New York Supreme Court
Appellate Division, First Department
ANDOWAH NEWTON, Plaintiff-Respondent, v.
MOET HENNESSY LOUIS VUITTON INC., Defendant-Appellant.
MOTION BY CRUMILLER P.C. FOR LEAVE TO FILE AMICUS CURIAE BRIEF
Susan K. Crumiller Crumiller P.C. 16 Court St, Ste 2500 Brooklyn, NY 11241 (212) 390-8480 susan@crumiller.com Counsel for Amicus Curiae Crumiller P.C.
New York Supreme Court Index No. 154178/19
Dkt No. 2020-03198
LVMH
PLEASE TAKE NOTICE that upon the annexed affirmation of Susan K. Crumiller, dated February 12, 2021, the exhibit thereto, and all prior proceedings herein, Crumiller P.C. will move this Court at the courthouse located at 27 Madison Avenue, New York, New York 10010, on February 22, 2021, at 10:00 a.m. or as soon thereafter as counsel may be heard, for an order, pursuant to 22 NYCRR § 1250.4(f), granting it leave to serve and file a brief as amicus curiae in support of plaintiff-respondent in this action, and for such other relief as may be just.
Dated: February 12, 2021
Brooklyn, New York
TO: Stephen Bergstein
Bergstein & Ullrich, LLP 5 Paradies Lane New Paltz, NY 12561 (845) 469-1277
steve@tbulaw.com
Megan S. Goddard
Goddard Law PLLC 39 Broadway, Ste. 1540
Respectfully submitted,
Susan K. Crumiller Crumiller P.C. 16 Court St., Ste. 2500 Brooklyn, NY 11241 (212) 390-8480 susan@crumiller.com Counsel for Amicus Crumiller P.C.
New York, NY 10006 (646) 504-8363
megan@goddardlawnyc.com
Attorneys for Plaintiff-Respondent
Michael A. Fernandez
Winston & Strawn LLP
200 Park Avenue
New York, NY 10166 (212) 294-6700
MAFernandez@winston.com
Rex L. Sessions
Aviva Grumet-Morris
Winston & Strawn LLP 35 W. Wacker Drive Chicago, IL 60601-9703 (312) 558-5600
RSession@winston.com AgMorris@winston.com
Attorneys for Defendant-Appellant
Karla Gilbride Public Justice, P.C. 1620 L Street NW, Suite 630 Washington, D.C. 20036 (202) 797-8600 kgilbride@publicjustice.net
Counsel for Amicus Public Justice, P.C.
Rachel Geman
Lieff, Cabraser, Heimann & Bernstein LLP
250 Hudson Street, 8th Floor
New York, NY 10013 (212) 355-9500 rgeman@lchb.com
Miriam Clark
Ritz, Clark & Ben-Asher LLP
One Liberty Plaza 165 Broadway, 23rd Floor
New York, NY 10006
(212) 321-7075
mclark@rcbalaw.com
Counsel for Amicus National Employment Lawyers Association-New York
SUSAN K. CRUMILLER, an attorney licensed to practice law in the State of New York, and not a party to this action, affirms the truth of the following under penalties of perjury:
1. I am the founding attorney of Crumiller P.C. (“Crumiller”). This affirmation is respectfully submitted in support of Crumiller’s motion for an order, pursuant to 22 NYCRR § 1250.4(f), granting it leave to file a brief as amicus curiae in support of plaintiff-respondent.
2. A true and accurate copy of the proposed brief is attached as Exhibit A.
3. Crumiller is a New York City employment law firm that focuses on fighting gender and pregnancy discrimination in the workplace. The clients we represent are individuals fired during pregnancy or maternity leave and people sexually harassed and/or assaulted on the job. Our team has represented hundreds of clients in sexual harassment and discrimination cases, including dozens litigated, and dozens arbitrated. We have had several high-profile cases in which an arbitration clause played a dispositive role in the litigation. Overall, we have nearly one hundred years of combined experience representing victims of discrimination and harassment, and we counsel hundreds of workplace victims each year.
4. Through our experiences, we have come to recognize the overwhelming impact forced-arbitration clauses have on our clients. As such, we have coordinated advocacy efforts with several nationwide organizations and politicians
who are dedicated to the issue. We work with the American Association for Justice contributing our time and expertise to their advocacy efforts, advocate directly with politicians, and have been recognized as an authority on the issue in Bloomberg Law and elsewhere.
5. Our unique perspective from handling so many employment cases on behalf of victims of sexual harassment, discrimination, and abuse will help the Court evaluate the conscionability of forced arbitration in these actions. We have identified several key patterns in these cases which might not be immediately obvious to those who do not handle such cases regularly. We have unique insight into the problems caused by forced arbitration in sexual harassment cases, from both the clients’ and the litigators’ view.
6. The proposed brief presents three case studies to help illustrate the problems created by forced arbitration, and why an unconscionability determination may be warranted in this instance. Forced arbitration silences victims, fosters serial predation, deprives victims of their access to our courts and a jury of their peers, and expects employees to foresee the likelihood of being abused on the job. The information presented herein will help the Court in recognizing the importance of these factors.
7. The proposed brief does not duplicate any arguments made by plaintiffrespondent or amici Public Justice, P.C. and National Employment Lawyers Association-New York.
WHEREFORE, it is respectfully requested that Crumiller’s motion for leave to file the annexed brief as amicus curiae in support of petitioner-respondent be granted in its entirety.
Dated: February 12, 2021 Brooklyn, New York
Respectfully submitted,
Susan K. Crumiller
EXHIBIT A
New York Supreme Court
Appellate Division, First Department
ANDOWAH NEWTON, Plaintiff-Respondent, v.
MOET HENNESSY LOUIS VUITTON INC., Defendant-Appellant.
BRIEF OF AMICUS CRUMILLER P.C. IN SUPPORT OF PLAINTIFF-RESPONDENT
Susan K. Crumiller Crumiller P.C. 16 Court St, Ste 2500 Brooklyn, NY 11241 (212) 390-8480 susan@crumiller.com Counsel for Amicus Curiae Crumiller P.C.
LVMH
TABLE OF AUTHORITIES
CASES
159 MP Corp. v Redbridge Bedford, LLC, 33 NY3d 353 (2019) .........................5, 6
159 MP Corp. v. Redbridge Bedford, LLC, 160 AD3d 176 (1st Dept 2018), aff’d 33 NY3d 353 (2019) ......................................6
AT&T Mobility LLC v Concepcion, 563 US 333 (2011) ...........................................5
Doctor’s Associates, Inc. v. Casarotto, 517 US 681 (1996) .....................................5
Matter of Hennel, 29 NY3d 487 (2017) ..................................................................13
Niagara Wheatfield Cent. School Dist., 44 NY2d 68 (1978). ...................................6
STATUTES
9 USC § 1 et seq. ............................................................................................... 3, 4, 5
CPLR § 7515 ................................................................................................. 3, 4, 5, 7
OTHER AUTHORITIES
Estlund, Cynthia L., The Black Hole of Mandatory Arbitration (January 28, 2018). North Carolina Law Review, 96 North Carolina Law Review 679 (2018), NYU School of Law, Public Law Research Paper No. 18-07, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3111826 ......................9
Stone, Katherine V.W, Colvin, Alexander J.S., The Arbitration Epidemic: Mandatory Arbitration Deprives Workers and Consumers of their Rights (December 7, 2015). Economic Policy Institute, available at https://www.epi.org/publication/the-arbitration-epidemic/ 9
STATEMENT OF AMICUS CURIAE
Crumiller P.C. is a New York City employment law firm that focuses on fighting gender and pregnancy discrimination in the workplace. The clients we represent are individuals fired during pregnancy or maternity leave and people sexually harassed and/or assaulted on the job. Our team has represented hundreds of clients in sexual harassment and discrimination cases, including dozens litigated, and dozens arbitrated. We have had several high-profile cases in which an arbitration clause played a dispositive role in the litigation. Overall, we have nearly one hundred years of combined experience representing victims of discrimination and harassment, and we counsel hundreds of workplace victims each year.
Through our experiences, we have come to recognize the overwhelming impact forced-arbitration clauses have on our clients. As such, we have coordinated advocacy efforts with several nationwide organizations and politicians who are dedicated to the issue. We work with the American Association for Justice contributing our time and expertise to their advocacy efforts, advocate directly with politicians, and have been recognized as an authority on the issue in Bloomberg Law and elsewhere. 1
1 Mulvaney, Erin “New York’s #MeToo Arbitration Law Faces Appeals Court Battles,” Bloomberg Law, Jan. 11, 2021, available at https://news.bloomberglaw.com/daily-labor-
Our unique perspective from handling so many employment cases on behalf of victims of sexual harassment, discrimination, and abuse will help the Court evaluate the conscionability of forced arbitration in these actions. We have identified several key patterns in these cases which might not be immediately obvious to those who do not handle such cases regularly. We have unique insight into the problems caused by forced arbitration in sexual harassment cases, from both the clients’ and the litigators’ view.
This brief presents three case studies to help illustrate the problems created by forced arbitration, and why an unconscionability determination may be warranted in this instance. Forced arbitration silences victims, fosters serial predation, deprives victims of their access to our courts and a jury of their peers, and expects employees to foresee the likelihood of being abused on the job. The information presented herein will help the Court in recognizing the importance of these factors.
INTRODUCTION
Plaintiff-respondent Andowah Newton (“plaintiff”) signed a forcedarbitration agreement with defendant-appellant LVMH Moët Hennessy Louis Vuitton Inc (“appellant”) in 2014 (Record on Appeal [“R.”] 60), which the lower report/new-yorks-metoo-arbitration-law-faces-appeals-court-battles (last accessed Feb. 11, 2021).
court held was superseded by a 2018 amendment to the employment handbook (R. 17-18). As a result, the lower court denied appellant’s motion to dismiss the action and compel arbitration (R. 16). The lower court also held that, even had the original clause not been superseded by the amendment, it was invalidated by CPLR § 7515, passed in 2018, which provides that forced-arbitration clauses invalid in sexual harassment cases (R. 7).
Appellant now asks this Court to reverse the motion court’s decision, primarily on the basis of its arguments that the Federal Arbitration Act (9 USC § 1 et seq.) preempts CPLR § 7515, and that arbitrability is an issue for the arbitrator to determine. Plaintiff and Public Justice, P.C. and National Employment Lawyers Association-New York, as amici, have capably articulated why the lower court was correct on both grounds, and thus, should be affirmed. This brief will not repeat those arguments. Rather, this brief is respectfully submitted in the event this Court agrees with appellant and reverses the lower court. In such instance, the Court should remand the action for a determination by the lower court – and not an arbitrator – whether the specific clause herein was unconscionable.
ARGUMENT
I. The FAA Does Not Protect Unconscionable Contract Terms
It is well established that an unconscionable contractual term is unenforceable. 2 While issues regarding the FAA and CPLR § 7515 make their way through the courts and legislatures, it is essential that the more fundamental concept in contract law of conscionability is not overlooked. Assuming here, for purposes of argument, that CPLR § 7515 is indeed preempted by the FAA, the question remains whether the FAA prohibits courts from conducting their own assessment of the conscionability of a forced-arbitration provision. As such, if a court were to determine that the forced-arbitration clause plaintiff executed with appellant was unconscionable, neither the FAA nor CPLR § 7515 would apply.
The answer, both in the plain language of the statute, and the Supreme Court’s interpretation of it, is unequivocal: arbitration agreements subject to the FAA remain subject to court review. Specifically, the FAA provides that an arbitration provision “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract” (9 USC § 2 [emphasis added]). Indeed, the Supreme Court has explicitly recognized that the FAA does not revive forced-arbitration provisions that are unconscionable. “This saving clause permits agreements to arbitrate to be invalidated by “generally
2 See generally Brief of Plaintiff-Respondent, p. 45-48.
applicable contract defenses, such as fraud, duress, or unconscionability” (AT&T Mobility LLC v Concepcion, 563 US 333, 339 [2011], citing Doctor’s Associates, Inc. v. Casarotto, 517 US 681, 687 [1996]). The Supreme Court has expressly declined to interpret any limitations on this clause (Concepcion, 563 US at 342-43; see also id. at 353, wherein Justice Thomas, concurring, distinguishes his position from the majority insofar as he “would find [some additional] limit in the FAA’s text.”)
Thus, as a threshold issue, courts must find a forced-arbitration clause conscionable, regardless of the applicability of CPLR § 7515 or the FAA. In New York, “The doctrine of unconscionability … protects against ‘unjust enforcement of onerous contractual terms which one party is able to impose [upon] the other because of a significant disparity in bargaining power’” (159 MP Corp. v Redbridge Bedford, LLC, 33 NY3d 353, 360 [2019], citing Rowe v. Great Atlantic & Pacific Tea Co., 46 NY2d 62, 68 [1978]). In assessing conscionability, courts must consider public policy. In Redbridge, 33 NY3d at 353, for example, the Court of Appeals contemplated the validity of a contractual term almost entirely on public policy grounds (see generally id.). Public policy issues are so integral to the determination of a contract’s validity that they may be raised and considered for the first time on appeal, as was the case in Redbridge (Redbridge, 160 AD3d 176 [1st Dept 2018], aff’d 33 NY3d 353 [2019], citing Matter of Niagara Wheatfield
Adm'rs Assn. [Niagara Wheatfield Cent. School Dist.], 44 NY2d 68, 72 [1978]).
The Redbridge court ultimately upheld the clause at issue, on the basis that New York public policy required it, in its context: a commercial lease dispute (id at 356). The Court explained: “Here, the declaratory judgment waiver is clear and unambiguous, was adopted by sophisticated parties negotiating at arm's length, and does not violate the type of public policy interest that would outweigh the strong public policy in favor of freedom of contract” (id. at 363).
It is imperative in this case that the lower court be permitted to conduct this type of analysis, with New York’s public policy in mind.
II. New York State and New York City Have Strong Public Policies Against Silencing Sexual Harassment Victims
Both New York City and New York State have strong public policies against the silencing of sexual harassment victims.
In May 2018, New York City passed the “Stop Sexual Harassment in NYC Act”, a package of eleven eponymous bills which create training and documentation requirements. In conjunction with the legislation, then-Council Member Jumaane Williams stated:
“One of the factors that permits sexual harassment to fester and poison the workplace is because it is allowed to remain hidden in plain sight... We cannot solve the problem if we cannot see it for the urgent danger that it is.” 3
3 New York City Council, “Council to Vote on Sexual Harassment Legislative Package and the Creation of a Charter Revision Commission,” April 11, 2018, available at https://council.nyc.gov/press/2018/04/11/1591/ (last accessed Feb. 10, 2021).
And New York State, of course, evidenced its clear intent as a matter of public policy to unbind victims of sexual harassment from forced arbitration by enacting CPLR § 7515.
Beyond our City and State, a growing body of lawmakers and activists have increasingly come to recognize the extraordinary harm that forced arbitration causes to sexual harassment victims. Thus, in September 2019, the U.S. House of Representatives passed H.R. 1423, the FAIR Act (the Forced Arbitration Injustice Repeal Act), which would prohibit the use of forced arbitration in employment discrimination cases; however, the Senate version stalled, and the bill must now be reintroduced this legislative session. Several groundbreaking studies have established that employees who are subject to forced-arbitration clauses are less likely to pursue their discrimination claims, 4 less likely to win in arbitration, 5 and those who do courageously take the risk receive lower monetary awards. 6 As a
4 Estlund, Cynthia L., The Black Hole of Mandatory Arbitration (January 28, 2018). North Carolina Law Review, 96 North Carolina Law Review 679 (2018), NYU School of Law, Public Law Research Paper No. 18-07, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3111826 (last accessed Feb. 12, 2021).
5 Stone, Katherine V.W, Colvin, Alexander J.S., The Arbitration Epidemic: Mandatory Arbitration Deprives Workers and Consumers of their Rights (December 7, 2015). Economic Policy Institute, available at https://www.epi.org/publication/the-arbitration-epidemic/ (last accessed Feb. 12, 2021).
6 Peck, Emily “The Secret Courts Companies Use to Evade Justice,” HuffPost, Sept. 11, 2019, available at https://www.huffpost.com/entry/forced-arbitration-secretcourts_n_5d77ab38e4b0fde50c2d89c6?guccounter=1 (last accessed Feb. 11, 2021). (“ Darden Restaurants, owners of the Olive Garden and LongHorn Steakhouse chains, was the company with the most employment arbitration cases at the AAA, the researchers found. Darden has faced many lawsuits in public courts ― but the differences between what happened to the company in
result, many Forbes 500 companies and law firms have taken a stand against forced arbitration, including Google, Microsoft Corp., Uber, Google, Facebook, Lyft, Slack, Airbnb, Skadden Arps Slate Meagher & Flom LLP, Sidley Austin, Kirkland & Ellis LLP and Orrick, Herrington & Sutcliffe LLP.
Plaintiff’s arbitration clause must be evaluated within the context of these well-documented public policy priorities.
III. Practitioners Recognize Otherwise-Hidden Patterns Caused by Forced Arbitration
Crumiller regularly represents victims of sexual harassment and discrimination as well as employees subject to forced arbitration agreements. We have seen first-hand the damage that these clauses do, both to our clients’ monetary recovery, and also to their feelings as victims of being silenced and then re-victimized by forced arbitration. The following case studies illustrate some common problems created by the use of forced arbitration.
A. Forced Arbitration Hides Recidivism: Case Study #1
One of the biggest problems with forced arbitration in sexual harassment cases is that it hides recidivism.
court versus in arbitration are striking. Since 2005, when arbitration was in less widespread use, Darden has paid over $14 million to settle lawsuits filed in court over wage theft. In arbitration, it’s fared much better. Over the five-year period the researchers looked at, the Olive Garden owners faced 329 claims from workers. But in only eight cases did the company have to pay out damages ― for a total of $73,961.”)
Crumiller represented one client who had been horrifically sexually harassed at her workplace, including repeat assaults by customers who were not banned from the store where she worked (although shoplifters and proselytizers were). She suffered so greatly that she became suicidal. After repeated complaints to her store manager were ignored and/or laughed at, she escalated her complaints to central Human Resources. She was promptly fired thereafter. Coming forward and hiring an attorney requires extraordinary emotional strength and stamina. Our client summoned all of her reserves in order to pursue her action so that other women would not suffer the same fate. Once we had been retained, she was devastated to learn about the consequences of the forcedarbitration clause she had signed as a condition of her employment. Left without meaningful legal recourse, our client published an Open Letter to the company’s CEO. She explained:
Now, after everything I have been through, to learn that I am being forced into arbitration, and deprived of my day in court, feels like a slap in the face. [The company’s] forced arbitration policy requires me to pursue my claims in a hidden, secretive process. My adjudicator, who will make decisions not only about the merits of my case but also the scope of documents I am allowed to access, is compensated directly by [the company]. The worst part is that without public accountability, [the company] has no real incentive to change its practices. As a victim, being silenced is hard, on a personal level; but to think that my efforts could have no benefit to future female … employees, who may suffer exactly as I have suffered, is unspeakably disheartening. It is the ultimate disempowerment. 7
7 Further identifying details are omitted in accordance with the terms of the settlement agreement between the parties.
As a result of the publicity our client’s Open Letter garnered, we were contacted by multiple others facing similar battles against that company and with similar allegations. Indeed, our firm was able to coordinate with another plaintiff’s attorney, representing a client in a similar case against the same company, at a nearby geographical location. Had these cases been in court, we practitioners would have identified the pattern of recidivism immediately by reviewing court dockets, as is a regular part of due diligence for any litigator. 8
Worse, the difficulty in coordinating with other sexual harassment victims is exacerbated by the pervasive shame that accompanies the experience. In one case, our firm represented several victims of one assailant, who sat next to each other at their desks for years without sharing their experiences with each other. In our experience, that is the norm. Victims feel frightened, ashamed, and alone. The entire #MeToo phenomenon was built off the idea that victims finally were realizing that they were not the lone victim of a serial offender. At last, victims were finding each other, which resulted in law enforcement and workplaces finally taking action against repeat predators. Because of its confidential nature, forced arbitration exacerbates the natural siloing that occurs in these situations. The
8 See Linette Lopez, “The Great Shame Transfer,” Business Insider, November 29, 2017, available at https://www.businessinsider.com/sexual-assault-victims-shifting-shame-fromthemselves-to-perpetrators-2017-11 (last accessed Feb. 10, 2021) (describing how shame keeps victims silent).
emotional impact of going public with one’s allegations simply cannot be overstated. By hiding recidivism, forced arbitration creates an additional barrier for victims.
B. Employees Have a Right to a Jury of Their Peers: Case Study #2
Crumiller represents another client who we argue was fired in retaliation for taking maternity leave. 9 The employer is a multi-billion dollar investment company owned by the billionaire Baker Brothers, Felix and Julian Baker. As a condition of her employment, our client signed a forced arbitration clause. Our civil legal system is founded on the principle that disputes are entitled to be resolved by juries of our peers. And yet, our client – destitute and on the verge of homelessness with her young family – has only access to a body of arbitrators that are statistically, systematically, and pragmatically much closer aligned to her perpetrators than to herself. The point of a jury is that regular American citizens, and not simply those of us who have been privileged enough to achieve extraordinarily high levels of education and prestige, are the ones who should be evaluating the damage and suffering that others experience. Indeed, our client has already had to ask the American Arbitration Association for an additional list of
9 As we allege, our client was openly dissuaded from taking maternity leave; warned not to; and, upon her return, promptly fired, instructed to lie and say that she was resigning, and swiftly replaced with a woman without children.
ten possible arbitrators to choose from as the first list included almost exclusively former management-side employment attorneys.
As an attorney who believes in our justice system, it is not only disheartening on a personal level to have to tell a client that justice is not accessible to her; it represents a failure of our legal system to uphold the principles we ostensibly serve.
C. Employees Don’t Expect to Be Assaulted and Abused: Case Study #3
When Andowah Newton accepted her position, she could never have reasonably contemplated that the job would entail being harassed and assaulted. On the other hand, LMVH could – and did – reasonably anticipate that employees like Ms. Newton would be subject to unlawful harassment over the course of her employment. Suppose she and LMVH had been on perfectly equal bargaining footing, and arbitration was not well-known and well-documented to favor employers over employees, and she was willing to accept the possibility of arbitration as a vehicle for any future disputes over her contract. Could she –should she – have possibly been expected to predict that one of her coworkers might sexually harass and assault her, and that she would be punished for it? Of course not. The suggestion that a female employee must undertake, as part of her onboarding, the additional steps of contemplating her own future sexual assault at the hands of her employer’s agents, is shocking. Indeed, forcing female employees
to bargain away their rights, in the context of an unforeseeable sexual harassment and assault, is an agreement that “no person in his or her senses and not under delusion would make on the one hand, and as no honest and fair person would accept on the other, the inequality being so strong and manifest as to shock the conscience and confound the judgment of any person of common sense.”
(Matter of Hennel, 29 NY3d 487, 495 [2017] [citations omitted]).
It is therefore the responsibility of the lower court to evaluate these circumstances to ascertain whether the standards of unconscionability apply.
CONCLUSION
The lower court’s decision should be upheld, on one or both grounds. However, if it is not, this Court should remand proceedings for a determination whether the arbitration clause was unconscionable.
Dated: February 12, 2021 Brooklyn, New York
Respectfully submitted,
Susan K. Crumiller
Crumiller P.C.
16 Court St, Ste 2500 Brooklyn, NY 11241 (212) 390-8480
susan@crumiller.com
Counsel for Amicus Curiae
Crumiller P.C.
