Chung v. 335 Madison Avenue LLC

Background

Yuk Lung Chung alleged that he worked as a mechanic/technician for 335 Madison Avenue LLC for approximately 10 years. He claimed that he regularly worked before his scheduled shifts without pay, resulting in unpaid overtime. He also alleged that the defendant failed to provide required wage notices and statements. Chung further alleged that he complained about the unpaid pre-shift work, that the defendant retaliated against him, and that it eventually terminated him.

Chung brought claims under the Fair Labor Standards Act and various provisions of the New York Labor Law. His claims concerned unpaid overtime, missing wage notices and statements, and alleged retaliation and discrimination.

Motion to Compel Arbitration

The defendant moved to dismiss the complaint and compel arbitration under the Federal Arbitration Act, a federal law governing arbitration agreements. It relied on a collective bargaining agreement, or CBA, between Chung’s union, Local 94-94A-94B International Union of Operating Engineers AFL-CIO, and the Realty Advisory Board on Labor Relations, Inc., a group of which the defendant was a member.

The CBA required arbitration as the “final, binding, sole and exclusive remedy” for claims alleging violations of the Fair Labor Standards Act, New York Labor Law, and other wage-payment laws, as well as claims alleging illegal discrimination. Chung did not dispute that the CBA’s language required arbitration if the CBA was valid. Instead, he argued that the evidence did not establish that the CBA was valid and effective because the copy submitted to the court was unsigned and had other alleged evidentiary deficiencies.

The court rejected that argument. It explained that a collective bargaining agreement does not need to be signed to be effective and that courts consider the surrounding circumstances and the parties’ conduct. Chung acknowledged that he was a member of Local 94. The union president submitted a declaration stating that the CBA was a true and correct copy and had been negotiated and ratified by the union and the employer group. The defendant also showed its intention to be bound by repeatedly relying on the CBA. The court found that Chung had offered no contrary evidence creating a factual dispute.

Scope of the Arbitration Provision

The court held that Chung’s claims fell within the CBA’s arbitration provision. The provision expressly covered claims under the Fair Labor Standards Act and New York Labor Law, and the court found that its language clearly and unmistakably included Chung’s statutory claims. The court therefore concluded that a valid, enforceable arbitration agreement existed and covered all claims in the complaint.

Disposition

The court stated that when all claims are subject to arbitration, staying the case generally better serves the federal policy favoring arbitration than dismissing it. The defendant had requested dismissal, but the court found no compelling reason to depart from the practice of staying cases pending arbitration. The court granted the motion to compel arbitration, stayed the action pending arbitration, and denied the motion to dismiss. The defendant’s arguments for dismissal under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) were deemed abandoned because the defendant did not develop those arguments.