Brkic v. Dumbo Moving & Storage, Inc.

Background

Milija Brkic sued Dumbo Moving & Storage, Inc. and Lior Rachmany, alleging violations of the Fair Labor Standards Act, the New York Labor Law, the New York State Human Rights Law, and the New York City Human Rights Law. The claims concerned alleged wage-and-hour violations and a hostile work environment based on Brkic’s Serbian ethnicity. Brkic also alleged that Dumbo Moving required workers to create companies so they could be paid as independent contractors.

On January 13, 2020, Brkic signed an arbitration agreement as part of an independent-contractor agreement. The arbitration agreement covered disputes arising from his relationship with Dumbo Moving, payments for his services, wage-and-hour laws, discrimination or harassment, and other statutory and common-law claims. It also waived class, collective, and representative proceedings. The agreement identified Dumbo Moving as the “Company” and Brkic as the “Sales Representative” and “Party.” Brkic identified VOZD Express, Inc. in a “Company Name” space on the signature page, but there was no signature block for VOZD or language stating that VOZD was signing the agreement.

Arguments and Analysis

The defendants moved to compel arbitration under the Federal Arbitration Act and to dismiss or stay the court proceedings. Brkic argued that he signed only on behalf of VOZD Express and did not intend to be personally bound. The court rejected that argument, finding that the agreement plainly identified Brkic, not VOZD, as a party and that he signed in the capacity identified in the agreement. The court stated that Brkic’s undisclosed subjective intention did not change the agreement’s objective terms.

Brkic also argued that the arbitration agreement was void because it had allegedly been forced on him to support worker misclassification and avoid wage-law obligations. The court held that the agreement contained a delegation provision—language assigning certain threshold arbitration questions to the arbitrator—that covered disputes about the agreement’s interpretation, enforceability, applicability, unconscionability, arbitrability, formation, and whether it was void or voidable. Because Brkic challenged the agreement as a whole rather than specifically challenging the delegation provision, the court ruled that the arbitrator, not the court, must decide those issues.

Rachmany was not a signatory to the arbitration agreement, but the court nevertheless ordered arbitration of the claims against him. It relied on the relationship between Rachmany and Dumbo Moving and on the overlap between the allegations against them. The complaint alleged that Rachmany controlled and managed Dumbo Moving, handled employment-related decisions, and acted together with Dumbo Moving in the alleged violations. The court therefore found that the claims against Rachmany were intertwined with the agreement Brkic signed and arose from his employment relationship with Dumbo Moving.

Disposition

The court granted the defendants’ motion to compel arbitration. It stayed the proceedings under 9 U.S.C. § 3 until 30 days after an arbitration award was entered and directed the prevailing party to move to confirm the award within 30 days of its entry. The court did not decide whether Brkic’s wage-and-hour or hostile-work-environment allegations were legally or factually valid. Judge Colleen McMahon directed the Clerk of Court to close the motion at Docket Number 14.