Hermes of Paris, Inc. v. Swain

Background

Hermès employed Matthew Swain at its Short Hills, New Jersey location from July 31, 2015, until it fired him on November 6, 2015. Swain had signed a Dispute Resolution Agreement requiring employment-related disputes to be resolved by one arbitrator in New York. The agreement covered contract, discrimination, retaliation, compensation, and other employment-related claims. It also required arbitration to begin within six months after the relevant facts became known, unless the applicable law provided a different filing period.

Swain sued Hermès in New Jersey state court on July 19, 2016. He alleged that Hermès breached his employment contract by firing him and failing to pay a bonus, and he asserted sexual-orientation discrimination, hostile-work-environment, and retaliation claims under New Jersey’s Law Against Discrimination. This Court ordered arbitration in 2016, and the Second Circuit affirmed that decision in 2017. New Jersey courts later also ruled that Swain had to pursue his claims in arbitration.

Swain filed an arbitration demand on April 26, 2019. The arbitrator initially denied Hermès’s request to dismiss the arbitration because the record did not show whether Hermès had waived its limitations defense. On reconsideration, the arbitrator dismissed all of Swain’s claims as untimely on December 10, 2019.

Decision on the Arbitration Award

The court granted Hermès’s petition to confirm the arbitration award and denied Swain’s cross petition to vacate it. Under the Federal Arbitration Act, courts generally give substantial deference to arbitration awards and may vacate them only on limited grounds, including when an arbitrator exceeded her authority.

Swain argued that the arbitrator lacked authority to decide whether his claims were filed too late. The court rejected that argument. It held that the agreement authorized the arbitrator to apply the substantive law and defenses that would have been available in court, which included the applicable filing deadlines.

Swain also argued that the deadlines should have been paused while the parties litigated whether the dispute belonged in court or arbitration. The court held that this was a challenge to the arbitrator’s legal conclusion, not a valid statutory basis for vacating the award. The court also found no extreme misconduct that would justify vacating the award under the separate doctrine concerning an arbitrator’s deliberate disregard of the law.

Injunction Against Further Litigation

The court separately granted Hermès’s petition to enjoin Swain from pursuing additional employment-related litigation. It relied on Swain’s repeated efforts to reinstate his New Jersey lawsuit after several courts had ordered arbitration and on the court’s conclusion that his continuing litigation sought to avoid the arbitrator’s decision.

The injunction barred Swain from refiling his motion to reinstate the New Jersey complaint and from filing additional lawsuits against Hermès concerning claims arising from his employment. The court directed the Clerk to enter an order confirming the award in all respects and to close the case.

Outcome

The court’s conclusion states that Hermès’s petition to confirm the arbitration award and enjoin further employment-related litigation was granted, and Swain’s cross petition to vacate the award was denied. The opinion identifies the judge as “McMahon, C.J.”; the provided text does not clearly supply the judge’s full first name.