Zambrano v. Strategic Delivery Solutions, LLC

Zambrano v. Strategic Delivery Solutions, LLC

Opinion

OPINION AND ORDER

Ramos, D.J.:

Christian Zambrano, Luz Durango, Moira Riveros, and Rigoberto Romero ("Plaintiffs") bring this putative collective and class action against Strategic Delivery Solutions, LLC ("SDS"), David Kronick, and Mike Ruccio ("Defendants"),¹ alleging that Defendants improperly classified them as independent contractors and denied them wages in violation of the Fair Labor Standards Act ("FLSA") and the New York Labor Law ("NYLL"). Before the Court is Defendants' motion to dismiss the Complaint and to compel arbitration. For the reasons stated below, Defendants' motion is GRANTED in part and DENIED in part, and this action is STAYED pending arbitration.

I. BACKGROUND

On October 26, 2015, Plaintiffs instituted this action, on behalf of themselves and all others similarly situated, against Defendants, their purported [*3]  employers. Complaint (Doc. 1).² Plaintiffs allege that they worked for Defendants as drivers delivering pharmaceutical products, id. ¶¶ 13, 27, 39, 51, and that Defendants violated the FLSA and NYLL by, among other things, failing to pay them overtime wages, making unlawful deductions from their wages, and requiring them to incur expenses for Defendants' benefit without reimbursement, id. ¶¶ 130, 135, 142, 143.

Defendants contend that Plaintiffs must submit their claims to arbitration pursuant to the Independent Vendor Agreement for Transportation Services ("Vendor Agreement") they each executed with SDS. Memorandum of Law in Support of Defendants' Motion to Dismiss the Complaint and to Compel Arbitration ("Defs.' Mem.") (Doc. 22) at 1.³ Namely, each Vendor Agreement contains an arbitration provision that provides:

Agreement to Arbitrate. The parties agree to comply and be bound by The Federal Arbitration Act. The parties agree that any dispute, difference, question, or claim arising out of or in any way relating to this Agreement or the transportation services provided hereunder shall be [*4]  subject to binding arbitration in accordance with the Rules for Commercial Arbitration of the American Arbitration Association ("AAA") in effect at the time such arbitration is initiated. The parties agree that the issue of arbitrability shall be determined by the arbitrator applying the law of the state of residence of the Vendor.⁴ The parties shall bear their own costs including, without limitation, attorneys' fees, and shall each bear one half (1/2) of the fees and costs of the arbitrator. Any arbitration shall be conducted before a single arbitrator selected from a list of potential arbitrators provided by the AAA. The arbitrator shall be a former judge or have at least ten (10) years experience in either commercial business legal practice or representation of clients in the transportation industry. The hearing shall be conducted in the city in or closest to the location where the Vendor performs its transportation services under this Agreement, unless both parties consent to a different location. Nothing in this Agreement shall be construed as limiting or precluding the parties from bringing any action in any court of competent jurisdiction for injunctive or other extraordinary [*5]  relief, in the event the arbitrator determines that it does not have jurisdiction to order such relief. The parties shall have the immediate right to seek such injunctive or other extraordinary relief at any time, including, without limitation, during the pendency of arbitration or other proceeding.

Declaration of Kimberly Edick in Support of Defendants' Motion to Dismiss the Complaint and to Compel Arbitration ("Edick Decl.") (Doc. 24), Exs. A—C ¶ 20(a). Defendants also contend that Plaintiffs must pursue their claims on an individual basis, citing a class waiver provision in the Vendor Agreement that provides:

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