Walters v. Starbucks Corporation
- Denise Cote
- 1:22-cv-01907
- U.S. District Court · Southern District of New York
- 11
In Walters v. Starbucks, Judge Cote granted defendants’ motion to compel arbitration and stayed the action.
Abraneika Walters and the defendants, Starbucks Corp., Tafsir Mbodje, and Nick Tobias. Walters’s court action is stayed, and the dispute proceeds through arbitration under the agreement, with the arbitrator deciding whether the claims are covered.
What happened
Abraneika Walters sued Starbucks Corp., Tafsir Mbodje, and Nick Tobias over alleged sexual harassment, discrimination, retaliation, and constructive termination under New York State and New York City human-rights laws. She alleged that these events occurred while she worked as a Starbucks store manager and that she left her job in December 2021.
Before starting work, Walters signed a Starbucks agreement requiring individual arbitration of employment-related claims. The court held that the Federal Arbitration Act required enforcement of that agreement. It also ruled that a 2021 federal law allowing people to avoid arbitration of sexual-harassment disputes did not apply because Walters’s claims arose by December 2021, before that law took effect.
The court granted the defendants’ motion to compel arbitration and stayed the case while arbitration proceeds. The agreement assigned the question of whether Walters’s claims fall within its scope to the arbitrator. Judge Denise Cote did not decide the underlying harassment, discrimination, or retaliation claims.
The detailed version
- Walters v. Starbucks Corporation · No. 1:22-cv-01907
- Denise Cote
- Aug. 25, 2022
Background
Abraneika Walters sued Starbucks Corp., Tafsir Mbodje, and Nick Tobias. She alleged discrimination, a hostile work environment, retaliation, and constructive termination under the New York State Human Rights Law and the New York City Human Rights Law. The alleged conduct occurred while Walters was working as a store manager. She alleged that Mbodje made frequent unwelcome sexual advances, threatened her employment, and warned her not to complain; that Starbucks personnel did not adequately respond to her complaints; and that Tobias and Mbodje caused or supported false accusations and corrective action against her. Walters left her job in December 2021.
Before beginning her employment, Walters signed Starbucks’s Mutual Arbitration Agreement. The agreement required binding individual arbitration of covered claims, including claims concerning employment, harassment, discrimination, retaliation, and termination. The defendants moved to compel arbitration and dismiss the case.
Enforceability of the arbitration agreement
The court held that the Federal Arbitration Act required enforcement of the agreement. It found that the agreement was a written contract involving commerce and that Walters had not shown a generally applicable contract defense that would invalidate it.
Walters argued that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 made the agreement unenforceable for her claims. That law allows a person alleging conduct constituting sexual harassment or sexual assault to invalidate an applicable arbitration provision, but applies only to a dispute or claim that arose or accrued on or after March 3, 2022. The court held that Walters’s claims had accrued no later than December 2021, when she left her job, so the law did not apply.
The court also rejected reliance on a New York law restricting mandatory arbitration of unlawful-discrimination claims. It held that the New York provision did not apply where inconsistent with federal law, and that the Federal Arbitration Act required enforcement here.
Who decides whether the claims are covered
Walters argued that, even if the agreement was enforceable, it did not cover her claims. The agreement stated that the arbitrator—not a court or agency—had exclusive authority to decide disputes about the agreement’s formation, interpretation, applicability, enforceability, or implementation. The court found that this language clearly delegated the question of arbitrability, meaning whether the claims fall within the agreement, to the arbitrator.
Disposition
The court granted the defendants’ May 2, 2022 motion to compel arbitration and stayed the action pending the arbitration proceedings. The opinion does not separately state a disposition of the defendants’ request to dismiss the case. The court did not decide the merits of Walters’s harassment, discrimination, retaliation, or constructive-termination claims.
Read the full 11-page opinion on CourtListener, the free public archive maintained by the Free Law Project.