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Arbitration Agreement Can Prevent Joint Claim

Dana Durham

Arbitration Agreement Can Prevent Joint Claim
GaudiLab via Getty Images

On August 5, 2022, a New York federal court decided two individuals who allegedly were discriminated against in the same company cannot join their claims if one has an enforceable arbitration agreement. Saleh v. Digital Realty Trust, Inc., 21 CIV. 9005 (PAE), 2022 WL 3139733 (S.D.N.Y. Aug. 5, 2022).

Plaintiffs Saleh and Henriquez asserted racial discrimination claims against their employer, Digital Realty. The factual basis for Saleh and Henriquez’s claims were similar, but the alleged discrimination occurred individually. Saleh filed suit and later added Henriquez as a co-plaintiff to the claim. After a court-mandated mediation failed, Digital Realty filed a motion to sever the claims and compel arbitration of Henriquez’s claim. The defense argued that Henriquez’s claim should be arbitrated but did not request the same relief for Saleh’s claim.

Digital Realty uses a third-party service, ServiceNow, to get its employees to annually attest to a dispute resolution agreement (DRA) which includes an arbitration clause. Every employee is given a unique serial number and can access the necessary documents only after logging in with his or her credentials. Henriquez agreed that private arbitration would be appropriate if he signed the DRA but asserted that he did not consent to arbitration because he never read or agreed to be bound by the DRA. Henriquez also argued that he never signed or consented to the DRA, but Digital Realty had evidence to show that his unique serial number and login credentials were used to click the required buttons and affirm his agreement to the DRA.

Digital Realty provided screenshots of what Henriquez’s screen looked like when he completed the agreement. Additionally, there are timestamped records of when Henriquez completed the DRA. Henriquez tried to discredit this evidence by arguing that Digital Realty had altered the screenshots, but the court did not find that his arguments had any merit.

Saleh and Henriquez argued that because both their discrimination claims were directed at employees of Digital Realty, their claims should be heard together. The court held that although the discrimination experiences occurred within the Digital Realty company, because the alleged discrimination happened at separate facilities, was inflicted by different individuals, occurred during different periods of time, and one of the plaintiffs had a valid arbitration clause while the other did not, there was no basis for the claims to be joined.

Both plaintiffs will have the opportunity to pursue a racial discrimination claim against Digital Realty, but each will have to pursue his own path.