbitration. It held that the federal forced-arbitration law refers to the entire court case in which a sexual-harassment-related claim is brought, not to every related claim that might be asserted in a separate proceeding. PwC’s arbitration claims had not been brought in this lawsuit, so they were not part of this case and were not covered by the federal law’s protection.

The court also held that Owens had not identified another legal basis for stopping the arbitration. Even assuming PwC’s arbitration claims might be compulsory counterclaims under Federal Rule of Civil Procedure 13, the court found no basis to decide preemptively whether those claims were barred or waived. Those issues could be raised in the later forum if appropriate. The court declined to decide definitively whether an arbitration proceeding itself could be a “case” under the federal forced-arbitration law.

Disposition

The court denied PwC’s motion to compel arbitration of Owens’s claims in this action. It denied Owens’s motion to stay the pending arbitration. It also denied Owens’s application for a temporary stay because the opinion and order made that application moot. The Clerk of Court was directed to terminate the motions at Docket Nos. 43, 54, and 81.