On July 2, 2019, the U.S. Court of Appeals for the Second Circuit handed a significant victory to New York’s home care industry.¹  In Abdullayeva v. Attending Home Care Services, the appellate court reversed a lower court’s decision denying Attending Home Care Services’ (“Attending”) motion to compel arbitration of the plaintiff’s putative class action complaint, and sent the plaintiff’s claims under the Fair Labor Standards Act, New York Wage Parity and New York Labor Law to arbitration on an individual basis. This decision will impact other home care employers in New York with similar arbitration provisions in their collective bargaining agreements.  

Background

The arbitration agreement at issue, which was collectively bargained by Attending and the union, required that “all claims brought by either the Union or Employees, asserting violations of or arising under the Fair Labor Standards Act . . . New York Home Care Worker Wage Parity Law, or New York Labor Law (collectively, the “Covered Statutes”), in any manner, shall be subject exclusively, to the grievance and arbitration procedures described” in the remainder of the agreement, which provides that an employee who chooses to pursue a claim under one of the covered statutes must bring the claim in arbitration and on an individual, not class-wide basis.

The lower court took issue with the clause that stated an employee “may” submit claims to mediation, and if mediation failed, to arbitration.   The lower court held that the use of the term “may” in the arbitration agreement did not prevent the plaintiff from proceeding with her claims in federal court on a class-wide basis because it failed to meet the U.S. Supreme Court’s “clear and unmistakable” standard.  The lower court believed that the arbitration agreement was ambiguous because the term “may” could be interpreted to allow an employee the choice to bring her claims in arbitration or in court, and denied Attending’s motion to compel arbitration.

Second Circuit’s Decision

In overruling the lower court, the Second Circuit clarified that the Supreme Court’s “clear and unmistakable” standard does not apply to “whether the parties clearly and unmistakably agreed to arbitrate, but whether, once [it is] established that an agreement exists, that agreement clearly and unmistakably encompasses the plaintiff’s statutory claims.”  Thus, given there existed a collectively bargained arbitration agreement, and it specifically identified FLSA and NY Labor Law claims as being subject to mandatory arbitration, the Second Circuit held that the agreement satisfied the clear and unmistakable standard and that the plaintiff must arbitrate her claims on an individual basis.

If the matter had proceeded as a class action, the plaintiff would have represented a class of all of Attending’s home health aides.  Now Attending need only contend with one plaintiff in arbitration.

This victory is not solely Attending’s.  Dozens of home care agencies and unions across New York negotiated an identical or virtually identical arbitration agreement in their collective bargaining agreements and should be able to rest assured that any lawsuits alleging violations of statutes covered in the arbitration agreement should be compelled to arbitration on an individual, and not a class-wide, basis.