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Plaintiffs, former insurance agents for defendants New York Life
Insurance Company and its related companies, brought a putative
class action seeking recovery for allegedly illegal wage deductions
and violations of overtime and minimum wage laws. The main issue on
appeal, and an issue of first impression for New York state courts,
was the validity of an arbitration provision in one plaintiff's
agent contract that waived any right to a jury trial and agreed
that no claim could be brought or maintained "on a class
action, collective action or representative action basis either in
court or arbitration." The court held that arbitration
provisions which prohibit class, collective, or representative
claims violate the National Labor Relations Act (NLRA) and are
therefore unenforceable. In addition, the Court agreed with the
Seventh Circuit's reasoning that arbitration provisions like
the one at issue here fail to meet the criteria of the FAA's
Saving Clause for nonenforcement because the provision is unlawful
under the NLRA. In holding that class waivers violated the NLRA,
the court aligned itself with the Seventh and Ninth Federal
Circuits and disagreed with the Second, Fifth, and Eighth Circuits.
The Court noted that the Supreme Court would soon address this
circuit split. Gold v. New York Life Ins. Co.,
Case No. 653923/12 (N.Y. App. Div. July 18, 2017).
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