The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
Lucas Carrillo Edilson, Hector Sagastume Cornel, and
Ismar R. Ramirez, individually and on behalf of all others
similarly situated,
2:26-cv-01032
Plaintiffs, (NJC) (JMW)
-v-
With Pride Air Conditioning & Heating Inc., Michael
Dolan, as an individual,
Defendants.
MEMORANDUM AND ORDER
NUSRAT J. CHOUDHURY, United States District Judge:
On February 23, 2026, Plaintiffs Lucas Carillo Edilson, Hector Sagastume Cornel, and
Ismar R. Ramirez initiated this putative collective action against their former employers,
Defendant With Pride Air Conditioning & Heating Inc. and its owner and operator, Michael
Dolan. (ECF No. 1.) Plaintiffs bring claims under the Fair Labor Standards Act of 1938
(“FLSA”) and New York Labor Law (“NYLL”) for unpaid overtime wages and under the NYLL
for failure to provide wage notices and wage statements. (Id.)
On May 5, 2026, Defendants filed a motion to compel arbitration and stay litigation
pending the conclusion of arbitration, or in the alternative, to dismiss Plaintiffs’ NYLL claims
and all claims asserted by Plaintiff Cornel. (Mot. to Compel, ECF No. 22.) Plaintiffs opposed,
and Defendants filed a reply. (ECF Nos. 25, 27.)
On June 19, 2026, Defendants filed a motion for sanctions against Plaintiffs and their
counsel. (ECF No. 34.) Plaintiffs opposed, and Defendants filed a reply. (ECF Nos. 37, 39.)
This Court referred both motions to Magistrate Judge James Wicks for a written report
and recommendation. (Elec. Order, May 15, 2026.) Judge Wicks held oral argument on both
motions on July 8, 2026. (Min. Entry, July 8, 2026.)
On July 9, 2026, Judge Wicks issued a Report and Recommendation (“R&R”)
recommending that this Court grant Defendants’ motion to compel arbitration and, in the
alternative, grant in part and deny in part Defendants’ partial motion to dismiss. (R&R at 3–17,
ECF No. 42.) He also recommended that this Court deny Defendants’ motion for sanctions. (Id.
at 17–21.)
A copy of the R&R was provided to all counsel via ECF on July 8, 2025. (See id.) The
R&R instructed that any objections must be submitted in writing to the Clerk of Court within
fourteen (14) days of service of the R&R. (Id. at 21–22.) Consequently, the deadline to object to
the R&R was July 23, 2026. The date for filing any objections has thus expired, and no party has
filed an objection to the R&R.
In reviewing a report and recommendation, a court “may accept, reject, or modify, in
whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C.
§ 636(b)(1)(C). If no objections are filed, a district court reviews a report and recommendation
for clear error. King v. Paradise Auto Sales I, Inc., No. 15-cv-1188, 2016 WL 4595991, at *1
(E.D.N.Y. Sept. 2, 2016) (citation omitted); Covey v. Simonton, 481 F. Supp. 2d 224, 226
(E.D.N.Y. 2007). Because no party has timely filed objections to the R&R, I may review the
R&R for clear error. King, 2016 WL 4595991, at *1. Nevertheless, I reviewed the R&R de novo
out of an abundance of caution.
Having reviewed the motion papers, the applicable law, and the R&R, I adopt the
thorough and well-reasoned R&R’s recommendation to grant Defendants’ motion to compel
arbitration with the modifications discussed below and adopt in full the R&R’s recommendation
2
to deny Defendants’ motion for sanctions.
DISCUSSION
I. Motion to Compel Arbitration
I agree with Judge Wicks’ recommendation to find that Plaintiffs’ FLSA and NYLL
claims fall within the scope of the Arbitration Agreement and that, accordingly, these claims
must be resolved in arbitration. However, I disagree with the threshold recommendation to reject
Plaintiffs’ argument that the parties’ Arbitration Agreement is unenforceable on the basis that
“the parties . . . agreed to submit the question of arbitrability to the Arbitrator.” (R&R at 6.)
Although it is a close question, the Arbitration Agreement does not present clear and
unmistakable evidence of the parties’ intent to delegate to an arbitrator questions concerning
whether the Arbitration Agreement is enforceable as to a particular dispute. Accordingly, the
Court, not an arbitrator, must determine whether the Arbitration Agreement is enforceable as to
Plaintiffs’ claims.
Moving to that question, I fully adopt Judge Wicks’ carefully reasoned recommendation
to find that the Arbitration Agreement’s fee-shifting provisions and provision shortening the
limitations period for Plaintiffs’ NYLL claims are not unconscionable. Although Defendants
concede that the Arbitration Agreement’s provision shortening the limitations period is
unenforceable as to Plaintiffs’ FLSA claims, the proper remedy is to preclude application of this
provision to the FLSA claims—not to deem the entire agreement unenforceable. Accordingly,
the arbitrator shall interpret the Arbitration Agreement’s statute of limitations provision to apply
3
only to Plaintiffs’ NYLL claims—not the FLSA claims.1
Finally, I also adopt in its entirety Judge Wicks’ recommendation to find that Plaintiff
Cornel demonstrated his consent to the Arbitration Agreement and is therefore bound by it.
A. Delegation Provision
It is well established that “[a]rbitration is ‘a matter of contract,’ and arbitrators have
authority to resolve disputes ‘only because the parties have agreed in advance to submit such
grievances to arbitration.’” 1199 SEIU United Healthcare Workers E. v. Chinese-Am. Plan.
Council Home Attendant Program, ___ F.4th ___, No. 21-631, 2026 WL 1993408, at *18 (2d
Cir. July 10, 2026) (quoting Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 296
(2010)). “Thus, an arbitrator’s authority ‘is constrained foremost by [the] principle that a party
cannot be forced to arbitrate any dispute that it has not obligated itself, by contract, to submit to
arbitration.’” Id. Parties may not only contract to arbitrate certain categories of disputes, they
may also “contract to have arbitrators (rather than a court) decide whether a particular dispute is
to be arbitrated under the terms of the contract.” DDK Hotels, LLC v. Williams-Sonoma, Inc., 6
F.4th 308, 316 (2d Cir. 2021). The Supreme Court has made clear that “an agreement to arbitrate
a gateway issue is simply an additional, antecedent agreement the party seeking arbitration asks
the federal court to enforce, and the [Federal Arbitration Act (“FAA”)] operates on this
additional arbitration agreement just as it does on any other.” Henry Schein, Inc. v. Archer &
1 In opposition to the motion to compel, Plaintiffs also argued that the Arbitration Agreement’s
waiver-of-claims provision is unenforceable as unconscionable. However, on reply, Defendants
agreed to waive enforcement of that provision as to Plaintiffs’ FLSA and NYLL claims. (ECF
No. 25 at 8; ECF No. 27 at 3, n.3). Accordingly, I adopt the recommendation set forth in the
R&R to dismiss as moot Plaintiffs’ challenge to the Arbitration Agreement’s waiver-of-claims
provision. (R&R at 9 n.2).
4
White Sales, Inc., 586 U.S. 63, 68 (2019) (internal quotation marks omitted); see also DDK
Hotels, 6 F.4th at 316. “When the parties’ contract delegates the arbitrability question to an
arbitrator, the courts must [therefore] respect the parties’ decision as embodied in the
contract.” Henry Schein, Inc., 586 U.S. at 65.
Nevertheless, the Second Circuit has made clear that “‘threshold questions of
arbitrability,’ such as whether the arbitration agreement applies to a particular dispute,
‘presumptively should be resolved by the court and not referred to the arbitrator.’” DDK Hotels,
6 F.4th at 317. “Courts should not assume that the parties agreed to arbitrate arbitrability unless
there is clear and unmistakable evidence that they did so.” 1199 SEIU United Healthcare
Workers E., 2026 WL 1993408, at *18 (citing DDK Hotels, 6 F.4th at 317) (emphasis added). As
the Second Circuit has explained:
This “clear and unmistakable evidence” requirement reflects a departure from the manner
in which we treat silence or ambiguity when interpreting whether a particular merits-
related dispute falls within the scope of an arbitration agreement. Where the question is
whether a given dispute falls within the scope of the arbitration agreement (and is
therefore arbitrable), “[a]ny doubts concerning the scope of arbitrable issues should be
resolved in favor of arbitration.” Where, by contrast, the question is who should decide
arbitrability, there is a presumption that the question should be resolved by the court.
DDK Hotels, 6 F.4th at 317 (citing First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944–
45 (1995)). In discerning whether there is clear and unmistakable evidence that parties have
demonstrated an intent to delegate disputes concerning arbitrability to an arbitrator, courts “apply
ordinary state-law principles that govern the formation of contracts.” Id. Thus, the text of the
arbitration agreement is determinative. Id. However, when an arbitration agreement does not
explicitly address whether a court or arbitrator will decide questions of arbitrability, “courts must
look to other provisions of the agreements to see what contractual intention can be discerned
5
from them.” Id. at 318.
“[A]n agreement’s incorporation by reference of [the AAA Commercial Arbitration
Rules], which ‘explicitly empower an arbitrator to resolve questions of arbitrability,’ is ‘relevant
in evaluating whether there is clear and unmistakable evidence of the parties’ intent to delegate
the question of arbitrability to the arbitrator.’” 1199 SEIU United Healthcare Workers E., 2026
WL 1993408, at *20 (quoting DDK Hotels, 6 F.4th at 318). “But, as [the Second Circuit]
emphasized [in DDK Hotels], such a generic rule-incorporation provision does not per se qualify
as clear and unmistakable evidence of the requisite intent: rather, ‘context matters.’” Id. “Even
where an arbitration agreement contains such a general rule-incorporation provision, it may
elsewhere be ‘narrow, vague, or contain exclusionary language suggesting that the parties
consented to arbitrate only a limited subset of disputes.’” Id. “In such circumstances . . . the
agreement’s ‘incorporation of rules that empower an arbitrator to decide issues of arbitrability,
standing alone, does not suffice to establish the requisite clear and unmistakable inference of
intent to arbitrate arbitrability.’” Id.
The R&R concludes that “[h]ere, the parties themselves agreed to submit the question of
arbitrability to the Arbitrator,” relying on what is referred to as the “delegation provision” of the
Arbitration Agreement and a provision incorporating the AAA Commercial Arbitration Rules.
(R&R at 7.) However, neither the plain text of the agreement nor its incorporation of the AAA
Commercial Arbitration Rules demonstrates clear and unmistakable evidence that the parties
intended to delegate to an arbitrator the determination of whether the Arbitration Agreement is
enforceable as to a given dispute between the parties.
6
The delegation provision of the Arbitration Agreement provides:
Employee agrees that any controversy, claim, or dispute that Employee has arising out
of or relating to Employee’s employment and/or separation of employment shall be
adjudicated exclusively by binding Arbitration.
(ECF No. 24-1 at 5 (emphasis added).) The plain text of this provision is broad, but it does not
“express[] the intent to arbitrate all aspects of all disputes” as do provisions that, when coupled
with the incorporation of rules that expressly empower an arbitrator to decide issues of
arbitrability, constitute clear and unmistakable evidence of the parties’ intent to delegate the
question of arbitrability to the arbitrator. DDK Hotels, 6 F.4th at 318–19. Moreover, although it
is clear that Plaintiffs’ FLSA and NYLL claims themselves arise out of or relate to their
employment by Defendants, it is not clear that the parties’ dispute about whether Plaintiffs’
FLSA and NYLL claims are subject to compulsory arbitration arises out of or relates to their
employment.
By contrast, in Contec Corporation v. Remote Solution, Co., Ltd., an agreement
demonstrated an intent to delegate arbitrability disputes to an arbitrator by explicitly providing
that, “[i]n the event of any controversy arising with respect to this Agreement, both parties shall
use its best efforts to resolve the controversy. In the event the parties are unable to arrive at a
resolution, such controversy shall be determined by arbitration . . . .” 398 F.3d 205, 208 (2d Cir.
2005) (emphasis added). The agreement in Shaw Group. Inc. v. Triplefine International
Corporation similarly provided that “[a]ll disputes between you and us concerning or arising
out of this Agreement shall be referred to arbitration,” which “clearly and unmistakably
evidence[d] the parties’ intent to arbitrate questions of arbitrability.” 322 F.3d 115, 120, 125 (2d
Cir. 2003) (emphasis added). The Supreme Court reached the same conclusion in Rent-A-Center,
7
West, Inc. v. Jackson, when interpreting a provision that explicitly provided that “[t]he Arbitrator
. . . shall have exclusive authority to resolve any dispute relating to the . . . enforceability . . . of
this Agreement.” 561 U.S. 63, 67 (2010) (emphasis added). Each of these cases involved far
broader delegation provisions than the one at issue here, delegating to arbitration “all
controversies,” “all disputes,” and “any dispute” relating to the enforceability of the arbitration
agreement or arising out of the agreement, rather than selecting for arbitration only those
disputes arising out of or relating to employment or separation of employment.
In concluding that the parties agreed to delegate arbitrability disputes to arbitration, Judge
Wicks also relied on the Arbitration Agreement’s incorporation of the AAA Commercial
Arbitration Rules, which provide that “[t]he arbitrator shall have the power to rule on his or her
own jurisdiction, including any objections with respect to the existence, validity or scope of the
arbitration agreement.” (R&R at 7 (citing Section 6.1 of ADR Systems, ADR Systems
Commercial Arbitration Rules 11 (Effective January 25, 2023),
https://www.adrsystems.com/wp-content/uploads/2023/01/Commercial-Arbitration-Rules.pdf.).)
The Second Circuit has made clear that “[i]ncorporation of such rules into an arbitration
agreement does not, per se, demonstrate clear and unmistakable evidence of the parties’ intent to
delegate threshold questions of arbitrability to the arbitrator where other aspects of the contract
create ambiguity as to the parties’ intent.” DDK Hotels, 6 F.4th at 318; see also 1199 SEIU
United Healthcare Workers E., 2026 WL 1993408, at *20.
Here, such ambiguity exists for two reasons. First, for the reasons discussed above, the
plain text of the delegation provision does not refer to disputes about the interpretation or scope
of the Arbitration Agreement, much less make clear that such disputes are delegated to an
8
arbitrator for resolution. Second, other provisions of the Arbitration Agreement add to the
ambiguity concerning whether the parties intended to delegate arbitrability questions to an
arbitrator. The Arbitration Agreement provides:
If any term or provision of this Agreement is declared illegal or unenforceable, such term
or provision shall be reasonably modified by the Arbitrator to be enforceable. If not
possible, said provision or term shall be null and void, but leaving the remainder of the
Agreement in full force and effect.
(ECF No. 24-1 at 6 (emphasis added).) This provision uses the passive voice—“is declared”—to
refer to the fact that a term or provision of the agreement may be declared illegal or
unenforceable, without addressing whether such a declaration is made by a court or an arbitrator.
While the provision clearly grants an arbitrator the authority to modify the Arbitration
Agreement in the event such a declaration is made, it does not support a clear and unmistakable
impression that the arbitrator has the authority to declare a term or provision of the Agreement
illegal or unenforceable in the first place.
Therefore, although the record presents a close question, the Arbitration Agreement,
understood in light of its plain text and incorporation of the AAA Commercial Arbitration Rules,
does not show “clear and unmistakable evidence of the parties’ intent to delegate the question of
arbitrability to the arbitrator.” 1199 SEIU United Healthcare Workers E., 2026 WL 1993408, at
*20. Accordingly, the Court—and not an arbitrator—must determine whether any provisions
within the Arbitration Agreement are unenforceable, as Plaintiffs assert.
B. Validity of the Arbitration Agreement
Turning to the question of whether Plaintiffs’ claims are subject to binding arbitration, I
adopt in its entirety Judge Wicks’ thorough and careful recommendations as to the resolution of
Plaintiffs’ argument that the Arbitration Agreement is not enforceable due to unconscionability.
9
As a threshold matter, Judge Wicks correctly notes that Plaintiffs’ unconscionability argument
boils down to the position that the Arbitration Agreement’s two fee-shifting provisions and
provision shortening the limitations period for NYLL and FLSA claims to six months render the
entire agreement unenforceable as to Plaintiffs’ claims. (R&R at 9.) For the reasons explained in
the R&R and as set forth below, Plaintiffs’ argument is unpersuasive.
First, Plaintiffs have failed to marshal any evidence suggesting that either of the two fee-
shifting provisions in the Arbitration Agreement are unconscionable. R&R at 9–10; see also
Jones v. Landry’s, Inc., No. 1:23-cv-9920-GHW, 2025 WL 1527307 (S.D.N.Y. May 29, 2025)
(“The question of whether [fee-shifting] provisions are unconscionable ‘should focus on the
claimant’s ability to pay the arbitration fees and costs, the expected cost differential between
arbitration and litigation in court, and whether that cost differential is so substantial as to deter
the bringing of claims.”). Judge Wicks observed that one of the fee-shifting provisions in the
Arbitration Agreement is entirely inapposite to this action as it applies only to actions initiated
by the employer—whereas this case is initiated by employees. (R&R at 10.) Plaintiffs did not
object to Judge Wicks’ recommendation that the Court reject Plaintiffs’ argument that the
Arbitration Agreement is unenforceable as to Plaintiffs claims on the basis that the fee-shifting
provisions are unconscionable.
Second, the Arbitration Agreement provision shortening the limitations period is
enforceable as to Plaintiffs’ NYLL claims. As Judge Wicks catalogued, several courts in this
Circuit have enforced similar provisions, and Plaintiffs fail to point to any decision deeming such
provisions unenforceable. See R&R at 9; see, e.g., Keller v. About, Inc., No. 21-cv-228, 2021
WL 1783522, at *3 (S.D.N.Y. May 5, 2021) (collecting cases). Plaintiffs also declined to object
10
to Judge Wicks’ recommendation that the limitations period is enforceable at to their NYLL
claims.
Third, the Arbitration Agreement’s statute of limitations provision is unenforceable with
respect to Plaintiffs’ FLSA claims, as Defendants concede. (See Mot. at 11; R&R at 8.)
However, the proper remedy is to simply preclude application of this provision to the FLSA
claims. As noted above, the agreement explicitly provides that:
If any term or provision of this Agreement is declared illegal or unenforceable, such term
or provision shall be reasonably modified by the Arbitrator to be enforceable. If not
possible, said provision or term shall be null and void, but leaving the remainder of the
Agreement in full force and effect.
(ECF No. 24-1 at 6 (emphasis added).) Because the limitations period for the FLSA claims
cannot be shortened to six months, as Defendants concede, the arbitrator may nevertheless
enforce the Arbitration Agreement as to Plaintiffs’ FLSA claims without applying the limitations
provision.
Accordingly, the Arbitration Agreement, as modified to render the statute of limitations
provision null and void with respect to Plaintiffs’ FLSA claims, is enforceable as to all of
Plaintiffs’ claims. Plaintiffs have made no other arguments to show that their claims against
Defendants for unpaid overtime wages and for failure to provide wage notices and wage
statements are not subject to compulsory arbitration. Therefore, the parties must proceed in
arbitration with respect to all claims.
C. Other Findings
I also adopt in full Judge Wicks’ carefully reasoned recommendation that I find that the
Arbitration Agreement applies to Plaintiff Cornel in light of his demonstrated consent to the
agreement. (R&R at 10–12.) Further, I adopt Judge Wicks’ alternative recommended ruling that,
11
in the event that Plaintiffs’ FLSA and NYLL claims are not subject to compulsory arbitration,
Defendants’ partial Motion to Dismiss is granted in part and denied in part for the reasons stated
in the R&R. (R&R at 10–17.)
II. Motion for Sanctions
Finally, I deny Defendants’ motion for sanctions for the reasons explained in the R&R.
(R&R at 17–21.) Plaintiffs made colorable arguments, including the argument that this Court—
and not an arbitrator—must determine whether the Arbitration Agreement is enforceable as to
Plaintiffs’ claims. Moreover, Plaintiffs also correctly argue that the Arbitration Agreement’s
statute of limitations provision is not enforceable against Plaintiffs’ FLSA claims—a point that
Defendants concede.
CONCLUSION
Accordingly, Defendants’ motion to compel arbitration is granted. (ECF No. 22.)
Defendants’ motion for sanctions under Rule 11 is denied. (ECF No. 34.)
Dated: Central Islip, New York
August 7, 2026
/s/ Nusrat J. Choudhury
NUSRAT J. CHOUDHURY
United States District Judge
12
UNITED STATES DISTRICT COURT CLERK
EASTERN DISTRICT OF NEW YORK 7/9/2 026
--------------------------------------------------------------------X
LUCAS CARRILLO EDILSON, U.S. DISTRICT COURT
HECTOR SAGASTUME CORNEL and EASTERN DISTRICT OF NEW YORK
LONG ISLAND OFFICE
ISMAR R. RAMIREZ,
individually and on behalf of all others similarly situated,
Plaintiffs,
REPORT AND
RECOMMENDATION
-against-
2:26-cv-01032 (NJC) (JMW)
WITH PRIDE AIR CONDITIONING & HEATING INC.
and MICHAEL DOLAN,
Defendants.
--------------------------------------------------------------------X
A P P E A R A N C E S:
James Patrick Peter O’Donnell
Katelyn Marie Schillaci
Roman M. Avshalumov
Helen F. Dalton & Associates
80-02 Kew Gardens Road, Suite 601
Kew Gardens, NY 11415
Attorneys for Plaintiffs
Jamie Scott Felsen
Milman Labuda Law Group PLLC
3000 Marcus Avenue, Suite 3w8
Lake Success, NY 11042
Attorney for Defendants
WICKS, Magistrate Judge:
Plaintiffs Lucas Carrillo Edilson, Hector Sagastume Cornel, and Ismar R. Ramirez
commenced this action against their former employer, Defendant With Pride Air Conditioning &
Heating Inc., and its owner, Defendant Michael Dolan, for allegedly failing to pay overtime
wages as required by the Fair Labor Standards Act (“FLSA”) and the New York Labor Law
(“NYLL”) and for failing to provide wage statements and notices as required by NYLL. (See
generally ECF No. 1.) Presently before the Court are Defendants’ motion (1) to compel
arbitration, or, in the alternative, motion to dismiss in part (ECF No. 22); and (2) for sanctions
under Rule 11. (ECF No. 34.)
For the reasons that follow, the undersigned respectfully recommends that Defendants’
motion to compel arbitration be granted and, in the alternative, if the District Judge declines to
compel arbitration, then grant in part and deny in part Defendants’ motion to dismiss. Finally, the
undersigned respectfully recommends Defendants’ motion for sanctions be denied.
PROCEDURAL BACKGROUND
Plaintiffs filed the Complaint on February 23, 2026. (ECF No. 1.) On May 5, 2026,
Defendants filed a motion to compel arbitration and stay litigation pending the conclusion of
arbitration; alternatively, Defendants requested dismissal of all claims under the NYLL and all
claims asserted by Cornel. (ECF No. 22.) Plaintiffs’ opposition (ECF No. 25) and Defendants’
reply (ECF No. 27) were bundle-filed the same day. The Honorable Nusrat J. Choudhury
referred the motion to the undersigned for a written report and recommendation. (Electronic
Order dated May 15, 2026.)
On June 19, 2026, Defendants filed a motion for sanctions against Plaintiffs and their
counsel. (ECF No. 34.) Plaintiffs’ opposition (ECF No. 37) and Defendants’ reply (ECF No. 39)
were bundle-filed the same day.
The Court held oral argument on both motions on July 8, 2026.
I
MOTION TO COMPEL ARBITRATION
I. Legal Framework to Compel Arbitration
Under Section 2 of the Federal Arbitration Act (“FAA”), “[a] written provision in ... a
contract ... to settle by arbitration a controversy thereafter arising out of such contract ... shall be
valid, irrevocable, and enforceable[.]” 9 U.S.C. § 2. State contract law governs the inquiry into
whether a valid arbitration agreement exists. Meyer v. Uber Techs., Inc., 868 F.3d 66, 73 (2d Cir.
2017).
Section 4 of the FAA provides in relevant part that:
A party aggrieved by the alleged failure ... of another to arbitrate under a written
agreement for arbitration may petition any United States district court which, save
for such agreement, would have jurisdiction ... of the subject matter of a suit
arising out of the controversy between the parties, for an order directing that such
arbitration proceed in the manner provided for in such agreement.
9 U.S.C. § 4.
Pursuant to the FAA when, “upon any issue referable to arbitration under an agreement in
writing for such arbitration, the court in which such suit is pending ... shall on application of one
of the parties stay the trial of the action until such arbitration has been had.” 9 U.S.C. § 3.
Deeply rooted is the “liberal federal policy favoring arbitration agreements, and plac[ing]
arbitration agreements on the same footing as other contracts.” Meyer, 868 F.3d at 73 (internal
quotation marks and citations omitted). The Supreme Court has repeatedly described the FAA as
the embodiment of a federal policy favoring arbitration agreements. See AT&T Mobility LLC v.
Concepcion, 563 U.S. 333, 345–46 (2011) (collecting cases). Indeed, Congress enacted the FAA
to “overcome judicial resistance to arbitration” and “place[ ] arbitration agreements on equal
footing with all other contracts.” Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443
(2006).
Fundamentally, and perhaps most obvious, is that parties may only be compelled to
arbitrate if in fact they have agreed to do so. Meyer, 868 F.3d at 73. First, the Court must
determine whether a valid arbitration agreement exists between the parties. Id. Second, if the
Court finds that a valid arbitration agreement exists between the parties, then the Court will
consider whether the parties’ dispute is within the scope of the arbitration agreement. Id. at 74.
Motions to compel arbitration under Section 4 of the FAA are analyzed under a similar
standard as motions for summary judgment. Bensadoun v. Jobe–Riat, 316 F.3d 171, 175 (2d Cir.
2003). “Allegations related to the question of whether the parties formed a valid arbitration
agreement . . . are evaluated to determine whether they raise a genuine issue of material fact that
must be resolved by a fact-finder at trial.” Schnabel v. Trilegiant Corp., 697 F.3d 110, 113 (2d
Cir. 2012). However, the FAA “establishes that, as a matter of federal law, any doubts
concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Mitsubishi
Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 626 (1985).
“Questions of arbitrability are generally reserved for judicial determination, including
‘whether the parties are bound by a given arbitration clause,’ or ‘whether an arbitration clause in
a concededly binding contract applies to a particular type of controversy.’” Mumin v. Uber
Techs., Inc., 239 F. Supp. 3d 507, 521 (E.D.N.Y. 2017) (quoting Howsam v. Dean Witter
Reynolds, Inc., 537 U.S. 79, 83–84 (2002)).
II. Should Arbitration be Compelled Here? Yes.
There is no dispute that the present motion to arbitrate is governed by the FAA. As such,
in determining “whether claims are subject to arbitration, a court must consider (1) whether the
parties have entered into a valid agreement to arbitrate, and, if so, (2) whether the dispute at issue
comes within the scope of the arbitration agreement.” In re Am. Exp. Fin. Advisors Sec. Litig.,
672 F.3d 113, 128 (2d Cir. 2011); Scott v. JPMorgan Chase & Co., 603 Fed. App’x. 33, 35 (2d
Cir. 2015). The Court considers these elements in reverse order.
A. Scope of the Arbitration Agreement
Plaintiffs assert the following causes of action: (1) failure to pay overtime wages under
the FLSA; (2) failure to pay overtime wages under NYLL; (3) violation of the notice and
recordkeeping requirements of NYLL §195(1); and (4) violation of the wage statements
requirements of NYLL §195(3). (See ECF No. 1, ¶¶ 74–90.)
Under the executed Arbitration Agreement, “Employee agrees to arbitrate, and thereby
agrees to waive any right to a trial by jury . . . claims arising under . . . the Fair Labor Standards
Act . . . [and] New York Labor Law[.]” (ECF No 24-1.) Thus, the dispute at issue comes within
the scope of the Arbitration Agreement. See Toure v. Thunder Lube Inc., No. 17CV0657DLIJO,
2019 WL 4805197, at *3 (E.D.N.Y. Sept. 30, 2019) (“Plaintiff’s FLSA and NYLL causes of
action are arbitrable.”). Indeed, Plaintiff’s counsel does not dispute the scope of the Arbitration
Agreement; her argument focuses on unconscionability instead. (See FTR log for Hearing held
07/08/2026.)
B. Validity of the Agreement to Arbitrate
Although Plaintiffs’ claims fall within the scope of the Arbitration Agreement, Plaintiffs
contend that “the arbitration agreements for Mr. Edilson and Mr. Ramirez are unconscionable as
the provisions of the contract, specifically the [six-month] statute of limitations (and [thirty-day]
waiver) for any claims against Defendants in addition to the fee shifting provision are so
outrageous and contrary to the meaning and intent of both the Fair Labor Standards Act and New
York Labor Law.” (ECF No. 25 at 4.) With respect to the statutes of limitation, Plaintiffs take
issue that the agreements “seek to shorten Mr. Edilson’s and Mr. Ramirez’s FLSA claims from
three years (for willful conduct of Defendants) to a mere six months[]” while also reducing “the
six-year [NYLL] statute of limitations period to a mere six-months.” (Id. at 5–6.) With respect to
fee-shifting, Plaintiffs highlight a provision that “if the employer initiates an Arbitration or
asserts counterclaims against the Employee, the Employee shall be responsible for one-half of all
Arbitration costs and fees associated with Employer’s claims or counterclaims.” (Id. at 9.) In
Plaintiffs’ estimation, this provision “preclude[s] Plaintiffs from vindicating their statutory rights
as they shift a significant financial burden on Plaintiffs in the event that Defendants decide to
simply bring, rather than prevail, a counterclaim against them when pursuing their protected
wage-and-hour claims.” (Id.)1
i. Unconscionability Should Be Resolved
by the Arbitrator, Not the Court
“[T]he general presumption is that the issue of arbitrability should be resolved by the
courts”; however, courts must inquire “whether the parties agreed to submit the question of
arbitrability itself to arbitration.” All. Bernstein Inv. Rsch. & Mgmt., Inc. v. Schaffran, 445 F.3d
121, 125 (2d Cir. 2006). The FAA requires that “[w]hen the parties’ contract delegates the
arbitrability question to an arbitrator, the courts must respect the parties’ decision as embodied in
the contract.” Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. 63, 65 (2019). The
Second Circuit has held that when “parties explicitly incorporate rules that empower an arbitrator
to decide issues of arbitrability, the incorporation serves as clear and unmistakable evidence of
the parties’ intent to delegate such issues to an arbitrator.” Contec Corp. v. Remote Sol., Co., 398
1 With respect to Plaintiff Cornel, Plaintiffs raise an additional, independent reason why the arbitration
agreement should not bind him: he never signed it. That argument is addressed in a separate section
below.
F.3d 205, 208 (2d Cir. 2005). The basis of a plaintiff’s challenge must “be directed specifically
to the agreement to arbitrate[, as opposed to the contract as a whole,] before the court will
intervene.” Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 71 (2010).
Here, the parties themselves agreed to submit the question of arbitrability to the
Arbitrator. The Arbitration Agreement provides that “any controversy, claim, or dispute that
Employee has arising out of or relating to Employee’s employment and/or separation of
employment shall be adjudicated exclusively by” arbitration, to be “administered” and
“conduct[ed]” according to “ADR’s Commercial Arbitration Rules[.]” (ECF No. 24-1.) Section
6.1 of ADR Systems’ Commercial Arbitration Rules states that “[t]he arbitrator shall have the
power to rule on his or her own jurisdiction, including any objections with respect to the
existence, validity or scope of the arbitration agreement.” ADR SYSTEMS, ADR SYSTEMS
COMMERCIAL ARBITRATION RULES 11 (Effective January 25, 2023),
https://www.adrsystems.com/wp-content/uploads/2023/01/Commercial-Arbitration-Rules.pdf.
Further, Section 6.2 states:
The arbitrator shall have the power to determine the existence or validity of a
contract of which an arbitration clause forms a part. Such an arbitration clause
shall be treated as an agreement independent of the other terms of the contract. A
decision by the arbitrator that the contract is null and void shall not for that reason
alone render the arbitration clause invalid.
Id.
Accordingly, because the Arbitration Agreement incorporates by reference the ADR
Commercial Arbitration Rules, the validity and enforceability of the Agreement is to be
determined by an arbitrator.
The Supreme Court addressed this precise issue in Rent-A-Center, 561 U.S. 63. There, as
here, the employee-plaintiff argued that the arbitration agreement was unconscionable and
therefore unenforceable. Id. at 66. Also like here, the arbitration agreement included a provision
that “[t]he Arbitrator . . . shall have exclusive authority to resolve any dispute relating to the . . .
enforceability . . . of this Agreement including, but not limited to any claim that all or any part of
this Agreement is void or voidable.” Id. at 68. The parties and the Court referred to this as the
“delegation provision.” Id. The plaintiff did not level any challenges at the delegation provision
in particular (e.g., arguing that that particular provision was illegal or fraudulently induced). Id.
at 72–73. Rather, he took issue with the arbitration agreement as a whole, as well as certain other
provisions thereof (e.g., that it was one-sided in the employer’s benefit in certain respects). As
Justice Scalia noted, “[t]his one-sided-coverage argument clearly did not go to the validity of the
delegation provision.” Id. at 73. Absent “any arguments specific to the delegation provision[,]”
id. at 74, the Court found that provision valid, and therefore held that any questions of
unconscionability as to the rest of the agreement must be decided by the arbitrator, not by the
courts, id. at 75. So too here. See, e.g., Faith v. Khosrowshahi, No. 21-CV-06913 (JMA) (JMW),
2023 WL 5278126, at *8 (E.D.N.Y. Aug. 16, 2023) (finding delegation clause enforceable and
therefore compelling arbitration as to other disputes regarding arbitrability).
ii. In the Event the District Judge Concludes that it is the Court, Not the
Arbitrator, that Determines Whether the Arbitration Agreement is
Unconscionable, the Two Distinct Issues May Be Severed
Should the District Judge conclude that the Court, not an arbitrator, determines whether
the Arbitration Agreement is unconscionable or not, then the remedy is to sever those two
clauses, namely, the statute of limitations and fee-shifting provisions.
Defendants “do not seek to shorten the FLSA statute of limitations” (ECF No. 27 at 3), as
the statute of limitations reduction in the Arbitration Agreement stands “unless prohibited by law
and/or statute” (id., n.2). That is, Defendants concede that a provision purporting to shorten a
statute of limitations under the FLSA is indeed unenforceable. (ECF No. 23 at 11.) Rather,
Defendants only contend that the Arbitration Agreement’s shortened statute of limitations is
enforceable as to NYLL claims. (ECF No. 27 at 4.)2
Thus, Plaintiffs’ surviving arguments regarding the unconscionability of the Arbitration
Agreement extend to (1) the reduction of the NYLL’s statute of limitations to six months and (2)
the contract’s fee-shifting provision.
Plaintiffs concede that unconscionability “ordinarily” requires a showing of both
procedural and substantive unconscionability (ECF No. 25 at 2); however, they rely on the
assertion that the instant facts rise to the level of the “exceptional cases where a provision of the
contract is so outrageous as to warrant holding it unenforceable on the ground of substantive
unconscionability alone.” (Id. (quoting Gillman v. Chase Manhattan Bank, N.A., 534 N.E.2d 824
(N.Y. 1988).)
Plaintiffs do not cite a single case that has held a shortened statute of limitations for
NYLL claims to be unenforceable (see ECF No. 25 at 6). Indeed, several cases considering the
issue thus far have in fact held that such a shortening for NYLL claims is enforceable. See, e.g.,
Keller v. About, Inc., No. 21-CV-228 (JMF), 2021 WL 1783522, at *3 (S.D.N.Y. May 5, 2021)
(noting that “[m]any courts have upheld six-month limitations periods” for claims brought under
“New York statutes” including, inter alia, New York Labor Law). When asked at oral argument,
Plaintiffs’ counsel conceded she was not aware of any court that found a shortened limitations
period for NYLL claims unenforceable. This Court declines to recommend that it be the first.
As for the fee-shifting, Plaintiffs argue that these provisions “preclude Plaintiffs from
vindicating their statutory rights” because they could “shift a significant financial burden on
Plaintiffs” in certain circumstances. (ECF No. 25 at 9.) Again, however, Plaintiffs cite no case
2 Plaintiffs also take issue with a waiver provision. (ECF No. 25 at 8.) However, Defendants have agreed
to waive this provision, (ECF No. 27 at 3 n.3), rendering this issue moot.
holding that such a provision is unenforceable. (See id.) Moreover, the fee-shifting provision
applies only to actions initiated by the employer, so it is a “red herring” raised in the context of
the instant wage claim brought by the employees. (ECF No. 27 at 6–7).
More fundamentally, even if certain portions of the Arbitration Agreement were
unconscionable, Plaintiffs have not explained how those provisions would render the entire
Agreement void. In Castellanos v. Raymours Furniture Co., Inc., relied on by Plaintiffs, the
court did not find the arbitration agreement unenforceable due to the illicit limitations provision;
instead, the court simply severed that provision. 291 F. Supp. 3d 294, 301 (E.D.N.Y. 2018)
(compelling arbitration). The same is true of the Arbitration Agreement’s purported alteration to
the FLSA and NYLL’s cost-sharing provisions—even if unenforceable, it is severable. See
Crespo v. Kapnisis, No. 21-CV-6963 (BMC), 2022 WL 2916033, at *6 (E.D.N.Y. July 25, 2022)
(compelling arbitration).
Indeed, the Arbitration Agreement itself contemplates this exact solution, through an
express severability clause:
If any term or provision of this Agreement is declared illegal or unenforceable,
such term or provision shall be reasonably modified by the Arbitrator to be
enforceable. If not possible, said provision or term shall be null and void, but
leaving the remainder of the Agreement in full force and effect.
(ECF No. 24-1 at 2.) The Agreement directly responds to Plaintiffs’ unenforceability argument
while providing further support of the parties’ intent that an Arbitrator oversee all aspects of the
Agreement. Thus, even if the limitations-shortening and fee-shifting provisions are held
unconscionable, the remedy is to sever those provisions.
iii. The Arbitration Agreement Applies to
Cornel Even Though There Is No Record of His Signature
Regarding the enforceability of the Arbitration Agreement, or lack thereof, as to Cornel,
Defendants assert that although “Cornel did not sign the arbitration agreement” he is “bound by
it” because he “continued to work after receiving [the arbitration agreement].” (ECF No. 23 at 7.)
Plaintiffs disagree, averring that “self-serving affidavits[] indicating that Mr. Cornel received the
arbitration agreement[]” are not sufficient evidence “to establish whether Mr. Cornel and
Defendants had an agreement to arbitrate.” (ECF No. 25 at 10.) In response, Defendants note that
“Cornel has not submitted a declaration disputing Michael Dolan’s declaration stating that
Cornel received an arbitration agreement. Cornel’s denial of receiving the arbitration agreement,
through a memorandum of law, is not admissible evidence.” (ECF No. 27 at 8.)
Plaintiffs’ contention that “self-serving affidavits” do not count as “evidence” is
incorrect. In fact, the very case Plaintiffs rely upon emphasizes that “[i]n reviewing motions to
compel arbitration, just as for motions for summary judgment, a court must consider all relevant,
admissible evidence submitted by the parties and contained in pleadings, depositions, answers to
interrogatories, and admissions on file, together with affidavits.” Barrows v. Brinker Rest. Corp.,
36 F.4th 45, 50 (2d Cir. 2022) (emphases in original; internal citation omitted). This is true even
where the affidavits are supposedly “self-serving.” Id. at 51.
“Courts applying New York law have consistently required that an agreement to arbitrate
be in writing but not necessarily be signed by the party to be bound.” Ugboaja v. Perry Ave.
Fam. Med., Inc., No. 25 CIV. 78 (PAE) (OTW), 2026 WL 836190, at *6 (S.D.N.Y. Mar. 26,
2026) (citation modified; internal citation omitted). Plaintiffs and Defendants agree that it is a
settled legal principle that “an employee can manifest assent to an arbitration agreement by
continuing to work after being made aware of the agreement, without actually signing[.]” (ECF
No. 25 at 10.) See Manigault v. Macy's E., LLC, 318 F. App'x 6, 8 (2d Cir. 2009) (“continued
employment, without more, is sufficient to manifest assent [to arbitration agreement]”). Because
Plaintiffs submit no evidence to controvert Defendants’ affidavit that Cornel was presented with
the Arbitration Agreement, Cornel’s continued employment constitutes a manifestation of assent
to its terms.
At bottom, Cornel manifested his assent to the Arbitration Agreement, and the other two
Plaintiffs signed it. Plaintiffs submit no compelling authority that any provision of the
Agreement is unconscionable, but even if they did, the offending provision could simply be
severed. Nor have Plaintiffs explained why an arbitrator should be any less qualified to make that
determination than the Court. The undersigned therefore respectfully recommends Judge
Choudhury grant Defendants’ motion to compel arbitration.
Notwithstanding this recommendation that the entire matter ought to be stayed here and
compelled to arbitration, the Court nevertheless considers Defendants’ motion to dismiss as well,
in the event Judge Choudhury disagrees with the analysis set forth above.
II
MOTION TO DISMISS IN PART
I. Legal Standard Under Rule 12(B)(6)
To survive a motion to dismiss under Rule 12(b)(6), a complaint must plead “enough
facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007). A claim is facially plausible “when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint is properly dismissed where,
as a matter of law, “the allegations in a complaint, however true, could not raise a claim of
entitlement to relief.” Twombly, 550 U.S. at 558.
“[T]he pleading standard Rule 8 announces . . . demands more than an unadorned, the-
defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550
U.S. at 555). A claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.
“The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a
sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556-
57 (internal citations omitted)).
When considering a motion to dismiss, the Court assumes all well-pleaded facts to be
true, “drawing all reasonable inferences in favor of the plaintiff.” Koch v. Christie's Int'l PLC,
699 F.3d 141, 145 (2d Cir. 2012). However, this tenet does not apply to legal conclusions or
“threadbare recitals of a cause of action's elements.” Iqbal, 556 U.S. at 663. Pleadings that offer
only “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will
not do.” Twombly, 550 U.S. at 555. More is required.
II. The Motion to Dismiss Should be Granted in Part
If the undersigned’s recommendation that this matter must be arbitrated is adopted, then
Defendants’ motion to dismiss is moot. If, however, the District Judge disagrees with that
recommendation and denies Defendants’ motion to compel arbitration, then Defendants
alternatively move to dismiss (i) all of Cornel’s claims and (ii) Edilson and Ramirez’s NYLL
claims. The Court takes each argument in turn.
A. Claims Brought by Cornel
i. Cornel’s FLSA Claims
Defendants assert that Cornel’s claims must be dismissed because his FLSA claim is
outside the two (or, if willfully violated, three) year statute of limitations. (ECF No. 23 at 10.) 29
U.S.C. § 255(a).
This action was filed February 23, 2026. (ECF No. 1.) Thus, any viable FLSA claim
asserted by Plaintiffs must have occurred no earlier than February 2023. Cornel was employed
by Defendants from August 2018 through January 2023. (ECF No. 1 at 2.) Cornel’s employment
was terminated on January 17, 2023; he accepted a severance package from Defendants on
January 26, 2023. (ECF No. 24-3.)
Any FLSA violation Cornel could allege is clearly outside the relevant statutory period;
accordingly, his FLSA claim is time barred. See Babayoff v. Pro Coverage Grp., Inc., No. 20-
CV-4538 (WFK) (PK), 2024 WL 5284000, at *3 (E.D.N.Y. Dec. 12, 2024) (granting summary
judgment for defendants where the plaintiff’s last payday was October 6, 2017 but he did not
commence action under FLSA until October 16, 2020).
Aside from being fatally time-barred, Defendants maintain that Cornel’s FLSA is in any
event waived because Plaintiffs failed to respond to this argument in their opposition papers.
(ECF No. 27 at 9.) “As a general matter, district courts frequently deem claims abandoned when
counseled plaintiffs fail to provide arguments in opposition at the motion to dismiss stage.”
Colbert v. Rio Tinto PLC, 824 F. App’x 5, 11 (2d Cir. 2020) (summary order). Thus, by failing
to address Defendants’ argument that Cornel’s FSLA claim is time-barred, Plaintiffs have
waived Cornel’s FLSA claim. See Campbell v. Whole Foods Mkt. Grp., 516 F. Supp. 3d 370,
393 (S.D.N.Y. 2021) (“Plaintiff has abandoned this claim by failing to brief the issue in response
to Defendant's motion to dismiss.”) (citing Johnson v. City of New York, No. 1:15-cv-8195
(GHW), 2017 WL 2312924, at *17 (S.D.N.Y. May 26, 2017) and Romeo & Juliette Laser Hair
Removal, Inc. v. Assara I LLC, No. 08-cv-442 (TPG)(FM), 2014 WL 4723299, at *7 (S.D.N.Y.
Sept. 23, 2014)).
ii. Cornel’s NYLL Claims
Defendants argue Cornel’s NYLL claims must be dismissed as well because “Cornel
accepted severance pay in exchange for him providing a general release of all claims” upon his
termination from With Pride. (ECF No. 23 at 10.) Plaintiffs respond that “Defendants have failed
to establish that the severance agreement is valid and enforceable” because Defendants did not
provide Mr. Cornel a settlement agreement composed in Spanish, his primary language, which
impacted Mr. Cornel’s understanding of the claims release and the accompanying payment.
(ECF No. 25 at 13.)
“New York courts have repeatedly ruled that even the fact that a prospective employee
possesses an imperfect grasp of the English language will not relieve the employee of making a
reasonable effort to have the document explained to him.” Ragone v. Atl. Video at Manhattan
Ctr., 595 F.3d 115, 122 (2d Cir. 2010). Thus, contrary to Plaintiffs’ argument, the fact that the
Agreement was not provided to Cornel in his native tongue does not render the Agreement
unenforceable. Rodriguez Depena v. Parts Auth. Inc., 877 F.3d 122, 124 (2d Cir.
2017) (compelling arbitration of FLSA claims, because “a language barrier does not prevent
enforcement of contract obligations”).
Plaintiffs also take issue with the fact that the release agreement purports to release
claims without court review, making an illicit end-run around the Second Circuit’s decision in
Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015). (ECF No. 25 at 13.) But
Cheeks review is not required for claims brought solely under NYLL. 3 See Abrar v. 7-Eleven,
Inc., No. 14CV6315ADSAKT, 2016 WL 1465360, at *1 (E.D.N.Y. Apr. 14, 2016) (Spatt, J.)
(approving of a “bifurcated settlement structure” whereby the parties publicly filed their FLSA
settlement agreement for Cheeks review, and executed a separate, confidential settlement
agreement for non-FLSA claims under the NYLL). To the extent Plaintiffs mean that the release
3 In the event Cornel’s NYLL claim survives, Defendants urge the court not to exercise supplemental
jurisdiction over Cornel’s state claim. (ECF No. 23 at 10.)
is unenforceable with respect to Cornel’s FLSA claims, they are missing the point; Cornel’s
FLSA claims are unenforceable regardless due to the statute of limitations, as discussed above.
Accordingly, Cornel’s claims should be dismissed.
B. NYLL Claims Brought by Edilson and Ramirez
Defendants argue that all Plaintiffs’ NYLL claims are untimely because the Arbitration
Agreement shortened the statute of limitations to six months, and Plaintiffs’ commencement of
the instant action occurred more than six months after the respective employment of each
Plaintiff concluded. (ECF No. 23 at 10–11.) In opposition, Plaintiffs reiterate their earlier
position, namely, “Plaintiffs’ NYLL claims are not time barred as the six-month statute of
limitations period in the arbitration agreements are unenforceable.” (ECF No. 25 at 12.)
Defendants’ position here is circular. Defendants only move to dismiss in the alternative,
“in the unlikely event” that the Court finds that Plaintiffs are not required to arbitrate their
claims. (ECF No. 23 at 10.) The only reason the Arbitration Agreement would be unenforceable
as to Edilson and Ramirez is if it is unconscionable. (See generally ECF No. 25 at 2–9 (raising
no arguments as to Edilson and Ramirez other than unconscionability).) And if it is found
unconscionable, it would only be on account of the limitations and fee-shifting provisions. (See
id.) Defendants’ argument that Edilson and Ramirez’s NYLL claims are time barred because the
Arbitration Agreement says so ignores that the argument is only assuming that the Arbitration
Agreement’s limitations-shortening provision is invalid.
Accordingly, if it is within the Court’s domain to decide the validity of the contract and
it is determined that the statute of limitations-shortening and fee-shifting provisions are
unconscionable and render the entire contract void, then Plaintiffs’ NYLL claims at this pleading
stage should be sustained. Plaintiffs brought the instant action in a timely manner. The claims
date from February 23, 2020, and the action was filed February 23, 2026, satisfying NYLL’s six-
year statute of limitations.
III
MOTION FOR SANCTIONS UNDER RULE 11
Fed. R. Civ. P. 11 in relevant part states:
By presenting to the court a pleading, written motion, or other paper ... an attorney
or unrepresented party certifies that to the best of the person's knowledge,
information, and belief, formed after an inquiry reasonable under the
circumstances: (1) it is not being presented for any improper purpose, such as to
harass or to cause unnecessary delay or needlessly increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions therein are warranted by
existing law or by a nonfrivolous argument for the extension, modification, or
reversing of existing law or for establishing new law; (3) the factual contentions
have evidentiary support or, if specifically so identified, will likely have evidentiary
support after a reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if
specifically so identified, are reasonably based on belief or a lack of information or
belief.
Fed. R. Civ. P. 11(b).
Procedure in these circumstances is of most importance. Rule 11 requires notice and an
opportunity to be heard by the party that has allegedly violated this rule. See Fed. R. Civ. P.
11(c) (“If, after notice and a reasonable opportunity to respond, the court determines that Rule
11(b) has been violated, the court may impose an appropriate sanction on any attorney, law firm,
or party that violated the rule or is responsible for the violation.”) This “notice and a reasonable
opportunity to respond” provision is also known as the safe-harbor rule. See Star Mark Mgmt.,
Inc. v. Koon Chun Hing Kee Soy & Sauce Factory, Ltd., 682 F.3d 170, 175 (2d Cir. 2012). If the
alleged misconduct is corrected within 21 days of receiving a motion for sanctions, the motion
should not be filed. See Fed. R. Civ. P. 11(c)(2). Here, the Court finds that Defendants followed
proper procedure by providing Plaintiffs with a safe-harbor letter included with an attachment of
this motion for sanctions (ECF No. 21 at 3), which is not disputed by Plaintiff. Next, the
undersigned reviews if sanctions are warranted.
“The implementation of Rule 11 requires a careful balancing of two interests of the court:
reprimanding egregious behavior and avoiding restraint of creative legal arguing.” Charles
Equip. Energy Sys., LLC v. INNIO Waukesha Gas Engines, Inc., No. 22 CIV. 2716 (CM), 2023
WL 2346337, at *2 (S.D.N.Y. Mar. 3, 2023). “An argument constitutes a frivolous legal position
for the purposes of Rule 11 sanctions if, under the objective standard of reasonableness, it is
clear that there is no chance of success and no reasonable argument to extend, modify, or reverse
the law as it stands.” Morley v. Ciba–Geigy Corp., 66 F.3d 21, 25 (2d. Cir. 1995) (citation
modified; internal citation omitted).
The decision whether to impose sanctions under Rule 11 rests firmly within the discretion
of the trial court. See Perez v. Posse Comitatus, 373 F.3d 321, 325 (2d Cir. 2004); Guthrie v.
Rainbow Fencing Inc., 349 F.R.D. 55, 72 (E.D.N.Y. 2025) (same). “Simply maintaining a claim
that does not survive a motion to dismiss is not in and of itself frivolous. The appropriateness of
sanctions is distinct from the underlying merits of a claim.” Bank v. CreditGuard of Am., Inc.,
No. 18-CV-1311 (PKC) (RLM), 2020 WL 1516107, at *3 (E.D.N.Y. Mar. 30, 2020) (internal
citations and quotation marks omitted) (denying Rule 11 sanctions).
Defendants move for sanctions against Plaintiffs and their counsel. (ECF No. 34.)
Defendants argue that sanctions are warranted because Plaintiffs pressed forward with the instant
litigation despite being provided with documentary evidence proving Plaintiffs’ claims are
subject to arbitration, with several causes of actions being either time barred or released. (ECF
No. 35 at 1.) Defendants further note that Plaintiffs refused to withdraw the Complaint even after
Defendants notified Plaintiffs of the Complaint’s purported deficiencies through a Rule 11 safe-
harbor notice. (See generally id.)
In response, Plaintiffs reiterate arguments used in their opposition to Defendants’ motion
to compel or dismiss. (Compare ECF No. 25, with ECF No. 37.) Plaintiffs aver that they
meaningfully engaged with Defendants’ safe-harbor notice, but “maintain their position based on
legitimate legal grounds.” (ECF No. 37 at 12.)
Preliminarily, monetary sanctions cannot be imposed “against a represented party for
violating Rule 11(b)(2).” Fed. R. Civ. P. 11(c)(5)(A). Sanctions here, if any, would be
appropriate only under Rule 11(b)(2), which involves legal contentions, as opposed to subsection
(b)(1), which forbids litigation for an improper purpose such as to harass, or (c)(3), which
involves factual contentions. That is to say, if Plaintiffs or their counsel violated Rule 11 in any
way, it is not because they brought this action to harass or because they lied about factual
matters, but rather because they assert indefensible legal contentions. Accordingly, Rule
11(c)(5)(A) directs that sanctions cannot be directed against Plaintiffs themselves. See, e.g.,
Moyle v. United Parcels Serv., Inc., No. 24-CV-3874 (CBA) (CHK), 2026 WL 1072022, at *5
(E.D.N.Y. Feb. 18, 2026) (“Plaintiff himself may not be sanctioned because he is represented by
counsel and no monetary sanction may be imposed ‘against a represented party for violating
Rule 11(b)(2).’”) (quoting Fed. R. Civ. P. 11(c)(5)(A), report and recommendation adopted sub
nom. Moyle v. United Parcel Serv., Inc., No. 1:24-CV-3874 (CBA) (CHK), 2026 WL 775911
(E.D.N.Y. Mar. 19, 2026)). Sanctions in this case, if any, can be directed only against counsel.
To be sure, at least some of Plaintiffs’ arguments are considered colorable. For example,
although the Court concluded that Cornel is bound by the Arbitration Agreement even though
there is no record that he signed it, there certainly exists some colorable basis to argue otherwise.
Other positions taken, however, are not so clear: for example, the purported unconscionability of
certain provisions of the Arbitration Agreement rendering the entire agreement unenforceable.
Plaintiffs do not explain why the illicit provisions cannot be severed. This is particularly
troubling because, as Defendants note (ECF No. 39 at 7–8), the Court already addressed that
exact point. In Plaintiffs’ brief in opposition to Defendants’ motion to compel arbitration,
bundle-filed on May 5, 2026, Plaintiffs cited Castellanos for the proposition that “arbitration
provisions shortening the limitations period to bring FLSA claims are unenforceable.” (ECF No.
25 at 4.) In the Court’s order on Defendants’ motion to stay, issued on May 19, 2026, the Court
noted that Castellanos itself stands for the proposition that such provisions, even if
unenforceable, are severable. See Edilson v. With Pride Air Conditioning & Heating Inc., No.
2:26-CV-01032 (NJC) (JMW), 2026 WL 1398631, at *3 (E.D.N.Y. May 19, 2026).
Nevertheless, in opposition Plaintiffs continue to rely on Castellanos. (ECF No. 37 at 7.) To be
sure, Plaintiffs are free to disagree with this Court’s reading of Castellanos; they could also
disagree with Castellanos itself, arguing that it was poorly reasoned or a minority position.
Nevertheless, “even where a court determines that Rule 11(b) has been violated, the
decision whether to impose sanctions is not mandatory, but rather is a matter for the court’s
discretion.” Optimus Commc’ns v. MPG Assocs., Inc., 841 F. Supp. 2d 722, 726 (E.D.N.Y. 2012)
(Spatt, J.) (citing Fed. R. Civ. P. 11(c)(1)). In Optimus, like here, the plaintiffs opposed a motion
to compel arbitration based on “objectively unreasonable” legal contentions. Id. Yet Judge Spatt
declined to impose sanctions, reasoning that
[t]he mere existence of an arbitration clause in a contract will not necessarily
preclude an action at law, but requires the Court to engage in a two-step analysis
to determine first, if there exists a valid contract to arbitrate, and second, whether
the claims alleged fall within the scope of the arbitration clause. As this analysis
may sometimes result in a conclusion that the arbitration clause is not applicable,
the Court does not find that the Plaintiff’s arguments—although ultimately
determined to be without merit—rise to the level of sanctionable conduct.
Id. at 726–27 (citation modified). The Court finds the reasoning in Optimus persuasive, and
accordingly declines to recommend the imposition of sanctions on Plaintiffs’ counsel.
Moreover, the Court notes that the Arbitration Agreement itself empowers the arbitrator
to impose sanctions as necessary. Specifically, it provides that “the arbitrator shall have the
power to award any remedies, including attorneys’ fees and costs, available under applicable
law.” (ECF No. 24-1 at 2; see also id. at 3 (providing for “damages, costs, expenses and
attorneys’ fees” in the event a party institutes legal action instead of arbitration).) That
language—“available under applicable law”—encompasses Defendants’ present motion for Rule
11 sanctions. There is therefore no reason for the Court to decide the issue, it is better left to the
Arbitrator. Indeed, for the Court to decide that the Complaint is frivolous under Rule 11 would
be to abrogate the very power the Court has concluded belongs to the Arbitrator—namely the
power to evaluate whether the Complaint states a claim.
CONCLUSION
For the reasons set forth above, the undersigned respectfully recommends that
Defendants’ motion to compel arbitration (ECF No. 22) be granted. Alternatively, the
undersigned recommends that Defendants’ motion to dismiss (ECF No. 22) be granted in part
and denied in part. Finally, the undersigned recommends that Defendants’ motion for sanctions
under Rule 11 (ECF No. 34) be denied.
OBJECTIONS
A copy of this Report and Recommendation is being electronically served on counsel.
Any written objections to this Report and Recommendation must be filed with the Clerk of the
Court within fourteen (14) days of service of this Report. 28 U.S.C. § 636(b)(1) (2006 & Supp.
2011); Fed. R. Civ. P. 6(a), 72(b). Any requests for an extension of time for filing objections
must be directed to the district judge assigned to this action prior to the expiration of the fourteen
(14) day period for filing objections. Failure to file objections within fourteen (14) days will
preclude further review of this Report and Recommendation either by the District Court or the
Court of Appeals. Thomas v. Arn, 474 U.S. 140, 145 (1985) ("a party shall file objections with
the district court or else waive right to appeal"); Caidor v. Onondaga Cnty., 517 F.3d 601, 604
(2d Cir. 2008) ("failure to object timely to a magistrate's report operates as a waiver of any
further judicial review of the magistrate's decision"); see Monroe v. Hyundai of Manhattan &
Westchester, 372 F. App'x 147, 147-48 (2d Cir. 2010) (summary order) (same).
Dated: Central Islip, New York
July 9, 2026
S O O R D E R E D:
James M. Wicks
-/S/----------------
JAMES M. WICKS
United States Magistrate Judge