King v. Stage 29 Productions LLC

Background

Shawnelle King and Jahmia Phillips brought employment claims against Stage 29 Productions, LLC, also known as Inside-Out-Media, LLC. The complaint alleged discrimination based on race, color, and gender; a hostile work environment; and retaliation under Title VII of the Civil Rights Act of 1964, the New York State Human Rights Law, and the New York City Human Rights Law. The plaintiffs also alleged that Stage 29 violated New York Labor Law § 195.1 by failing to provide required wage information.

King and Phillips had each signed an employment agreement containing an arbitration clause. The clauses covered “any and all controversies, claims or disputes” arising out of or related to the agreements, including disputes about the enforcement, scope, or arbitrability of the arbitration provisions. The agreements incorporated the rules of JAMS, an arbitration provider. King’s agreement designated JAMS’s New York office, while Phillips’s agreement designated its Los Angeles office; Stage 29 waived the Los Angeles-location requirement and agreed to arbitrate in New York.

Stage 29 moved under Section 4 of the Federal Arbitration Act to compel arbitration and stay the federal case. The plaintiffs did not challenge the existence or validity of the arbitration agreements. Instead, they argued that Stage 29 had failed to participate in informal negotiations required by the agreements and asked the court to require mediation through the Southern District of New York’s mediation program before arbitration.

Court’s analysis

The court held that the plaintiffs had unequivocally agreed to arbitrate disputes arising from their employment. The court further held that the broad language of the agreements covered the plaintiffs’ federal and state claims.

The court also held that the agreements clearly assigned questions of arbitrability to the arbitrator. Incorporating the JAMS rules provided clear evidence of that delegation because those rules authorize the arbitrator to decide jurisdiction and arbitrability issues. The court therefore concluded that the arbitrator, rather than the court, must decide whether the plaintiffs’ claims are arbitrable.

The court treated the alleged informal-negotiation requirement as a possible condition that had to be satisfied before arbitration. It ruled that whether this procedural requirement had been met was a question for the arbitrator. The court also concluded that Congress had not made the plaintiffs’ federal employment-discrimination claims nonarbitrable.

Disposition

Judge Colleen McMahon granted Stage 29’s motion to compel arbitration and stay the immediate action. The proceedings were stayed under 9 U.S.C. § 3. The court denied the plaintiffs’ cross-motion to stay arbitration and compel mediation under Local Rule 83.9. The order did not decide the underlying discrimination, retaliation, hostile-work-environment, or wage-notice claims on their merits.