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`WILLIAM CHASTKA,
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`Plaintiff,
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`INTERNATIONAL BUSINESS
`MACHINES CORP.
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`Defendant.
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`Civil Action No. ___________
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`COMPLAINT
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`Plaintiff William Chastka worked for Defendant International Business
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`1.
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`Machines Corporation (hereinafter “IBM”). He has attempted to bring a claim against
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`IBM in arbitration for discrimination under the Age Discrimination in Employment Act
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`(“ADEA”), as amended, 29 U.S.C. § 621 et seq., in connection with the termination of
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`his employment. His claim was timely under the ADEA, pursuant to the single filing, or
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`“piggybacking”, rule that allows plaintiffs in discrimination cases to refer to earlier
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`classwide administrative charges of discrimination for statute of limitations purposes.
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`However, IBM has taken the position that its arbitration agreement does not allow for
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`the “piggybacking” rule and thus Plaintiff cannot pursue his claim under the ADEA. IBM
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`has also sought to enforce strictly a confidentiality clause in its arbitration agreement,
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`which undermines the ability of employees, such as Plaintiff here, from enforcing their
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`rights under anti-discrimination statutes.
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`1
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`Case 1:21-cv-06296 Document 1 Filed 07/23/21 Page 2 of 10
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`2.
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`Plaintiff thus seeks a declaration in this action that these provisions of
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`IBM’s arbitration agreement are unenforceable. This action is brought pursuant to the
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`federal Declaratory Judgment Act, 28 U.S.C. §§ 2201-02.
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`II.
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`PARTIES
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`3.
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`Plaintiff William Chastka resides in Arlington, Virginia. Plaintiff was
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`formerly employed by IBM and has attempted to bring a claim of age discrimination
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`against IBM under the ADEA.
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`4.
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`Defendant International Business Machines Corp. is a New York
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`corporation with its principal place of business in Armonk, New York. IBM is a
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`multinational technology company that offers services and goods ranging from
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`computing, cloud platforms, advanced analytics tools, and others.
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`III.
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`JURISDICTION AND VENUE
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`5.
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`This Court has general federal question jurisdiction over this matter
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`pursuant to 28 U.S.C. § 1331, because Plaintiff has brought a claim pursuant to the
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`Federal Declaratory Judgment Act, 28 U.S.C. §§ 2201-02. An actual controversy exists
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`between the parties within the meaning of 28 U.S.C. § 2202 that is of sufficient
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`immediacy and reality to warrant declaratory relief. This action concerns whether
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`Plaintiff may arbitrate a federal claim under the ADEA and whether certain provisions of
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`Defendant’s arbitration provision are enforceable. Jurisdiction is therefore proper under
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`28 U.S.C. § 1331.
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`6.
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`The Southern District of New York is the proper venue for this action
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`pursuant to 28 U.S.C. § 1391(b)(1) because IBM’s principal place of business is in
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`Armonk, New York.
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`2
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`Case 1:21-cv-06296 Document 1 Filed 07/23/21 Page 3 of 10
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`IV.
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`STATEMENT OF FACTS
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`7.
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`Plaintiff worked for IBM for approximately 15 years until his layoff in 2017
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`at the age of 65. He worked for IBM as a Sales Leader.
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`8.
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`Plaintiff contends that he fell victim to a years-long companywide
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`discriminatory scheme implemented by IBM’s top management to build a younger
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`workforce, by reducing its population of older workers in order to make room for the
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`hiring of younger workers.
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`9.
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`This discriminatory scheme is detailed in the Second Amended Complaint
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`in the matter of Rusis et al. v. International Business Machines Corp., C.A. No. 18-cv-
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`08434 (S.D.N.Y.) (Dkt. 179), a class and collective action pending in this district,
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`brought under the Age Discrimination in Employment Act (“ADEA”), as amended, 29
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`U.S.C. § 621 et seq. Briefly stated, in Rusis, the plaintiffs allege that IBM has pushed
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`out thousands of older workers over a several year period, while hiring younger workers
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`(which the company often refers to as “Early Professional Hires” or “New Collar”
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`workers), in order to better compete with newer technology companies, such as Google,
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`Facebook, Amazon, and others.
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`10.
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`Indeed, IBM has been investigated for age discrimination by the Equal
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`Employment Opportunity Commission (“EEOC”). Following a multi-year investigation,
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`on August 31, 2020, the EEOC issued a classwide determination in which it found
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`reasonable cause to believe that IBM discriminated against older employees during the
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`period 2013 to 2018. In its determination letter, the EEOC noted that it had uncovered
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`“top-down messaging from IBM’s highest ranks directing managers to engage in an
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`aggressive approach to significantly reduce the headcount of older workers to make
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`3
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`Case 1:21-cv-06296 Document 1 Filed 07/23/21 Page 4 of 10
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`room for Early Professional Hires.” The EEOC revealed that it had analyzed data from
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`across the company and that it was primarily older workers (more than 85%) who were
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`in the total potential pool of those employees considered for layoff. The EEOC stated in
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`its determination letter that its conclusion was supported by dozens of interviews it had
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`conducted across the company, as well as analysis of data, and it rejected IBM’s
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`attempt to justify and defend the layoffs of the 58 charging parties, whose claims had
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`been consolidated for investigation, through individualized explanations.
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`11. When it laid off employees, IBM avoided providing disclosures of the ages
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`of employees who had been laid off and those not laid off (and other related
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`information), as required by the Older Workers’ Benefits Protections Act (“OWBPA”), 29
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`U.S.C. § 626(f)(1)(H), by not including a waiver of ADEA claims in the release that it
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`asked the employees to sign. Instead, it offered the employees subject to layoff a very
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`modest severance payment in exchange for a waiver of almost all legal claims, other
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`than a claim under the ADEA. The agreement provided, however, that if the employee
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`chose to pursue a claim under the ADEA, it would need to be in individual arbitration.
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`12. Plaintiff signed this arbitration agreement and later proceeded to attempt
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`to pursue a claim of discrimination under the ADEA in arbitration.
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`13.
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`The arbitration agreement includes a provision that states: “To initiate
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`arbitration, you must submit a written demand for arbitration to the IBM Arbitration
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`Coordinator no later than the expiration of the statute of limitations (deadline for filing)
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`that the law prescribes for the claim that you are making or, if the claim is one which
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`must first be brought before a government agency, no later than the deadline for the
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`filing of such a claim. If the demand for arbitration is not timely submitted, the claim shall
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`4
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`Case 1:21-cv-06296 Document 1 Filed 07/23/21 Page 5 of 10
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`be deemed waived. The filing of a charge or complaint with a government agency or the
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`presentation of a concern through the IBM Open Door Program shall not substitute for
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`or extend the time for submitting a demand for arbitration.”
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`14.
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`The arbitration agreement also states: “Any issue concerning the validity
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`or enforceability of this Agreement . . . shall be decided only by a court of competent
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`jurisdiction.”
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`15. While Plaintiff argued to an arbitrator that, to the extent the provision
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`waives the “piggybacking” rule (as IBM argued), such a waiver is an improper waiver of
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`substantive rights and is thus unenforceable. However, the arbitrator determined that,
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`pursuant to the provision cited in paragraph 14 above, only a court could declare this
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`provision unenforceable.
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`16. Because the arbitration agreement delegates questions of validity or
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`enforceability of its terms to a court rather than an arbitrator, Plaintiff opted in to the
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`Rusis matter in order to challenge the enforceability of the provision described in
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`paragraph 13 above, which IBM has argued prevents Plaintiff from pursuing a claim of
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`discrimination under the ADEA.
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`17.
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`The Rusis court held, however, that it could not address the validity of this
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`provision, in that case, with respect to Plaintiff (and others who argued that the provision
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`is unenforceable) because IBM’s agreement prohibits the employees from joining a
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`class or collective action. The court made clear that any such challenge must be made
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`on an individual basis. (Rusis Dkt. 156 at pp. 8-15.) Plaintiff was thereafter dismissed
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`from the Rusis matter. (Rusis Dkt. 165.)
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`5
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`Case 1:21-cv-06296 Document 1 Filed 07/23/21 Page 6 of 10
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`18. Plaintiff therefore challenges here, in this individual action, the provision of
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`IBM’s arbitration agreement quoted in paragraph 13, as unenforceable.
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`19. Pursuant to the ADEA, individuals are required to file a charge with the
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`EEOC within 300 days of the date of the alleged wrongful act (or within 180 days in non-
`deferral jurisdictions). 42 U.S.C. § 2000e-5(e)(1); 29 U.S.C. §§ 626(d), 633(b).
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`20. However, under the single filing rule, also referred to as the “piggybacking”
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`doctrine, individuals may pursue discrimination claims even if they did not timely file
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`their own administrative charge of discrimination at the EEOC. See Tolliver v. Xerox
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`Corp., 918 F.2d 1052, 1057-59 (2d Cir. 1990); see also Holowecki v. Federal Exp.
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`Corp., 440 F.3d 558, 565-70 (2d Cir. 2006). All that is required for “piggybacking” is that
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`the earlier filed charge of discrimination is similar to the discrimination claim that the
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`individual wants to pursue. See Tolliver, 918 F.2d at 1057-59. The single filing rule is
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`thus a part of the statute of limitations law for ADEA claims.
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`21. Although Plaintiff would be timely to bring his age discrimination claim in
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`court under the single filing rule by virtue of piggybacking onto similar charges timely
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`filed at the EEOC (such as Plaintiff attempted to do by opting in to the Rusis case), see
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`Tolliver, 918 F.2d at 1057-59; Holowecki, 44 F.3d at 565-70, IBM’s arbitration
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`agreement purports to render Plaintiff’s ADEA claim untimely in arbitration, in that it
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`states that “[t]he filing of a charge or complaint with a government agency or the
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`presentation of a concern through the IBM Open Door Program shall not substitute for
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`or extend the time for submitting a demand for arbitration.” Thus, IBM’s enforcement of
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`this provision has effectively waived Plaintiff’s right to rely on the single filing rule and
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`thus has significantly truncated Plaintiff’s ADEA limitations period.
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`6
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`Case 1:21-cv-06296 Document 1 Filed 07/23/21 Page 7 of 10
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`22. Courts do not permit employers to truncate the limitations periods of
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`ADEA claims by contract because the ADEA limitations period is a substantive, non-
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`waivable right.1 See Thompson v. Fresh Products, LLC, 985 F.3d 509, 519-20 (6th Cir.
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`2021). The EEOC has also taken the position that ADEA limitations periods cannot be
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`abridged by contract. See Thompson, EEOC Brief, 2020 WL 1160190, at *19-25
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`(S.D.N.Y. March 2, 2020).
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`23. Moreover, the law is clear that arbitration is a viable alternative to court
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`only where employees can pursue the same claims they could pursue in court; the law
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`is also clear that employees cannot be required to give up substantive rights if they
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`proceed with their claims in arbitration, rather than in court. See Gilmer v.
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`Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991) (“the prospective litigant [must
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`be able to] effectively . . . vindicate his or her statutory cause of action in the [specific]
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`arbitral forum”).
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`24.
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`IBM’s arbitration agreement also includes a confidentiality provision. IBM
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`has aggressively used this confidentiality provision in order to attempt to block
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`employees who are pursuing their claims in arbitration from using information and
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`rulings obtained in cases by other employees pursuing similar claims, which also
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`challenge the same general practice IBM has engaged in to build a younger workforce
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`by forcing out many older employees.
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`As noted above (paragraph 11), Plaintiff cannot be deemed to have waived his
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`rights under the ADEA because IBM did not provide the disclosures regarding the ages
`of employees who were laid off and were not laid off, as required by the OWBPA. See
`Oubre v. Entergy Operations, Inc., 522 U.S. 422, 426-27 (1998).
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`7
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`Case 1:21-cv-06296 Document 1 Filed 07/23/21 Page 8 of 10
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`25.
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`This confidentiality provision is unconscionable and unenforceable
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`because it unduly hinders employees, such as Plaintiff, from advancing their claims
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`under the ADEA, particularly in such a case that relies heavily on pattern and practice
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`evidence. Numerous courts have limited the operation of confidentiality provisions in
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`arbitration as “secrecy provisions of the arbitration agreements [that] both affect the
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`outcomes of individual arbitrations and clearly favor Defendants.” Schnuerle v. Insights
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`Communications Co., 376 S.W.3d 561, 579 (Ky. 2012) (quoting Acorn v. Household
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`Intern., Inc., 211 F. Supp. 2d 1160, 1173 (N.D. Cal. 2002)). Courts have stricken
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`confidentiality provisions in arbitration agreements since they give the defendant an
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`“obvious informational advantage.” Larsen v. Citibank FSB, 871 F.3d 1295, 1319 (11th
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`Cir. 2017).2
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`See also McKee v. AT&T Corp., 164 Wash.2d 372, 398 (2008) (striking a
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`confidentiality provision where the arbitration claimants “are prevented from sharing
`discovery, fact patterns, or even work product, such as briefing, forcing them to reinvent
`the wheel in each and every claim, no matter how similar.”); Kinkel v. Cingular Wireless
`LLC, 223 Ill. 2d 1, 42 (Ill. 2006) (finding that confidentiality provisions may be
`unconscionable when coupled with class action waivers, because such provisions
`prevent “the claimant [and] her attorney [from] shar[ing] [] information with other
`potential claimants.”); Zuver v. Airtouch Communications, Inc., 153 Wn.2d 293, 299
`(Wash. 2004) (finding an arbitration confidentiality provision unconscionable and
`unenforceable, concluding that “[a]s written, the provision hampers an employee’s
`ability to prove a pattern of discrimination or to take advantage of findings in past
`arbitrations”; “keeping past findings secret undermines an employee's confidence in the
`fairness and honesty of the arbitration process, and thus potentially discourages that
`employee from pursuing a valid discrimination claim.”); Ting v. AT&T, 319 F.3d 1126,
`1152 (9th Cir. 2003) (recognizing that confidentiality provisions in arbitration
`agreements hamper ability of claimants to “obtain[] the information needed to build a
`case”; DeGraff v. Perkins Coie, 2012 WL 3074982, at *4 (N.D. Cal. July 30 2012)
`(severing confidentiality provision); Bragg v. Linden Research, Inc., 487 F.Supp. 2d 59
`(E.D. Pa. 2007) (finding a confidentiality clause within an arbitration agreement to be
`unconscionable because it allows a company to “place[] itself in a far superior legal
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`8
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`Case 1:21-cv-06296 Document 1 Filed 07/23/21 Page 9 of 10
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`26.
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`In arbitration, Plaintiff will likewise be prevented by IBM’s confidentiality
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`provision from benefiting from decisions obtained in other similar arbitrations and
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`sharing discovery with other arbitration claimants who are pursuing this same claim
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`against IBM. Because of this one-sidedness, Plaintiff will be severely hampered, if not
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`fully prevented, from obtaining relief under the ADEA in arbitration.
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`COUNT I
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`Declaratory Judgment Act, 28 U.S.C. §§ 2201-02
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`An actual controversy of sufficient immediacy exists between the parties as to
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`whether certain provisions within IBM’s arbitration agreement, which severely
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`undermine or extinguish Plaintiff’s ability to pursue a claim under the ADEA, are
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`enforceable. In particular, Plaintiff seeks a declaratory judgment from this Court that the
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`timing provision in IBM’s arbitration agreement that purports to waive the single filing, or
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`“piggybacking”, rule is unenforceable. Plaintiff also seeks a declaratory judgment that
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`the confidentiality provision in IBM’s arbitration agreement is unenforceable.
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`posture by ensuring that none of its potential opponents have access to precedent” and
`“[t]he unavailability of arbitral decisions could also prevent potential plaintiffs from
`obtaining the information needed to build a case of intentional misconduct against a
`company.”).
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`9
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`Case 1:21-cv-06296 Document 1 Filed 07/23/21 Page 10 of 10
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`WHEREFORE, Plaintiff requests that this Court enter the following relief:
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`Find and declare that the provision of IBM’s arbitration agreement that
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`purports to waive the single filing, or “piggybacking”, rule, and under which IBM
`contends that Plaintiff’s claim under the ADEA is untimely, is unenforceable and
`otherwise void.
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`Find and declare that the provision of IBM’s arbitration agreement that
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`purports to require arbitration proceedings to enforce the ADEA to be fully
`confidential is unenforceable and otherwise void.
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`3.
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`Any other relief to which Plaintiff may be entitled.
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`Respectfully submitted,
`WILLIAM CHASTKA,
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`By his attorneys,
`/s/ Shannon Liss-Riordan________________
`Shannon Liss-Riordan (NY Bar No. 2971927)
`Zachary Rubin (NY Bar No. 5442025)
`LICHTEN & LISS-RIORDAN, P.C.
`729 Boylston Street, Suite 2000
`Boston, MA 02116
`(617) 994-5800
`Email: sliss@llrlaw.com, zrubin@llrlaw.com
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`Dated:
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`July 23, 2021
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`10
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