# Lee v. Insomnia Cookies, LLC

> District Court, W.D. New York · March 11, 2024

URL: https://www.frixlaw.com/law-library/cases/10366952

## Case

- **Court:** District Court, W.D. New York
- **Decided:** March 11, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

JOSEPH LEE,
on his own behalf and on behalf of others similarly
situated,
Plaintiff,
Case # 23-CV-6321-FPG
v.
DECISION AND ORDER
INSOMNIA COOKIES LLC, KRISPY KREME INC.,
SERVE U BRANDS, INC., and
SETH BERKOWITZ,

Defendants.

INTRODUCTION
Plaintiff, Joseph Lee, brings this action against defendants INSOMNIA COOKIES LLC
(“Insomnia Cookies”); KRISPY KREME INC. (“KKI”); SERVE U BRANDS, INC. (Serve U”);
and SETH BERKOWITZ (collectively, the “Defendants”), alleging several violations of the Fair
Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”). Plaintiff brings his
claims individually and on behalf of a class of other employees similarly situated as a collective
action under the FLSA and as a class action under Federal Rule of Civil Procedure 23. Defendants
bring the present motion for partial summary judgment to dismiss the collective action and class
claims. For the reasons stated below, Defendants motion for partial summary judgment is
GRANTED and the collective action and class action claims are DISMISSED.
BACKGROUND
Except as otherwise noted, Plaintiff and Defendants agree as follows:
On March 6, 2019, Plaintiff completed the Insomnia Cookies onboarding process at its
store location on Mount Hope Avenue in Rochester, NY. ECF No. 35 at ¶1. The onboarding process
consisted of reviewing and signing various company policies, including the MEDIATION AND
CLASS ACTION WAIVER AGREEMENT (“Waiver Agreement”), and was conducted through a
third-party digital portal called EfficientHire. Id. ¶1-2.
Through EfficientHire, a “New Employee Account” was created for Plaintiff using his
personal email address. Id. at ¶3. Plaintiff registered his new personalized account and accessed
the EfficientHire portal through his registered personalized account while at the store on Mount

Hope Avenue on March 6, 2019. Id. at ¶4. After gaining access to the EfficientHire portal using
his unique account, Plaintiff was prompted to review and assent to several Insomnia Cookies
policies, including the Waiver Agreement, by selecting “Yes” to the question, “Do you agree to the
terms of this policy?” Id. at ¶5. The system tracked Plaintiff’s answer, and whether Plaintiff agreed,
and if he did, indicated the date and time. Id. Plaintiff denies any recollection of being shown any
of these policies or reviewing and assenting to any individual policy. ECF No. 32-4 at ¶10.
Defendant’s records of the EfficientHire portal show that Plaintiff selected “yes” for each
individual policy at a separate time. ECF No. 37-2 at 4. Plaintiff’s assent to the Waiver Agreement
was recorded in the EfficientHire software at 7:16:14 PM. ECF No. 37-2 at 4. After recording his

assent to each individual policy, Plaintiff was shown a screen listing all the policies that he
reviewed, giving him the option to go back and review those policies again and change his
selection. ECF No. 35 at 6; ECF No. 37-1 at 28. The Waiver Agreement was among the policies
that he could have reviewed a second time. ECF No. 35 at 6. Upon completing his review of all
policies, Plaintiff was prompted to enter his unique account information again and click “approve”
at which point an electronic signature was applied to all policies simultaneously, including the
Waiver Agreement, at 7:21:56 PM. ECF No. 23-1 at 6; ECF No. 35 ¶7; ECF No. 37-2 at 3.
Defendants have moved for partial summary judgment to dismiss Plaintiff class and
collective action claims, asserting that the signed Waiver Agreement precludes Plaintiff from
bringing the claims alleged in the complaint as a class or collective action.
LEGAL STANDARD
A “court shall grant summary judgment” if the moving party “shows that there is no

genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law.” Fed.
R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986) (“[T]he plain
language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery
and upon motion, against a party who fails to make a showing sufficient to establish the existence
of an element essential to that party’s case, and on which that party will bear the burden of proof
at trial.”). In deciding whether there is a genuine dispute as to a material fact, the court is not to
evaluate credibility, and must draw all reasonable inferences and resolve all ambiguities in favor
of the non-moving party. See Kaytor v. Elec. Boat Corp., 609 F.3d 537, 454 (2d Cir. 2010).
Once the moving party has met its burden, the nonmoving party “must come forward with

specific evidence demonstrating the existence of a genuine dispute of material fact.” Brown v. Eli
Lilly & Co., 654 F.3d 347, 358 (2d Cir. 2011) (citing Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 249 (1986)). The nonmoving party may not, therefore, “rely on mere speculation or conjecture
as to the true nature of the facts to overcome a motion for summary judgment.” Knight v. U.S. Fire
Ins. Co., 804 F.2d 9, 12 (2d Cir. 1986). Nor is a “mere scintilla of evidence” in support of the
nonmoving party enough. Anderson, 477 U.S. at 252. The nonmoving party must do more than
cast a “metaphysical doubt” as to the material facts; it must “offer some hard evidence showing
that its version of the events is not wholly fanciful.” Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986); Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009) (“When a
motion for summary judgment is properly supported by documents or other evidentiary materials,
the party opposing summary judgment may not merely rest on the allegations or denials of his
pleading . . . .”). But, if “the evidence is such that a reasonable jury could return a verdict for the
nonmoving party,” the court must deny summary judgment. Anderson, 477 U.S. at 248.
DISCUSSION

There is no genuine dispute as to whether Plaintiff signed the Waiver Agreement. The
question the Court must address is whether the Waiver Agreement is enforceable against Plaintiff,
and if enforceable, whether it precludes Plaintiff from bringing class and collective action claims
in this case. Plaintiff argues that the Waiver Agreement is not enforceable against him because it
is unconscionable. The Court disagrees with Plaintiff’s unconscionability argument but will begin
by addressing whether the Waiver Agreement as written precludes the class and collective action
claims brought in this case.
I. The Waiver Agreement Prohibits the Class and Collective Action Claims in This
Case.

Plaintiff brings the following claims in this action: (i) illegal retention of tips in violation
of the FLSA and NYLL; (ii) failure to pay minimum wage and wage theft in violation of FLSA
and NYLL; (iii) failure to provide a “time of hire” wage notice in violation of the NYLL; (iv)
failure to provide wage statements in violation of NYLL; and (v) failure to pay deductible costs of
operating an automobile for business purposes. ECF No. 1.
In Section 1, the Waiver Agreement provides as follows:
“this Agreement applies, without limitation, to any dispute or controversy arising
out of, relating to . . . compensation . . . minimum wage . . . overtime . . . Fair Labor
Standards Act . . . any and all state statutes or regulations addressing the same or
similar subject matters, and all other federal or state legal claims arising out of or
relating to your employment or the termination of employment.”
ECF No. 23-1 at 2, Waiver Agreement § 1 (emphasis added).
Each of Plaintiff’s claims either directly invokes the FLSA, or if not, the claim invokes the
NYLL, which addresses the “same or similar subject matter” as the FLSA. Id.; see also Robinson
v. Great Performances/Artists as Waitresses, Inc., 195 A.D.3d 140, 145 (2021) (“The policies
behind the New York [Labor] laws are similar to the [FLSA].”). The last claim does not directly
invoke either statute, but since Plaintiff alleges a failure to pay reimbursable expenses, the Court

interprets that claim as alleging a compensation claim. Altogether, each of Plaintiff’s claims allege
a dispute regarding compensation or a violation of the FLSA or another “state statute[] . . .
addressing the same or similar subject matter.” ECF No. 23-1 at 2, Waiver Agreement § 1.
Therefore, all the claims brought by Plaintiff in this case are covered by the Waiver Agreement.
In Section 3, the Waiver Agreement clearly and unequivocally strips Plaintiff of the right
to bring a class or collective action in disputes covered by the Waiver Agreement. Section 3 of the
Waiver Agreement provides as follows:
“Both you and the Company agree that any proceeding to resolve or litigate any
dispute covered by this Agreement . . . will be conducted on an individual basis
only, and that neither you nor the Company will seek to have any controversy, claim
or dispute heard as a class action, a representative action, a collective action . . . or
any other action in which the Company or you propose to act in a representative
capacity on behalf of others. . . Accordingly there will be no right or authority for
you to bring any dispute covered by this Agreement as class or collective action, or
for you to participate as a member in any such class or collective proceeding.”
ECF No. 23-1 at 4, Waiver Agreement § 3 (emphasis added). Having already determined that the
Waiver Agreement covers claims such as those brought in this case, it necessarily follows that the
Waiver Agreement precludes the class and collective action claims brought in this case.
II. The Waiver Agreement is Not Unconscionable.
To demonstrate that a contract is unconscionable under New York law, Plaintiff must show
that the contract is one which “is so grossly unreasonable or unconscionable in the light of the
mores and business practices of the time and place as to be unenforceable according to its literal
terms.” Gillman v Chase Manhattan Bank, NA., 73 N.Y.2d 1, 10 (1988). “A determination of
unconscionability generally requires a showing that the contract was both procedurally and
substantively unconscionable when made—i.e., some showing of an absence of meaningful choice
on the part of one of the parties together with contract terms which are unreasonably favorable to
the other party.” Id. (internal quotation marks omitted).

“The procedural element of unconscionability concerns the contract formation process and
the alleged lack of meaningful choice.” Simar Holding Corp. v. GSC, 87 A.D.3d 688, 689 (2d
Dep’t 2011). Examples of procedural unconscionability include “high pressure commercial tactics,
inequality of bargaining power, deceptive practices and language in the contract, and an imbalance
in the understanding and acumen of the parties.” Id. at 689-690.
“The determination of unconscionability is a matter of law for the court to decide.” Simar
Holding Corp., 87 A.D.3d at 690. “Where the significant facts germane to the unconscionability
issue are essentially undisputed, the court may determine the issue without a hearing.” Scott v.
Palermo, 233 A.D.2d 869, 870 (4th Dep’t 1996).

Plaintiff argues that the execution of the Waiver Agreement is procedurally unconscionable
because of high pressure tactics and unequal bargaining power. Plaintiff argues that there was an
unequal bargaining power between him and his employer because he was a “line employee of a
large corporation, presented with a series of pre drafted documents the terms of which he could
not negotiate.” ECF No. 33 at 16. However, “mere inequality in bargaining power between
employers and employees is not alone sufficient to hold … agreements unenforceable,” Gold v.
Deutsche Aktiengesellschaft, 365 F.3d 144, 150 (2d Cir. 2004), “unless this power is somehow
abused.” See Robert S. Adler; Elliot M. Silverstein, When David Meets Goliath: Dealing with
Power Differentials in Negotiations, 5 Harv. Negot. L. Rev. 1, 7 (2000). Plaintiff has not alleged
that Defendants abused their bargaining power. Even if Plaintiff did make such an allegation, no
reasonable jury could agree with Plaintiff respecting the class action waiver because the Waiver
Agreement contained a 14-day opt-out period during which Plaintiff could have informed
Defendants of his choice not to give up that right. See ECF No. 23-1 at 4, Waiver Agreement § 4
(“Your Right to Opt Out of Class Action Waiver).1

Plaintiff further argues that Defendants employed high-pressure tactics to coerce him to
sign the agreement without reading it. Specifically, he states that he was “pressured by
management not to read any of the documents . . . but rather speed through the process as quickly
as possible.” ECF No. 33 at 16. Plaintiff supports this argument with the allegation that the
onboarding process took place in the “middle of his shift to create a time pressure . . . without
reading the screen or popups or asking questions…” ECF No. 32-4 ¶14.
None of these arguments militates a conclusion of procedural unconscionability. As an
initial matter, this alleged time pressure argument is unsupported by the evidence. Both Defendants
and Plaintiff agree that he executed the Waiver Agreement on March 6, 2019. ECF No. 32-5 ¶4.

Although Plaintiff alleges in his response declaration and counter statement of undisputed material
facts that his first day was March 6, 2019, ECF No. 32-5 ¶4, ECF No. 32-4 ¶3-4, Plaintiff originally
alleged in his complaint that his first day of employment was March 8, 2019. The March 8th start
date is consistent with the business records Defendants have submitted in reply, which shows no
record of Plaintiff working prior to March 8, 2019. Therefore, the dispute regarding Plaintiff’s date
of hire is created only by Plaintiff’s self-serving affidavit in support of his claim that he was rushed
during the signing process. The Court does not find the dispute genuine and concludes that no

1 Section 4 of the Waiver Agreement provides as follows: “You may submit a statement notifying the Company that
you wish to opt out and not be subject to this Agreement. In order to opt out, you must notify the Company within
fourteen (14) days of your receipt of this Agreement…” ECF No. 23-1 at 4, Waiver Agreement § 4 (emphasis added).
reasonable juror could conclude that Plaintiff’s first day of employment was any day other than
March 8, 2019. Since Plaintiff’s first day was March 8, 2019, and not March 6, 2019, the day he
completed the onboarding process, Plaintiff’s argument that he faced the high-pressure tactics to
quickly return to his delivery shift is without merit and will not be credited.
Even if Plaintiff could credibly argue that he was pressured to sign quickly, Plaintiff “cites

to no legal authority indicating that defendants were required to provide him with any certain
length of time to review the Agreement.” Acevedo v. Silk Corp., No. 153421/2016, 2017 WL
1345589, at *3 (N.Y. Sup. Ct. Apr. 12, 2017). The plaintiff in Acevedo, made similar allegations
that she was sped through the execution process, but that court refused to find the circumstances
procedurally unconscionable. Moreover, as in Acevedo, Plaintiff here does not attest that he
requested additional time to review the agreements and that such additional time was denied. Id.
He only argues that he felt pressure to move quickly because he needed to get back to a purported
delivery shift, for which there is no evidentiary basis to believe existed on that date. Finally, as
previously discussed, even if Plaintiff was in fact rushed through the process, he had 14 days to

change his mind through the opt-out provision. See ECF No. 23-1 at 4, Waiver Agreement § 4.
Plaintiff’s last argument is that he was not given the option to sign some documents and
not others during the onboarding process, but rather that he had to sign all the agreements at once.
Id. According to Plaintiff, this is evidenced by the fact that the timestamp on his electronic
signature for each of the documents he signed reflects the exact same second. ECF No. 33 at 16.
Defendants refute this claim with evidence showing that the portal through which Plaintiff
completed the onboarding process tracked when Plaintiff viewed and clicked “yes” on each
separate agreement at a separate moment in time. ECF No. 37 ¶ 7; ECF No. 37-2 at 4. Defendants
support this version of events by attaching a copy of the system log which shows that Plaintiff
clicked “yes” on the Waiver Agreement at 7:16:14 PM, six minutes before the timestamp that
recorded his electronic signature at 7:21:56 PM. ECF No. 37-2 at 4. Although the electronic
signature was applied uniformly at the same time, the system records show that Plaintiff viewed
each agreement separately and had the option to click “yes” or “no” for each one. Finally, Plaintiff
was also given the opportunity to go back and review any of the agreements to which he previously

indicated an assent. ECF No. 37 at ¶ 10.
Plaintiff does not put forth any arguments of substantive unconscionability and could not
because “a contractual proscription against class actions, such as contained in the agreements, is
neither unconscionable nor violative of public policy.” Ranieri v. Bell Atl. Mobile, 304 A.D.2d 353,
354 (1st Dep’t 2003); see also Horton v. Dow Jones & Co., Inc., 804 F. App’x 81, 84 (2d Cir. 2020)
(“a contractual proscription against class actions is neither unconscionable nor violative of public
policy.”).
Because Plaintiff has failed to demonstrate that the Waiver Agreement is unconscionable,
the Court must enforce the Waiver Agreement against Plaintiff. See W. Massachusetts Mut. Fire

Ins. Co. v. Hilton, 42 A.D. 52, 61(App. Div. 1st Dep’t 1899) (“If this contract is valid by the laws
of that state, we must enforce the contract, because the parties to it have entered into a valid and
bona fide contract, which imposes an obligation upon them, and which obligation they are bound
to perform.”). Here, the Waiver Agreement prohibits class and collective actions pursuing claims
of the type brought in this case. Accordingly, having signed and agreed to the terms of the Waiver
Agreement, Plaintiff may not bring the class and collective action claims asserted in this case.
CONCLUSION
For the foregoing reasons, Defendants’ motion for partial summary judgement (ECF No.
20) is GRANTED, and Plaintiff’s class and collective action claims asserted in the complaint (ECF
No. 1) are dismissed.

IT IS SO ORDERED.
Dated: March 11, 2024
Rochester, New York

RANK P. GE I, JR.
United States District Court
Western District of New York

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10366952. Public record. Not legal advice.