Sexual Harassment Claims Stayed Pending Arbitration

In Lee v. Engel Burman Grande Care at Jericho, LLC, et al, 20-CV-3093, 2021 WL 3725986 (E.D.N.Y. Aug. 23, 2021), the court granted defendants’ motion to compel arbitration of plaintiff’s sexual harassment claims, and stayed the action pending the outcome of arbitration.

Specifically, the court rejected plaintiff’s arguments seeking to avoid arbitration on the grounds that (1) she did not assent to the agreement that defendants invoke; (2) defendants are not parties to the agreement; (3) the agreement is unconscionable; and (4) her state-law claims are not subject to arbitration.

As to the first point, the court explained, inter alia:

Plaintiff suggests that she did not assent to the terms of the agreement. She states that she was rushed to sign many documents at the time of her hire and that nobody explained that she was waiving important rights or otherwise agreeing to arbitrate any potential employment discrimination issue.

Plaintiff’s arguments are inadequate to vitiate the consent evidenced by her signature. Under New York law, a party who signs a written contract is conclusively presumed to know its contents and to assent to them, and [s]he is therefore bound by its terms and conditions. Similarly, a party’s failure to read or understand a contract that it signs does not relieve it of its obligation to be bound by the contract. Here, the Dispute Resolution Agreement states that an employee who does not opt out of its arbitration provisions agrees to arbitrate all claims arising from her employment. The last page of the agreement further specifies that an employee who fails to opt out waives the right to have the case submitted to a court of law and decided by a judge or jury. Plaintiff does not dispute that she signed the last page when she was hired by defendants.  Accordingly, plaintiff is bound by the Dispute Resolution Agreement, even if she felt rushed or did not receive an explanation of its meaning. [Citations omitted, cleaned up.]

The court also rejected plaintiff’s argument based on the fact that she was also given a signature page, citing the principle that, under New York law, “[a] signer’s duty to read and understand that which it signed is not diminished merely because [the signer] was provided with only a signature page” and that “a paper referred to in a written instrument and sufficiently described may be made a part of the instrument as if incorporated into the body of it.”

Here, the court held that plaintiff “undisputedly received the third and fourth pages of the agreement and signed the last page” which “pages placed plaintiff on notice that she was binding herself to an arbitration policy.”

It also rejected plaintiff’s argument based on the fact that there was no witness who observed her signing it, holding that “[e]ven if there was no witness—notwithstanding the signature on the ‘witness’ line—the formation of an enforceable agreement under New York law does not require the presence of a witness.”

The court further rejected plaintiff’s attempt to avoid arbitration of her state law claims on the basis of New York CPLR 7515, which (in sum) prohibits certain written contracts from containing mandatory arbitration clauses. This statute was inapplicable, held the court, since it was preempted by the Federal Arbitration Act (which governed because the parties’ agreement relates to a “general practice” involving or affecting commerce, namely, the “employment of persons”).

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