Castillo v. Altice USA, Inc.

Background

Chrismelle Castillo sued Altice USA, Inc., Jesus Reyes, and Christaly Cruz. She alleged that Reyes distributed intimate photographs of her and that Reyes and Cruz harassed her. Castillo also alleged that she complained to Altice supervisors and human resources in September 2021, after which Altice allegedly issued her a written warning, placed her on a corrective action plan, demoted her, reduced her compensation and commission structure, and issued verbal reprimands.

The complaint asserted seven causes of action. Counts 1 and 2 alleged sex discrimination and retaliation under Title VII of the Civil Rights Act of 1964 against Altice. Counts 3, 4, 6, and 7 alleged sex discrimination and retaliation under the New York State Human Rights Law and New York City Human Rights Law against all defendants. Count 5 alleged that Reyes and Cruz violated New York City Administrative Code § 10-180 by disseminating intimate images without Castillo’s consent.

Before Altice hired Castillo, she signed a mutual arbitration agreement dated March 29, 2018. The agreement covered disputes and claims against Altice and its current and former officers, directors, employees, and agents, including discrimination, harassment, retaliation, and claims under federal, state, or local law. Castillo acknowledged in her complaint that the agreement required her claims to be arbitrated.

Motion and the Federal Arbitration Law

Altice moved to compel arbitration of the six claims against it—Counts 1, 2, 3, 4, 6, and 7—and initially sought dismissal of the claims against Altice. In its reply, Altice withdrew its request for dismissal and instead asked the court to stay the case while the parties arbitrated. Castillo opposed arbitration.

Castillo relied on the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, which amended the Federal Arbitration Act. The newer law provides that, at the election of a person alleging sexual harassment or sexual assault, a predispute arbitration agreement is not enforceable for a case relating to that dispute. The law applies to disputes or claims that arise or accrue on or after March 3, 2022, the date of enactment.

Castillo did not dispute that her claims accrued before March 3, 2022. She argued, however, that the related “dispute” arose later—when Altice received a demand letter or draft complaint, or when she filed a charge with the Equal Employment Opportunity Commission. The court noted that the complaint did not allege, and Castillo had not provided admissible evidence showing, that she sent a post-March 2022 demand letter or draft complaint or filed the asserted charge on August 29, 2022. The complaint alleged only that she received a notice of right to sue from the agency dated May 10, 2023.

Court’s Analysis

The court explained that the Federal Arbitration Act generally makes written arbitration agreements enforceable and requires courts to direct parties to arbitration when their agreement covers the dispute. The court applied a standard similar to the summary-judgment standard and found that the relevant facts were undisputed for purposes of the motion.

The court interpreted “dispute” in the federal law to refer to the discriminatory or harassing conduct underlying the lawsuit, rather than the later filing of an administrative charge or court complaint. It reasoned that the law concerns “predispute” arbitration agreements—agreements made before a dispute arose—and that the dispute therefore arose when the alleged harassment or discrimination occurred.

The court found that Castillo’s alleged sexual harassment occurred in late 2021, that she complained to Altice in 2021, and that the alleged retaliation occurred through the 2021 corrective action plan and demotion. Because the alleged conduct occurred before March 3, 2022, the court held that the federal law did not apply retroactively and did not invalidate the otherwise binding arbitration agreement. The court also stated that even under Castillo’s proposed view that a dispute requires a disagreement or controversy with the employer, her complaints and the alleged subsequent retaliation created that dispute in 2021.

Disposition

The court GRANTED Altice’s motion to compel arbitration. It ordered that the case be stayed as to Altice only while the parties arbitrate. The order did not require arbitration of the claims against Reyes and Cruz, which the court stated were not subject to arbitration under the ruling.

The court directed the parties to provide an update by November 10, 2023, with proposed next steps for the case, including whether they sought a stay of the litigation against the non-arbitrating defendants while arbitration proceeded. It also adjourned the initial pretrial conference from October 25, 2023, to November 29, 2023, at 3:00 p.m., and directed the clerk to terminate the motions at ECF Nos. 16 and 31 and mail Cruz a copy of the opinion and order.