A black female former WeWork Companies Inc. executive asked a New York federal judge to fast-track for appeal her contention that state law blocks her from being forced to pursue her race and sex bias claims in arbitration rather than court.
Ayesha Whyte wants the Southern District of New York to certify for interlocutory review for the Second Circuit the question of whether the Federal Arbitration Act preempts New York Civil Practice Law and Rules § 7515, which prohibits mandatory arbitration of job discrimination and harassment claims.
She says an immediate appeal is proper because a ruling by the U.S. Court of Appeals for the Second Circuit in her case will likely impact “literally thousands of other employees” the New York state legislature intended to protect when it passed Section 7515.
The original version of the anti-arbitration law was signed into law by Gov. Andrew Cuomo (D) in April 2018 to bar employee non-disclosure agreements and other employment practices believed to limit the effectiveness of sexual harassment laws.
The U.S. District Court for the Southern District of New York ruled June 11 that the FAA broadly favors the enforcement of arbitration agreements and wasn’t displaced by Section 7515.
But whether the FAA really preempts Section 7515 is an issue of first impression on which there are substantial grounds to disagree, Whyte says in her July 3 filing. That’s one of the bases a party needs to have a legal question certified for appeal before a final judgment has been entered in a case.
New York is just one among “a growing chorus” of states that has enacted mandatory employment arbitration bans, including California, Maryland, New Jersey, Vermont, and Washington, Whyte says.
Like other federal jurists, Judge Colleen McMahon’s decision requiring Whyte to arbitrate her claims extends the scope of the FAA “far beyond what congress originally intended” when it passed that law in 1925, she says.
Mandatory employment arbitration clauses have proliferated as a result, enabling employers to silo “the voices of marginalized employee groups” for decades by steering claims away from open court to private, confidential proceedings, she says.
Rafkin Esq. PLLC represents Whyte. Morgan, Lewis & Bockius LLP represents WeWork.
The case is Whyte v. WeWork Cos., S.D.N.Y., No. 1:20-cv-01800, petition seeking permission for immediate appeal 7/3/20.