Mera v. SA Hospitality Group, LLC
- Paul Gardephe
- 1:23-cv-03492
- U.S. District Court · Southern District of New York
- 8
In Mera v. SA Hospitality Group, Judge Aaron granted in part and denied in part arbitration, sending wage claims to arbitration but leaving harassment claims in court.
Danilo Mera’s claims were divided between arbitration and court: his Fair Labor Standards Act and New York Labor Law wage claims were sent to arbitration and stayed, while his New York State and New York City human-rights claims remained in the action against the defendants.
What happened
In Mera v. SA Hospitality Group, LLC, Danilo Mera sued restaurant-related defendants over allegedly unpaid wages and a hostile work environment based on sexual-orientation discrimination. The defendants asked the court to require arbitration under an agreement Mera signed when he was hired.
The court ruled that the federal law protecting people who allege sexual harassment made the arbitration agreement unenforceable for Mera’s New York State and New York City discrimination claims. But the court found that his wage claims under federal and New York law were unrelated to the alleged harassment and had to be arbitrated. The motion to compel arbitration was therefore granted in part and denied in part, and the wage claims were stayed pending arbitration.
Judge Stewart D. Aaron issued the order. The defendants were required to answer or seek dismissal of the discrimination claims, while Mera was required to report whether arbitration had begun and, if so, its status.
The detailed version
- Mera v. SA Hospitality Group, LLC · No. 1:23-cv-03492
- Paul Gardephe
- June 3, 2023
Background
Danilo Mera brought claims against SA Hospitality Group, LLC; Cafe Focaccia, Inc.; Eighty Third and First LLC; Felice Gold Street LLC; Felice Chambers LLC; Felice 240, LLC; Felice Hudson, LLC; Felice Roslyn LLC; Felice Montague, LLC; Dimitri Pauli; and Jacopo Giustiniani. He asserted claims under 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.
Mera alleged that he was not paid all wages owed to him. He also alleged a hostile work environment based on sexual-orientation discrimination, including alleged homophobic slurs by coworkers and unwanted touching and comments by a manager. When he was hired, Mera signed an arbitration agreement requiring disputes related to his employment with Cafe Focaccia, SA Hospitality Group, or affiliated entities or individuals to be resolved individually through final and binding arbitration. The agreement stated that it was governed by the Federal Arbitration Act.
Defendants moved to compel arbitration or, alternatively, to stay the action. Mera did not dispute that the agreement broadly covered all of his claims absent the federal law known as the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.
The court’s analysis
The court concluded that Mera’s allegations raised a dispute within the scope of that Act. The Act makes a predispute arbitration agreement unenforceable, at the election of a person alleging conduct constituting sexual harassment, as to a case that relates to the alleged sexual-harassment dispute.
The court interpreted the Act to make the arbitration agreement unenforceable only for claims that relate to the sexual-harassment dispute, rather than automatically making it unenforceable for every unrelated claim in the same case. It reasoned that a broader interpretation would allow a plaintiff to avoid arbitration of wholly unrelated claims affecting a broad group of people.
The court found that Mera’s wage claims under the Fair Labor Standards Act and New York Labor Law concerned alleged policies and practices affecting nonexempt employees generally and did not relate to the alleged sexual harassment. Those claims therefore remained subject to the arbitration agreement. The New York State and New York City discrimination claims, which were based on the alleged harassment directed at Mera, were not subject to compelled arbitration under the Act.
The court did not decide whether Mera adequately stated the discrimination claims, because defendants had not moved to challenge their legal sufficiency. It also did not decide whether supplemental jurisdiction existed over those claims.
Disposition
The court granted in part and denied in part defendants’ motion to compel arbitration. It granted the motion as to Counts I and II—the Fair Labor Standards Act and New York Labor Law claims—and denied it as to Counts III and IV—the New York State Human Rights Law and New York City Human Rights Law claims. The action was stayed as to Counts I and II pending arbitration. Defendants were ordered to answer or move to dismiss Counts III and IV by June 23, 2023, and Mera was ordered to file a letter by December 31, 2023, reporting whether arbitration proceedings had begun and, if so, their status. Judge Stewart D. Aaron entered the order.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.