Alvardo v. Sweetgreen, Inc.

Background

Ten current or former Sweetgreen employees sued Sweetgreen, Inc., Donald Izquierdo, and Edwin Ventura in New York state court. They alleged race and gender discrimination and hostile work environments under the New York City Human Rights Law. The amended complaint also asserted that Sweetgreen failed to pay Oscar Rivera for work performed, in violation of the New York Labor Law.

The defendants removed the case to federal court, arguing that the court had federal-question jurisdiction and diversity jurisdiction. They then moved to compel arbitration under the Federal Arbitration Act and to dismiss the amended complaint under Rule 12(b)(6), which concerns whether a complaint adequately states a legal claim. The plaintiffs moved to remand, meaning to return the case to state court. McClure and Stevens later agreed to arbitrate and dismiss their claims, but the court considered their status when evaluating whether removal was proper.

Federal-question jurisdiction

The court held that the complaint did not present a federal question on its face because it asserted state-law claims. The defendants argued that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act supplied federal jurisdiction because the plaintiffs relied on that statute to oppose arbitration. The court rejected that argument. It explained that the statute was being raised in response to a defense, rather than as a claim in the complaint, and that a federal defense generally does not create federal-question jurisdiction.

Diversity jurisdiction and alleged misjoinder

The court also concluded that diversity jurisdiction was absent. Diversity jurisdiction generally requires that no plaintiff be a citizen of the same state as any defendant. The amended complaint alleged that all plaintiffs resided in New York and that Izquierdo also resided in New York, so the parties were not completely diverse on the face of the pleading.

The defendants asked the court to disregard the claims against Izquierdo under the fraudulent-misjoinder doctrine. That doctrine can be used, in some courts, when claims against different parties were improperly joined to prevent removal. The court held that it had no authority to retain jurisdiction on that basis. It explained that deciding whether claims were properly joined was primarily a matter for the New York state court where the case began, and that federal law did not authorize the court to divide the state-court lawsuit before establishing federal jurisdiction.

The court further held that, even if the fraudulent-misjoinder doctrine were available, the defendants had not shown that the plaintiffs’ claims were improperly joined under New York’s permissive-joinder rules. The allegations described a common pattern of alleged discrimination and raised overlapping questions about Sweetgreen’s knowledge and response. The court noted that the appropriateness of separating the claims could potentially be considered later as the case developed, but it could not be resolved at the removal stage based only on the pleadings.

Disposition

The court granted the plaintiffs’ motion to remand the lawsuit to the Supreme Court of the State of New York, Bronx County. It denied the defendants’ motion to compel arbitration and dismiss the amended complaint as moot. The clerk was directed to close the federal case and transfer it back to the state court. The court did not decide whether the discrimination, harassment, or wage allegations were legally valid.

Judge

The opinion was written by Lewis J. Liman, United States District Judge.