August 31, 2017

Hermès Compels Arbitration in Discrimination Suit in 2nd Circuit

Connor Choate

In late August 2017, the Second Circuit held that Hermès of Paris, Inc. can compel arbitration in a former employee’s discrimination suit.

In November, 2015, Matthew Swain sued Lorenzo Bautista and Hermès in a New Jersey court, alleging he was fired from his post at an Hermès in a New Jersey mall because of his sexual orientation. Hermes filed a petition in the U.S. District Court for the Southern District of New York to compel arbitration, asserting federal jurisdiction based on diversity of citizenship. The District Court granted the petition, which Swain then appealed, arguing that the dispute lacked complete diversity because in the New Jersey state litigation, Swain named Bautista who also lived in New Jersey.

Swain argued the court needed to “look through the petition to the underlying suit.” The court disagreed, rejecting Swain’s argument that the Supreme Court decision in Vaden v. Discover Bank required the court “look through” the petition. Vaden simply did not address the jurisdiction question at hand. Instead, the court looked to Doctor’s Associates, Inc. v. Distajo, which held that in determining jurisdiction in an FAA petition, the court need only look to “the parties to the position to compel as well as any indispensible parties who must be joined pursuant to Federal Rule of Civil Procedure 19” (internal quotations omitted). Given that Swain and Hermès, indisputably of different states, were the parties to the petition to compel arbitration, the court rejected Swain’s “look-through” approach entirely, affirming the lower court’s decision.

Connor Choate

Austin Law Firm in Raleigh, North Carolina.