Puig v. City of New York

Background

Juan Puig alleged that he worked substantially more than 50 hours per week as a custodian at New York City public schools and was not paid the required overtime rate between 2020 and 2023. He asserted collective and class claims under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). In his amended complaint, he also alleged that Local 94-94A-94B International Union of Operating Engineers AFL-CIO breached the collective-bargaining agreement (CBA) by preventing him from using its grievance process.

The CBA between the defendants and Local 94 covered Puig. It stated that claims alleging violations of the FLSA, NYLL, and other wage laws were subject to the CBA’s grievance and arbitration procedure as the final, binding, sole, and exclusive remedy. The CBA required a grievance to be submitted in writing to a Grievance Committee and provided procedures for referring disputes to arbitration.

The Motion

The defendants moved under Rules 12(b)(1) and 12(b)(6) and the Federal Arbitration Act to dismiss the action and compel arbitration, or alternatively to stay the action pending arbitration. Puig argued that the arbitration provisions were unenforceable because his union representative had declined to pursue his overtime claim and, in his view, the CBA did not allow him to begin arbitration individually in those circumstances. He also argued that, if arbitration were ordered, the case should be stayed rather than dismissed.

Court’s Analysis

The court held that the CBA contained a valid arbitration agreement and that its language clearly and unmistakably covered Puig’s FLSA and NYLL claims. The court found that Puig was bound by the agreement because he admitted that he was covered by, or an intended third-party beneficiary of, the CBA.

The court rejected Puig’s argument that the CBA made arbitration unavailable to him. The court explained that the CBA did not prohibit Puig from starting arbitration individually. Puig had raised his wage dispute by telephone with his union representative but had not submitted a written grievance as the CBA required. The court therefore found that he had not exhausted the CBA’s grievance procedures and had not shown that the CBA prevented him from arbitrating his claims individually.

The court also stated that Puig could not avoid the arbitration provisions through his claim that Local 94 breached its duty of fair representation. If Puig followed the CBA’s procedures and was unable to pursue his statutory claims because of action or inaction by Local 94, he could seek further relief from the court.

Disposition

The court granted the defendants’ motion to compel arbitration and stayed the case. It declined to recommend dismissal at that time. Puig was directed to submit his FLSA and NYLL claims to the grievance and arbitration procedures in Articles V and VI of the CBA. The parties were required to file a joint status letter 60 days after the order and every 60 days afterward, and to promptly report any resolution or other event affecting the stay.