Whyte v. WeWork Companies, Inc.

Background

On June 11, 2020, the court granted WeWork Companies, Inc.’s motion to compel arbitration of Ayesha Whyte’s action and stayed the case while arbitration proceeded. The earlier order held that the Federal Arbitration Act, rather than New York law, governed arbitrability under the parties’ arbitration agreement. It also rejected Whyte’s argument that New York Civil Practice Law and Rules § 7515 made the arbitration agreement unenforceable for her employment discrimination claims.

Whyte petitioned under 28 U.S.C. § 1292(b) to certify that portion of the June 11 order for interlocutory appeal. An interlocutory appeal is an appeal before the district court has entered a final judgment.

Legal standard

The court explained that certification under § 1292(b) requires three things: a controlling legal question, substantial grounds for disagreement about that question, and a determination that an immediate appeal could materially advance the end of the litigation. Such appeals are a limited exception to the usual rule requiring parties to wait until final judgment. The party seeking certification bears the burden of showing that these requirements are met.

Court’s analysis

The court first held that an immediate appeal would not materially advance the litigation. Regardless of the appeal’s result, Whyte would have to fully present her case either in federal court or before the arbitral forum. The court reasoned that proceeding with arbitration was likely faster than waiting for an appeal.

The court also held that Whyte had not shown a controlling legal question warranting immediate review. Reversal of the June 11 order would not dismiss the action or significantly change how the dispute would be conducted because either court litigation or arbitration would address the same dispute using the same evidence.

The court recognized that the preemption issue—the question whether the Federal Arbitration Act displaced New York Civil Practice Law and Rules § 7515—could have precedential value in other cases. However, it found no conflicting authority and concluded that the issue was not sufficiently difficult to justify immediate appellate review. The court relied on the Supreme Court’s decisions concerning federal preemption of state rules that restrict arbitration and noted that § 7515 itself says it does not apply when inconsistent with federal law.

The court distinguished a separate case involving § 7515 because that case concerned federal subject-matter jurisdiction and arose after removal from state court. The court stated that no subject-matter jurisdiction issue was raised in Whyte’s case.

Disposition

Chief Judge McMahon denied Whyte’s petition to certify the June 11 order for interlocutory review. The court also directed the clerk to close the motion at Docket Number 23. The opinion did not alter the earlier order compelling arbitration and staying the action.