ORDER GRANTING MOTION TO COMPEL ARBITRATION
PAMELA K. CHEN, United States District Judge:
Between February 2015 and April 2016, Plaintiff Alan Alfonso was employed as a driver for Defendant Maggies Paratransit Corporation, a business engaged in the transportation of disabled individuals. Plaintiff brings this putative collective and class action under the Fair Labor Standards Act ("FLSA") and the New York Labor Law ("NYLL") against Defendant for failure to pay for all hours worked and overtime to Plaintiff and all similarly situated employees.
Defendant contends that Plaintiff's claims are subject to mandatory arbitration pursuant to an underlying collective bargaining agreement between Defendant and Plaintiff's union representative, and moves to compel arbitration on that basis. (Dkts. 18, 19.) In opposing Defendant's motion, Plaintiff argues that the arbitration provision in question constitutes an impermissible waiver of his federally protected rights, and is thus unenforceable. (Dkt. 22 ("Opp'n").) Based on the parties' submissions and for the reasons set forth below, the Court GRANTS Defendant's motion to compel arbitration and STAYS this action pending arbitration.
I. LEGAL STANDARD
The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., which the parties agree governs the instant motion, "creates a body of federal substantive law of arbitrability applicable to arbitration agreements ... affecting interstate commerce." Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115, 121 (2d Cir.2010). The FAA was enacted to reverse "centuries of judicial hostility to arbitration agreements" and "to place arbitration agreements upon the same footing as other contracts." Scherk v. Alberto-Culver Co., 417 U.S. 506, 511, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974) (internal quotation marks and citations omitted). Reflecting this policy, Section 2 of the FAA provides that an arbitration agreement "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. And Section 4 requires courts to compel arbitration "in accordance with the terms of the agreement" upon the motion of either party to the agreement, provided that there is no issue regarding its formation or validity.
"In the context of motions to compel arbitration brought under the [FAA] ... the court applies a standard similar to that applicable for a motion for summary judgment," Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir.2003), and courts may therefore consider materials outside the complaint, including the arbitration agreement itself. "[W]here the undisputed facts in the record require the matter of arbitrability to be decided against one side or the other as a matter of law, [a court] may rule on the basis of that legal issue and avoid the need for further court proceedings." Wachovia Bank, Nat'l Ass'n v. VCG Special Opportunities Master Fund, Ltd., 661 F.3d 164, 172 (2d Cir.2011) (internal quotation marks omitted). The party "seeking to avoid arbitration generally bears the burden of showing the agreement to be inapplicable or invalid." Harrington v. Atl. Sounding Co., Inc., 602 F.3d 113, 124 (2d Cir.2010) (citing Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91-92, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000)).
II. THE COLLECTIVE BARGAINING AGREEMENT
Division 1181-1061, Amalgamated Transit Union, AFL-CIO (the "Union"), represents all of Defendant's drivers, including Plaintiff, for purposes of collectively bargaining their terms and conditions of employment. (See Dkt. 20 ("Aquilia Aff.") ¶ 4.) Plaintiff does not dispute that during his employment, which terminated in April 2016, he was bound by a collective bargaining agreement (the "CBA") entered into between Defendant and the Union. (Id. ¶¶ 5, 8.)
Article 13 of the CBA contains the grievance and arbitration procedure now being invoked by Defendant. It provides, in relevant part:
(Dkt. 25-1 ("CBA") Art. 13.) (emphasis added). The grievance procedure is a three-step process. First, "[t]he matter shall [ ] be taken up between the Employer and [Union] Shop Steward within thirty (30) days of the time the employee or Union knew or reasonably should have known of the facts giving rise to the dispute." (Id. Art. 13.1.) Second, if the dispute is not resolved, then within 30 days thereafter, "a hearing shall be held between the Employer and the Union representative." (Id. Art. 13.2.) Finally, if the dispute is still not resolved after such hearing, then "within thirty (30) days thereafter the grievance shall be reduced to writing by the aggrieved party and the matter may be submitted to arbitration (i.e. within sixty (60) days of the meeting between the Employer and the Shop Steward)." (Id. Art. 13.3.)
Article 13.5 of the CBA provides that the decision of the arbitrator "shall be final and binding upon both parties." (Id. Art. 13.5.) Article 13.6 provides that "[a]ny grievance not submitted to arbitration within the time periods specified above
III. ENFORCEABILITY OF THE CBA'S ARBITRATION PROVISION
A. Substantive Waiver of Statutory Rights
In 14 Penn Plaza LLC v. Pyett, 556 U.S. 247, 129 S.Ct. 1456, 173 L.Ed.2d 398 (2009), the United States Supreme Court made clear that a mandatory arbitration clause in a collective bargaining agreement is enforceable as to union members where it "clearly and unmistakably requires union members to arbitrate [the federal statutory claim]," and Congress has not prohibited those claims from being arbitrated. Id. at 257, 274, 129 S.Ct. 1456. Courts in this Circuit have since applied Penn Plaza's holding to claims arising under the FLSA and NYLL. See, e.g., Lawrence v. Sol G. Atlas Realty Co., Inc., No. 14-cv-3616, 2015 WL 5076957, at *3 (E.D.N.Y. Aug. 27, 2015); Gjoni v. Orsid Realty Corp., No. 14-cv-8982, 2015 WL 4557037, at *3 (S.D.N.Y. July 22, 2015). Plaintiff does not appear to dispute that the mandatory nature of the CBA's arbitration provision is "clear and unmistakable" as to his FLSA and NYLL claims.
Plaintiff, however, argues that the CBA's arbitration provisions are unenforceable because they effect a substantive waiver of his federal statutory rights. (Opp'n at ECF 5-6; 11-20.)
i. Union's Discretion to Decline to Pursue Arbitration
The United States Supreme Court in Penn Plaza expressly left open the question of whether a collective bargaining agreement which allows a union to "block arbitration" of union members' federal statutory claims "operates as a substantive waiver of their ... rights." 556 U.S. at 273-74, 129 S.Ct. 1456. There, the union-member-respondents contended, as one of many arguments, that the agreement allowed their union to preclude them from arbitration entirely by declining to pursue the union members' age discrimination claims. Id. The employer-petitioners, however, pointed to record evidence that the union had permitted respondents to continue with the arbitration even though the union itself had withdrawn. Id. at 274, 129 S.Ct. 1456. The Supreme Court declined to address whether, under these circumstances, respondents were prevented from "effectively vindicating" their federal statutory rights, noting that such a determination "require[d] resolution of contested factual allegations" and "was not fully briefed to this or any court and is not fairly encompassed within the question presented." Id. The court further noted that "[r]esolution of this question at this juncture would be particularly inappropriate in light of our hesitation to invalidate arbitration agreements on the basis of speculation." Id. (citing Green Tree, 531 U.S. at 91, 121 S.Ct. 513).
Though Plaintiff attempts to fit the instant case into this so-called "exception" identified by Penn Plaza, the Court finds that, as in Penn Plaza, the Court has no occasion here to pass on the issue of whether the CBA effects a substantive waiver of Plaintiff's federal statutory rights.
Based on Penn Plaza, the Court cannot find that the mere existence of a provision in a collective bargaining agreement that confers unfettered discretion on the union in deciding which claims to arbitrate
Thus, courts in this Circuit addressing the "Penn Plaza exception" — including those cited by Plaintiff — have found collective bargaining agreements unenforceable only where the submission of a statutory claim to arbitration is exclusively within the province of the union and the union has, in fact, declined to pursue the matter.
Rather, courts confronting situations in which a plaintiff has not exhausted the grievance and arbitration procedure set forth in a collective bargaining agreement have compelled arbitration, without prejudice to the plaintiff's ability to seek further relief in court should he later find himself precluded from arbitration. See, e.g., Greene v. Am. Bldg. Maint., No. 12-cv-4899, 2013 WL 4647520, at *3 (E.D.N.Y. Aug. 28, 2013) (Irizarry, J.) (compelling arbitration where plaintiff had not alleged he "has made any attempt to [arbitrate]... or that he was prevented or impeded from arbitrating his claim," and dismissing claims without prejudice to refile should his arbitration efforts be blocked); Veliz v. Collins Bldg. Servs., Inc., No. 10-cv-6615, 2011 WL 4444498, at *4 (S.D.N.Y. Sept. 26, 2011) (Holwell, J.) (dismissing plaintiff's claims and noting that "if the CBA operates to preclude [plaintiff's] attempt, if any, to resolve his statutory claims ... the CBA will be unenforceable and [plaintiff] will have the right to refile his claim in federal court"); Borrero v. Ruppert Hous. Co., No. 08-cv-5869, 2009 WL 1748060, at *2 (S.D.N.Y. June 19, 2009) (Baer, J.) ("Should [plaintiff's] attempts to arbitrate his claims be thwarted by the Union, the CBA will have operated as a `substantive waiver' of his statutorily created rights and he will have the right to re-file his claims in federal court.").
Here too, the Court finds that the appropriate course of action is to grant Defendant's motion to compel arbitration, while permitting Plaintiff to seek further relief from this Court should he later find himself precluded from arbitrating his claims.
ii. Shortening of FLSA Statute of Limitations
For similar reasons, the Court must also reject Plaintiff's second argument with respect to Articles 13.1 and 13.6 effectively shortening the FLSA statute of limitations. As with Plaintiff's challenge to Article 13.3 above, this challenge is premature. In Ragone, the Second Circuit declined to reach the issue of whether an arbitration agreement that appeared to shorten the
Here, Article 13.6 expressly permits Defendant and the Union to waive the normal 30-day requirement for filing a grievance by executing a signed writing. Plaintiff has not introduced any evidence that either Defendant or the Union has declined to sign such a writing waiving enforcement of the 30-day requirement. Because the Court finds that Plaintiff has not demonstrated that he has been precluded from submitting a grievance on the basis of the Article 13.6 time-bar, there is no basis at this time to find that the statute of limitations for his FLSA claims has been improperly shortened. Again, Plaintiff may seek further relief from this Court should he be precluded from arbitrating his FLSA claims based on Article 13.6's time-bar in the future.
Plaintiff argues in the alternative that the arbitration agreement is unconscionable. This is normally a question of contractual validity that must be analyzed under New York law. Cap Gemini Ernst & Young, U.S., L.L.C. v. Nackel, 346 F.3d 360, 365 (2d Cir.2003). On this point, however, Plaintiff simply repeats his arguments as to substantive waiver, including that the CBA entrusts the Union with sole discretion to submit a claim to arbitration and shortens the statute of limitations on Plaintiff's FLSA claim. Because the Court has found that the CBA effects no substantive waiver of Plaintiff's rights at this juncture, it rejects these same arguments as grounds for unconscionability.
The Court also rejects Plaintiff's argument that the CBA is unconscionable because he had to accept it in order to remain employed by Defendant. See Ragone v. Atlantic Video at Manhattan, 2008 WL 4058480, at *7 (S.D.N.Y. Aug 29, 2008) ("The fact that the agreement was offered on a take it or leave it basis, alone, is insufficient to support a finding that the plaintiff lacked a `meaningful choice' in signing the agreement."); see also Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 33, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991) ("[m]ere inequality in bargaining power" is not a basis for declining to enforce arbitration agreements contained in employment contracts). Finally, the Court rejects Plaintiff's remaining argument that the CBA is unconscionable because it requires the parties to split the cost of arbitration and arbitration is prohibitively expensive for Plaintiff. Plaintiff misreads the plain language of the arbitration agreement, which states — unambiguously — that the cost of arbitration shall be shared by "[t]he Employer and the Union," and not the employer and employee.
IV. STAYING THE INSTANT PROCEEDINGS
Having concluded that Plaintiff's claims are subject to mandatory arbitration, the Court must decide whether to dismiss or stay this action pending arbitration. The Second Circuit recently held that the FAA "requires a stay of proceedings when all claims are referred to arbitration and a stay [is] requested." Katz v. Cellco P'ship, 794 F.3d 341, 343 (2d Cir.2015). Although neither party has requested a stay here,
For the foregoing reasons, Defendant's motion to compel arbitration is GRANTED and this case is STAYED. If Plaintiff wishes to proceed with his claims, he is directed to submit to the grievance and arbitration procedures contemplated by Article 13 of the CBA. If Plaintiff finds that he is precluded from submitting his claims to arbitration — either because the Union declines to arbitrate his claims and there is no avenue for him to unilaterally pursue arbitration, or because his claims are found to be time-barred under the CBA — Plaintiff may seek further redress from this Court. The parties are directed to inform the Court of any resolution of the arbitration proceedings or any other event that would affect the stay of this matter.
The Court also rejects Plaintiff's argument that an arbitrator would somehow be without authority to provide the relief sought. Plaintiff argues that if the arbitrator were to find that the CBA's "Manifest Pay" provision in question violated the FLSA, the arbitrator would be without power to revise that aspect of the CBA, because the CBA prohibits the arbitrator from amending the CBA. (Opp'n at ECF 16.) As Defendant points out in its brief, however, in such a situation, the bargaining parties would simply negotiate new language in light of the arbitrator's ruling.
Finally, the Court rejects Plaintiff's outdated suggestion that an arbitrator would somehow be incompetent to interpret the federal or state law necessary to resolve Plaintiff's claims. See Mitsubishi Motors, 473 U.S. at 626-627, 105 S.Ct. 3346 ("[W]e are well past the time when judicial suspicion of the desirability of arbitration and of the competence of arbitral tribunals inhibited the development of arbitration as an alternative means of dispute resolution").