Arbitrator to Decide Proper Forum for Ex-Trump Campaign Staffer's Claim, US Judge Rules
U.S. District Judge Jesse Furman broke gently with a state court judge handling the underlying harassment case brought by a former Trump campaign staffer who is fighting an attempt by the campaign to force arbitration.
August 30, 2018 at 06:51 PM
4 minute read
An arbitrator should have the first stab at deciding over the validity of an arbitration agreement, U.S. District Judge Jesse Furman of the Southern District of New York ruled Thursday in an action brought by a former employee of President Donald Trump's 2016 campaign who fought an attempt to have her harassment claims in state court sent to arbitration.
But Furman's decision appears to run counter to a recent decision by the judge in the state case, New York County Supreme Court Justice Arlene Bluth, who ruled that Jessica Denson's state-law claims fell outside the scope of the arbitration clause.
Furman wrote his decision was in accordance with Bluth's, suggesting that each turned on different wording of the separate complaints filed in the respective courts. But the federal decision is certain to be presented as strong support for the appeal Trump's legal team plans to file at the state court level.
“We are pleased with Judge Furman's well-reasoned decision, which is consistent with firmly established precedent in this district,” LaRocca Hornik Rosen Greenberg & Blaha name attorney Lawrence Rosen said in an email. “When parties have contractually agreed to arbitrate their disputes, such as the case here with Ms. Denson and the campaign, the issue of arbitrability is for the arbitrator to decide, and not the court.”
Denson filed suit in Manhattan state court in November 2017, alleging a former supervisor slandered, harassed and sexually discriminated against her during her time working for the Trump campaign.
Shortly thereafter, Trump's legal team filed a demand for arbitration, citing the nondisclosure agreement Denson signed upon joining the campaign. Denson, the campaign said, had breached the nondisclosure and confidentiality agreement by releasing information as part of her state court claim.
In her federal suit filed in March, Denson—who proceeded pro se—quoted from the NDA, which she suggested focuses specifically on confidential information about Trump and his family. She sought to have the arbitration agreement declared unenforceable, which she said had been “weaponized” against her by the campaign.
In his opinion and order issued Thursday, Furman said the terms of the agreement signed by Denson demands that her very argument about the agreement's unenforceability must be determined by an arbitrator.
The language of the arbitration states that any dispute “arising under or relating to” the agreement was subjected to the rules for commercial arbitration set down by the American Arbitration Association. Those rules state that the arbitrator has the power to rule on issues of his or her own jurisdiction, including the validity of the agreement itself.
“It follows that the parties' dispute—including the threshold question of arbitrability itself—is for an arbitrator, not this court, to decide,” Furman wrote.
Furman went to lengths to cast his order as being consistent with Bluth's Aug. 7 decision at the state level, even as he specifically noted he was in no way bound by it. He quoted Bluth's critique of the language of the agreement failing to require any claims needing to be sent to arbitration, rather than any dispute under or related to the agreement.
“Instead, the clause is much narrower: it allows defendant to choose whether to arbitrate any dispute that arises out of the agreement,” Furman quoted Bluth writing. “The clause cannot be interpreted to apply to plaintiff's affirmative claims arising out of her employment.”
This, Furman noted, was not what Denson brought before the federal court.
“Instead, as noted, she raises a 'dispute that arises out of the agreement,' … namely, whether the agreement is enforceable,” Furman wrote, quoting again from Bluth's decision. “It follows that, even on the state-court's view of the arbitration clause, this dispute falls with the clause's scope.”
Furman went on to dismiss the case, as neither of the parties requested to stay the case pending arbitration. He also certified that any appeal would not be taken in good faith, denying Denson's in forma pauperis status.
Denson could not be immediately reached for comment.
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