Court Opinion

ID: 9894868
Source: CourtListenerOpinion
Date Created: 2023-11-03 15:00:37.347986+00
Date Added: 2024-06-11T09:10:54.018698
License: Public Domain

22-2917-cv
Sanchez v. Clipper Realty, Inc.

                                  UNITED STATES COURT OF APPEALS
                                      FOR THE SECOND CIRCUIT

                                         SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.
CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS
PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A
SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE
(WITH THE NOTATION “SUMMARY ORDER“). A PARTY CITING A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY
COUNSEL.

      At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 3rd day of November, two thousand twenty-three.

         PRESENT: RAYMOND J. LOHIER, JR.,
                          BETH ROBINSON,
                          ALISON J. NATHAN,
                                  Circuit Judges.
         ------------------------------------------------------------------
         RODNEY SANCHEZ, on behalf of himself, FLSA
         Collective Plaintiff and the Class,

                           Plaintiff-Appellee,
                  v.                                                          No. 22-2917-cv

         CLIPPER REALTY, INC., DBA CLIPPER
         REALTY, CLIPPER REALTY OP L.P., DBA
         CLIPPER REALTY L.P., CLIPPER REALTY
         CONSTRUCTION LLC, CLIPPER 107 CH LLC,
         DBA CLOVER HOUSE, CLIPPER EQUITY LLC,
         DBA CLIPPER EQUITY,

                         Defendants-Appellants.
         ------------------------------------------------------------------
      FOR DEFENDANTS-APPELLANTS:                   Jeffrey D. Pollack, Kevin M.
                                                   Brown, Timothy J. Quill, Jr.,
                                                   Mintz & Gold LLP, New York,
                                                   NY

      FOR PLAINTIFF-APPELLEE:                      C.K. Lee, Rony Guldmann, Lee
                                                   Litigation Group, PLLC, New
                                                   York, NY

      Appeal from an order of the United States District Court for the Southern

District of New York (Katherine Polk Failla, Judge).

      UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the order of the District Court is AFFIRMED.

      Defendants-Appellants are real estate development and management

businesses who appeal from a November 1, 2022 order of the United States

District Court for the Southern District of New York (Failla, J.) denying their

motion to compel arbitration of claims filed by Plaintiff-Appellee Rodney

Sanchez. We assume the parties’ familiarity with the underlying facts, the

procedural history of the case, and the issues on appeal, to which we refer only

as necessary to explain our decision to affirm.

      Sanchez is a former employee of Clipper 107 CH LLC (“Clover House”).

During his employment Sanchez was a member of a bargaining unit represented

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by the Building Maintenance Employees Union, Local 486, NOITU-IUJAT.

During Sanchez’s employment with Clover House, Local 486 and Clover House

negotiated and entered into a collective bargaining agreement (“CBA”). The

CBA included an arbitration provision for resolving disputes and grievances

under the agreement. As both sides now agree, however, this provision did not

extend to the arbitration of employees’ claims arising under federal and state

laws. Sanchez was terminated by Clover House in September 2020 and filed the

current action in October 2021, alleging violations of the Fair Labor Standards

Act and New York Labor Law on behalf of a putative class, and violations of

nondiscrimination statutes on his own behalf. On March 23, 2022, while

Sanchez’s lawsuit was pending, Local 486 and Clover House entered into an

addendum to the agreement (the “Addendum”) that expressly provided for the

arbitration of employees’ statutory claims.

      On appeal, Defendants-Appellants argue that the Addendum requires

Sanchez to submit his statutory claims to arbitration, even though it was

executed over a year and a half after he had left Clover House. We disagree.

      “We review a district court's denial of a motion to compel arbitration de

novo.” Zachman v. Hudson Valley Fed. Credit Union, 49 F.4th 95, 100 (2d Cir.

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2022). While there is a “federal policy favoring arbitration of labor disputes,”

courts should not “use policy considerations as a substitute for party

agreement.” Loc. Union 97, Int’l Brotherhood of Elec. Workers, AFL-CIO v. Niagara

Mohawk Power Corp., 67 F.4th 107, 113 (2d Cir. 2023) (quotation marks omitted).

The Federal Arbitration Act “does not require parties to arbitrate when they have

not agreed to do so.” Schnabel v. Trilegiant Corp., 697 F.3d 110, 118 (2d Cir. 2012)

(quotation marks omitted). “The threshold question of whether the parties

indeed agreed to arbitrate is determined by state contract law principles.”

Nicosia v. Amazon.com, Inc., 834 F.3d 220, 229 (2d Cir. 2016).

      The parties agree that New York law governs our interpretation of the

CBA. See Abdullayeva v. Attending Homecare Servs. LLC, 928 F.3d 218, 222 (2d Cir.

2019) (relying on “state contract law principles” to determine the scope of an

arbitration provision in a collective bargaining agreement (quotation marks

omitted)). In particular, New York law governs whether Sanchez agreed to and

is bound by the Addendum containing the arbitration clause. “We are bound,

as was the district court, to apply the law as interpreted by New York’s

intermediate appellate courts . . . unless we find persuasive evidence that the

New York Court of Appeals, which has not ruled on this issue, would reach a

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different conclusion.” Pahuta v. Massey-Ferguson, Inc., 170 F.3d 125, 134 (2d Cir.

1999). While the New York Court of Appeals has never ruled on the issue, New

York’s intermediate appellate courts have repeatedly held that plaintiffs are not

bound by the arbitration terms of a CBA addendum when they were “no longer

defendant’s employees when it was executed, they were not parties to that

agreement, and there is no evidence that the [u]nion” executing the agreement

“was authorized to proceed on their behalf.” Konstantynovska v. Caring Pros.,

Inc., 103 N.Y.S.3d 364, 365 (1st Dept. 2019); see Lorentti-Herrera v. Alliance for

Health, Inc., 104 N.Y.S.3d 103, 104 (1st Dept. 2019) (“[N]either [plaintiff] nor any

other class member who was not employed by defendant when the [CBA

modification] was entered into is bound by the [modification’s] arbitration

provision.”); Teshabaeva v. Family Home Care Servs. of Brooklyn & Queens, Inc., 156

N.Y.S.3d 21, 22 (1st Dept. 2021); Hichez v. United Jewish Council of the E. Side, 117

N.Y.S.3d 214, 216 (1st Dept. 2020); Pustilnik v. Premier Home Health Care Servs.,

Inc., 164 N.Y.S.3d 446 (1st Dept. 2022).

      There is no dispute that Sanchez was no longer employed by Clover House

at the time the Addendum was executed. While unions “enjoy[] broad

authority in the negotiation and administration of the collective bargaining

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contract” and serve as the employees’ “exclusive representative for the purposes

of collective bargaining,” 14 Penn Plaza LLC v. Pyett, 556 U.S. 247, 255‒56 (2009)

(cleaned up), their authority to do so “traditionally runs only to the members of

[the] collective-bargaining unit,” Schneider Moving & Storage Co. v. Robbins, 466

U.S. 364, 376 n.22 (1984). The CBA provides that Local 486 is the “sole and

exclusive bargaining agency for all its full-time and regular part-time” porters,

handymen, and concierge at Clover House. J.A. 17. The District Court

properly interpreted the CBA to mean that Local 486 had the authority to

represent only current employees. See Schneider Moving & Storage Co., 466 U.S.

at 376 n.22. And there is no record evidence that Sanchez otherwise authorized

Local 486 to negotiate the Addendum on his behalf. See Konstantynovska, 103

N.Y.S.3d at 365. Local 486 therefore had no authority to negotiate any

agreement on Sanchez’s behalf after his employment with Clover House ended.

      Defendants-Appellants argue that by refusing to compel Sanchez to

arbitrate his statutory claims, the District Court ignored the “liberal federal

policy favoring arbitration agreements.” Meyer v. Uber Techs., Inc., 868 F.3d 66,

73 (2d Cir. 2017) (quotation marks omitted). But as we recently explained,

policy considerations are no substitute for party agreement. See Niagara Mohawk

                                          6
Power Corp., 67 F.4th at 113. Citing Smith/Enron Cogeneration Ltd. P’ship, Inc. v.

Smith Cogeneration Int’l, Inc., 198 F.3d 88, 99 (2d Cir. 1999), Defendants-

Appellants also maintain that absent an explicit temporal limitation, an

arbitration agreement may cover claims that accrued before the execution of the

agreement to arbitrate. Because we conclude as a matter of New York law

relating to former employees that Sanchez was not bound by the Addendum, we

do not think it makes a difference that the Addendum lacks such a temporal

limitation.

                                  CONCLUSION

      We have considered Defendants-Appellants’ remaining arguments and

conclude that they are without merit. For the foregoing reasons, the order of the

District Court is AFFIRMED.

                                       FOR THE COURT:
                                       Catherine O’Hagan Wolfe, Clerk of Court

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