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New York Court Discusses a Contractual Agreement to Arbitrate a Wage Dispute

January 20, 2020

Although employment in New York is generally at will, people who are members of a union may be subject to contractual agreements. Specifically, union members are often bound by collective bargaining agreements that dictate not only the terms of their employment but how any disputes must be handled. Recently, the United States District Court for the Southern District of New York discussed when plaintiffs may be forced to arbitrate a wage claim pursuant to a collective bargaining agreement. If you are a member of a union and your employer failed to pay you the compensation you are owed, it is advisable to speak with a dedicated New York wage and hour attorney to determine what recourse is available for your damages.

Facts Regarding the Collective Bargaining Agreement

Allegedly, the plaintiffs were employed by the defendant waste management company prior to 2015. While the plaintiffs were employed by the defendant, they were members of a union that signed a collective bargaining agreement with the defendant, with a term period of January 1, 2012, through December 31, 2015. In early December 2015, the plaintiffs filed a lawsuit against the defendant, alleging eight causes of action arising out of the defendant’s failure to pay the plaintiffs wages they were owed.

Reportedly, in December 2015, after the plaintiffs had terminated their agreement with the defendant, the union executed a memorandum extending the previous collective bargaining agreement until December 31, 2015. In December 2016, a second memorandum agreement was signed that modified the grievance procedure of the agreement by including an arbitration clause. The defendant then filed a motion to compel arbitration based on the terms of the second memorandum. The plaintiffs opposed the motion on the grounds they were no longer employees and therefore were no longer subject to the agreement.

Arbitration Pursuant to a Contract

Parties that have agreed to arbitration may be compelled to arbitrate a dispute. In evaluating whether a dispute must be arbitrated, the court will assess whether a contract exists that includes a valid agreement to arbitrate, and if so, whether the dispute falls under the scope of the agreement to arbitrate. If there are doubts concerning the scope of the issues that may be arbitrated, they should be resolved in favor of arbitration.

Under the Federal Arbitration Act, questions of whether a dispute should be arbitrated should be resolved by the court unless the parties clearly and indisputably agreed to arbitrate an issue. The parties cannot delegate the issue of deciding whether they formed an agreement to arbitrate in the first place to the arbitrator. Additionally, whether a person or entity is a party to an agreement to arbitrate is included within the larger issue of whether the parties agreed to arbitrate.

In the subject case, the court found that the collective bargaining agreement that applied to the plaintiffs ran from 2012 through 2015. The 2016 memorandum, which applied to present and future employees, was entered into after the plaintiffs stopped working for the defendant and therefore did not apply to the plaintiffs. As such, the court denied the defendant’s motion to compel arbitration.

Meet With a Seasoned Wage and Hour Attorney

Your employer is obligated to pay you the wages you are owed, and if they fail to do so, they can be held civilly liable. If you believe your employer owes you compensation, you should meet with a New York wage and hour attorney to discuss your options. The experienced attorneys of Gerstman Schwartz LLP have the knowledge and skills needed to help you seek a just result, and we will work diligently on your behalf. You can contact us through our online form or by calling our Manhattan office at (212) 227-7070 or our Garden City office at (516) 880-8170 to set up a confidential and complimentary meeting.

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