Fenton v. Criterion Worldwide

Background

Siobhan Fenton sued Criterion Worldwide and Lewis Morton, asserting claims under the Fair Labor Standards Act and New York Labor Law. She alleged that the defendants failed to pay the required minimum wages and failed to provide required notices of her pay rate and wage statements. Morton moved under the Federal Arbitration Act to compel arbitration and to dismiss or, alternatively, stay the action.

The opinion states that Criterion Worldwide had not been properly served and that the deadline for serving it had expired. Fenton conceded that Criterion was not an appropriate party, describing it as a non-entity and non-party and stating that her allegations were against Morton as the sole proprietor of Criterion. In the discussion, the court stated that Fenton’s claims against Criterion Worldwide “must be dismissed,” leaving claims against Morton. However, the opening ruling expressly says that Morton’s request to dismiss the action was denied, and the conclusion says only that the motion to compel arbitration was granted and the action was stayed. The opinion does not clearly explain how these statements fit together.

Arbitration agreements

Fenton signed a first arbitration agreement when she was hired. The agreement required arbitration of employment-related claims and waived participation in class, collective, or representative actions. It did not identify the employer or bear Morton’s signature. The court held that Fenton’s signature showed her assent under New York contract law. It also held that Morton could enforce the agreement even though he did not sign it because Fenton’s claims against Morton were intertwined with the agreement and identical to her claims against Criterion.

Fenton and Morton electronically signed a second arbitration agreement several weeks after her employment began. That agreement broadly covered employment-related claims, including wage claims and claims under federal and state laws, and assigned questions about the agreement’s formation, enforceability, and scope to the arbitrator. The court treated the electronic signature as legally effective under New York law. It rejected Fenton’s contention that she was not bound because she could not read the agreement on her phone and because she was told it concerned authorization for an identification badge. The court found that she had not shown fraud, duress, or coercion sufficient to avoid the agreement.

Scope and disposition

The court held that both arbitration agreements were broad enough to cover all of Fenton’s claims against Morton. It also concluded that the Fair Labor Standards Act claims could be arbitrated. Because the claims were subject to arbitration and Morton requested a stay, the court held that the Federal Arbitration Act required a stay rather than dismissal of the action while arbitration proceeded.

Order

Judge Edgardo Ramos granted Morton’s motion to compel arbitration, denied his request to dismiss the action, and stayed the action pending arbitration. The parties were ordered to tell the court within 48 hours of the arbitration’s outcome. The court also denied Morton’s request for attorney’s fees and costs because he provided no supporting briefing.