Gabay v. Roadway Movers, Inc.

Background

Shalom Gabay brought this action against his former employer, Roadway Movers, Inc., and Roadway’s president, Ross Sapir. He alleged violations of the Americans with Disabilities Act, the Family and Medical Leave Act, and various state laws.

The court had previously denied Defendants’ motion to compel arbitration because it concluded that Gabay fell within a limited exception to the Federal Arbitration Act. Defendants appealed that interlocutory ruling and then asked the district court to stay discovery while the appeal proceeded. Gabay opposed the stay.

Legal standard

The court applied four factors for deciding whether to stay proceedings during an interlocutory appeal: (1) the applicant’s likelihood of success; (2) whether the applicant would suffer irreparable harm without a stay; (3) whether the stay would substantially harm the opposing party; and (4) the public interest. The court described these factors as a sliding scale, with the first two being the most important.

Court’s analysis

On the likelihood of success, Defendants argued that the Supreme Court’s decision in Southwest Airlines Co. v. Saxon left open the precise question presented in this case. The court disagreed that Defendants had made a strong showing of likely success. It stated that its earlier decision denying arbitration was correct and that Saxon rejected the narrow interpretation of the Federal Arbitration Act’s transportation-worker exception advanced by Defendants. But because the Second Circuit had not issued binding authority on the precise question, the appeal was at least non-frivolous and potentially substantial, though not promising.

The court found that the irreparable-harm factor strongly favored Defendants. It relied on district court authority concluding that denying a party its right to proceed promptly in arbitration can cause harm that cannot be adequately remedied by an appeal after the case ends. The court also noted that arbitration and federal-court discovery may involve different scopes and procedures.

The court concluded that the potential harm to Gabay from delay could be addressed through interest as the case proceeded. It also found that the public interest favored a stay because continuing proceedings could waste judicial resources if the appeal resulted in arbitration and resolved the federal case.

Disposition

Judge Jennifer L. Rochon granted Defendants’ motion to stay discovery pending appeal. The action was stayed pending resolution of Defendants’ interlocutory appeal. The Clerk of Court was directed to terminate the motion listed at ECF No. 42.