Case 1:21-cv-06296-JMF Document 90 Filed 07/14/22 Page 1 of 26
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`IN RE:
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`IBM ARBITRATION AGREEMENT LITIGATION
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`---------------------------------------------------------------------- X
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`JESSE M. FURMAN, United States District Judge:
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`21-CV-6296 (JMF)
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`OPINION AND ORDER
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`In these consolidated cases, twenty-six former employees of International Business
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`Machines Corporation (“IBM”) seek to challenge two provisions of the arbitration agreements
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`that they signed prior to their termination. Plaintiffs either sought to, or intend to, assert claims
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`under the Age Discrimination in Employment Act (“ADEA”) against IBM in arbitration. When
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`they filed these cases, Plaintiffs did not dispute that they were required to bring these claims in
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`arbitration — and, indeed, most of them had. See ECF No. 1 (“Compl.”), at 9-10; ECF No. 27
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`(“Pls.’ Mem.”), at 2; ECF No. 61 (“Pls.’ Opp’n”), at 16.1 Instead, through their Complaints, they
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`seek a declaratory judgment that two provisions of their arbitration agreements are
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`unenforceable: a provision that governs the timeliness of their arbitration claims (the “Timeliness
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`Provision”) and a confidentiality clause (the “Confidentiality Provision”).
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`IBM now moves, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, to
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`dismiss Plaintiffs’ claims. At the same time, Plaintiffs move, pursuant to Rule 56 of the Federal
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`Rules of Civil Procedure, for summary judgment. Additionally, Plaintiffs move for leave to
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`amend their Complaints to add a claim for fraudulent inducement, challenging the enforceability
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`1
`As discussed below, Plaintiffs have since taken a different tack, moving to amend their
`Complaints to bring claims challenging the enforceability of their arbitration agreements. See
`ECF No. 83 (“Pls.’ Mot. to Amend Reply”), at 9. All citations to the record are to filings in 21-
`CV-6296 (JMF), unless otherwise specified.
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`Case 1:21-cv-06296-JMF Document 90 Filed 07/14/22 Page 2 of 26
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`of the arbitration agreements in their entirety. For the reasons that follow, IBM’s motion to
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`dismiss is GRANTED, Plaintiffs’ motion for summary judgment is DENIED as moot, and
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`Plaintiffs’ motion for leave to amend is likewise DENIED.
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`BACKGROUND
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`In considering a Rule 12(b)(6) motion, courts are limited to the facts alleged in the
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`complaint, which are presumed to be true. See, e.g., Burch v. Pioneer Credit Recovery, Inc., 551
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`F.3d 122, 124 (2d Cir. 2008) (per curiam). A court may also consider documents “incorporated
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`by reference” into the complaint, DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir.
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`2010); documents that are “integral” to the complaint, id.; and “documents of which [the court]
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`may take judicial notice, including pleadings and prior decisions in related lawsuits,” Gertskis v.
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`U.S. E.E.O.C., No. 11-CV-5830 (JMF), 2013 WL 1148924, at *1 (S.D.N.Y. Mar. 20,
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`2013), aff’d, 594 F. App’x 719 (2d Cir. 2014) (summary order). Accordingly, the following
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`facts are drawn from the pleadings and the aforementioned additional documents.2
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`A. Plaintiffs’ Terminations and Arbitration Agreements
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`Plaintiffs are all former IBM employees who were over the age of forty at the time of
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`their terminations. See Compl. ¶ 7.3 They allege that they were laid off as a result of a
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`company-wide discriminatory scheme designed to reduce the population of older workers to
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`2
`Plaintiffs submitted evidence outside of the pleadings in support of their motion for
`summary judgment. See ECF Nos. 29, 40. For the reasons discussed below, however, the Court
`does not reach Plaintiffs’ motion and, thus, does not consider this evidence.
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`3
`The complaints in each of the member cases consolidated under No. 21-CV-6296 are
`materially identical, unless otherwise noted.
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`2
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`Case 1:21-cv-06296-JMF Document 90 Filed 07/14/22 Page 3 of 26
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`make way for a new, younger generation of employees. Id. ¶¶ 8-9.4 IBM’s “top management”
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`allegedly implemented this scheme in order to better compete with newer technology companies,
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`such as Google, Facebook (now Meta), Amazon, and others. Id. ¶ 9. In 2020, following a multi-
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`year investigation, the Equal Employment Opportunity Commission (“EEOC”) issued a
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`determination that there was reasonable cause to believe IBM had in fact discriminated against
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`older employees during the time Plaintiffs were laid off. Id. ¶ 10.
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`Upon termination, each Plaintiff signed an agreement to waive almost all of his or her
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`legal claims against IBM in exchange for a modest severance. Id. ¶ 11. The waiver did not
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`cover ADEA claims, but each Plaintiff’s agreement separately provided that such claims could
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`be pursued only through individual arbitration proceedings. Id. Two provisions of the
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`arbitration agreement (the “Arbitration Agreement”) — the terms of which were identical for all
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`Plaintiffs — bear particular relevance here: the Timeliness Provision and the Confidentiality
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`Provision. ECF No. 29-2, at 25-27 (“Arb. Agreement”), at 25-26.5 The first provides:
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`To initiate arbitration, [the employee] must submit a written demand for arbitration to the
`IBM Arbitration Coordinator no later than the expiration of the statute of limitations
`(deadline for filing) that the law prescribes for the claim that you are making or, if the
`claim is one which must first be brought before a government agency, no later than the
`deadline for the filing of such a claim. If the demand for arbitration is not timely
`submitted, the claim shall be deemed waived.
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`4
`The details of the alleged discriminatory scheme are recounted in Rusis v. International
`Business Machines Corp., 529 F. Supp. 3d 178, 188-90 (S.D.N.Y. 2021), an opinion issued by
`Judge Caproni in a related case, familiarity with which is presumed.
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`5
`The Court may consider the Arbitration Agreement for the purposes of resolving IBM’s
`motion to dismiss because it is “incorporated into the complaint by reference.” Kleinman v. Elan
`Corp., PLC, 706 F.3d 145, 152 (2d Cir. 2013); see Compl. ¶¶ 12-14, 24.
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`3
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`Case 1:21-cv-06296-JMF Document 90 Filed 07/14/22 Page 4 of 26
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`Arb. Agreement 26. Importantly, the provision further specifies that “[t]he filing of a charge or
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`complaint with a government agency . . . shall not substitute for or extend the time for submitting
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`a demand for arbitration.” Id. The Confidentiality Provision, meanwhile, states:
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`To protect the confidentiality of proprietary information, trade secrets or other sensitive
`information, the parties shall maintain the confidential nature of the arbitration
`proceeding and the award. The parties agree that any information related to the
`proceeding, such as documents produced, filings, witness statements or testimony, expert
`reports and hearing transcripts is confidential information which shall not be disclosed,
`except as may be necessary to prepare for or conduct the arbitration hearing on the
`merits, or except as may be necessary in connection with a court application for a
`preliminary remedy, a judicial challenge to an award or its enforcement, or unless
`otherwise required by law or judicial decision by reason of this paragraph.
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`Id. at 27. The Arbitration Agreement also provides that “[a]ny issue concerning” its “validity or
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`enforceability . . . shall be decided only by a court of competent jurisdiction.” Id. at 25.
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`B. The Arbitration Proceedings
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`Before filing suit here, twenty-four of the twenty-six Plaintiffs (the “Post-Arbitration
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`Plaintiffs”) — all but Plaintiffs Brian Flannery and Phillip Corbett — sought to pursue their
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`ADEA claims in arbitration. Compl. ¶ 12; see Pls.’ Mem. 8; ECF No. 48 (“Def.’s Mem.”), at 4,
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`n.2; see also No. 21-CV-6384, ECF No. 1 (“Flannery Compl.”), ¶¶ 12, 16; No. 21-CV-6380,
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`ECF No. 1 (“Corbett Compl.”), ¶¶ 12, 16. In each case, the arbitrator dismissed the Plaintiff’s
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`claims as untimely. Pls.’ Mem. 8; see also ECF Nos. 29-26 to 29-48. Specifically, the arbitrator
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`held that the Post-Arbitration Plaintiffs had failed to file written arbitration demands within the
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`time specified by the Timeliness Provision. See Pls.’ Mem. 8; see, e.g., ECF No. 29-26, at 1. In
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`each case, the arbitrator further held that the Timeliness Provision bars application of the
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`“piggybacking rule,” which Plaintiffs had argued would render their claims timely. See Pls.’
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`Mem. 8; see, e.g., ECF No. 29-26, at 2-3. The judicially created piggybacking rule is an
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`exception to the ADEA’s EEOC charge-filing requirement, which requires a plaintiff seeking to
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`bring an ADEA claim in court to file an EEOC charge within 180 or 300 days after the “alleged
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`4
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`Case 1:21-cv-06296-JMF Document 90 Filed 07/14/22 Page 5 of 26
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`unlawful employment practice occurred,” and then to wait “until 60 days after” that charge is
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`filed to sue. 29 U.S.C. § 626(d)(1).6 Pursuant to the piggybacking rule, a plaintiff who failed to
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`file his or her own EEOC charge within the 180- or 300-day deadline can “piggyback” off of
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`another person’s timely filed EEOC charge that alleges “similar discriminatory treatment in the
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`same time frame.” Holowecki v. Fed. Exp. Corp., 440 F.3d 558, 564 (2d Cir. 2006), aff’d, 552
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`U.S. 389 (2008).
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`Notably, no Post-Arbitration Plaintiff filed a petition to vacate his or her arbitral decision
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`within the three-month timeframe set forth in the Federal Arbitration Act (“FAA”). 9 U.S.C.
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`§ 12; see Pls.’ Opp’n 16. The other two Plaintiffs — Flannery and Corbett — had not yet
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`initiated arbitration proceedings as of the date they filed their Complaints here. See Pls.’ Mem.
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`8; Flannery Compl. ¶¶ 12, 16; Corbett Compl. ¶¶ 12, 16.
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`C. The Rusis Action and Plaintiffs’ Individual Actions
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`Before filing their Complaints here, Plaintiffs first sought to opt into a putative class
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`action pending before Judge Caproni, Rusis v. International Business Machines Corp., No. 18-
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`CV-8434.7 Rusis, which was filed in 2018, involves the same underlying ADEA claims as those
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`Plaintiffs press here, but was brought by IBM employees who had not signed the Arbitration
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`Agreements at issue here. See Rusis, 529 F. Supp. 3d at 188-90. In March 2021, Judge Caproni
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`dismissed the claims of Plaintiffs here on the ground that the Arbitration Agreements they had
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`6
`In addition to the deadline for filing an EEOC charge, the ADEA “also imposes a 90-day
`deadline for the commencement of a court action if the EEOC notifies the claimant that it has
`dismissed her charge or has otherwise terminated the proceedings.” Francis v. Elmsford Sch.
`Dist., 442 F.3d 123, 126 (2d Cir. 2006); see 29 U.S.C. § 626(e).
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`Plaintiffs clarified in briefing that the Complaints filed by Plaintiffs Flannery and
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`Deborah Kamienski “inadvertently state incorrectly that they opted in to Rusis.” Pls.’ Mem. 3
`n.4. The clarification is immaterial to the pending motions.
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`5
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`Case 1:21-cv-06296-JMF Document 90 Filed 07/14/22 Page 6 of 26
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`signed contained a class and collective action waiver that barred them from opting into the Rusis
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`putative class action. Id. at 195-96. In a footnote, Judge Caproni expressed “skepticism” with
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`respect to Plaintiffs’ argument that the Timeliness Provision in their Arbitration Agreements was
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`unenforceable because it purported to waive a substantive right under the ADEA — namely, the
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`piggybacking rule. Id. at 192 n.4. Ultimately, however, Judge Caproni “d[id] not reach the
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`issue” given Plaintiffs’ intention to file “individual actions involving the same issue.” Id.
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`Approximately four months after Judge Caproni’s decision in Rusis, Plaintiffs brought
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`these cases seeking declaratory relief. See Compl. 9-10. In particular, Plaintiffs seek a
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`declaratory judgment that two provisions of their arbitration agreements — the Timeliness and
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`Confidentiality Provisions — are unenforceable. See id. On August 24, 2021, the Court
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`consolidated the actions, while clarifying that each action would retain its “separate” identity.
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`ECF No. 20 (quoting Hall v. Hall, 138 S. Ct. 1118, 1128-31 (2018)).8 Plaintiffs thereafter
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`moved for summary judgment, and IBM filed a motion to dismiss. ECF Nos. 27, 47. Nearly a
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`month after briefing for those two motions was complete, Plaintiffs filed a motion for leave to
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`amend their Complaints in order to add a class-based fraudulent inducement claim. See ECF No.
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`79 (“Pls.’ Mot. to Amend Mem.”), at 1-2; ECF No. 79-1 (“PAC”). IBM opposed. ECF No. 80.
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`DISCUSSION
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`As noted, three motions are before the Court: (1) IBM’s motion to dismiss the
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`Complaints; (2) Plaintiffs’ motion for summary judgment; and (3) Plaintiffs’ motion for leave to
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`8
`The Court consolidated the following twenty-five member cases under No. 21-CV-6296
`on August 24, 2021: Nos. 21-CV-6296; 21-CV-6297; 21-CV-6308; 21-CV-6310; 21-CV-6312;
`21-CV-6314; 21-CV-6320; 21-CV-6322; 21-CV-6323; 21-CV-6325; 21-CV-6326; 21-CV-6331;
`21-CV-6332; 21-CV-6337; 21-CV-6340; 21-CV-6341; 21-CV-6344; 21-CV-6349; 21-CV-6351;
`21-CV-6353; 21-CV-6355; 21-CV-6375; 21-CV-6377; 21-CV-6380; 21-CV-6384. See ECF No.
`20. On November 24, 2021, the Court added one additional action, No. 21-CV-6307. See ECF
`No. 57. In total, there are twenty-six member cases in this action.
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`6
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`Case 1:21-cv-06296-JMF Document 90 Filed 07/14/22 Page 7 of 26
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`amend. Before the Court turns to any of these motions, however, it has an “independent
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`obligation” to address the threshold question of subject-matter jurisdiction. Arbaugh v. Y&H
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`Corp., 546 U.S. 500, 514 (2006) (“[Courts] have an independent obligation to determine whether
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`subject-matter jurisdiction exists, even in the absence of a challenge from any party.”); see, e.g.,
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`Ashcroft v. Iqbal, 556 U.S. 662, 671 (2009) (“Subject-matter jurisdiction cannot be forfeited or
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`waived and should be considered when fairly in doubt.”). To the extent that the Court concludes
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`that it has jurisdiction to do so, the Court will then turn to the parties’ motions in turn.
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`A. Subject-Matter Jurisdiction
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`Plaintiffs here invoke the Court’s federal-question jurisdiction based on the Declaratory
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`Judgment Act (“DJA”), 28 U.S.C. §§ 2201-02. See Compl. ¶ 5. Under the DJA, a court “may
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`declare the rights and other legal relations of any interested party seeking such declaration” in “a
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`case of actual controversy within its jurisdiction.” 28 U.S.C. § 2201. “The purpose of
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`declaratory relief is to relieve litigants from the ongoing or imminent harm they may suffer when
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`their rights vis-à-vis each other are uncertain.” Parker v. Citizen’s Bank, N.A., No. 19-CV-1454
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`(VEC), 2019 WL 5569680, at *4 (S.D.N.Y. Oct. 29, 2019) (citing United States v. Doherty, 786
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`F.2d 491, 498 (2d Cir. 1986)). It is therefore a “prospective remedy intended to resolve or
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`mitigate disputes that may yield later litigation.” EFG Bank AG, Cayman Branch v. AXA
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`Equitable Life Ins. Co., 309 F. Supp. 3d 89, 99 (S.D.N.Y. 2018).
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`Importantly, as relevant here, claims “in a declaratory judgment action” are only “ripe[]”
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`where “there is a substantial controversy, between parties having adverse legal interests, of
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`sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Duane
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`Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 411 F.3d 384, 388 (2d Cir. 2005). “[A]
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`touchstone to guide the probe for sufficient immediacy and reality is whether the declaratory
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`Case 1:21-cv-06296-JMF Document 90 Filed 07/14/22 Page 8 of 26
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`relief sought relates to a dispute where the alleged liability has already accrued or the threatened
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`risk occurred, or rather whether the feared legal consequence remains a mere possibility.”
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`Wilmington Tr., Nat’l Ass’n v. Est. of McClendon, 287 F. Supp. 3d 353, 364 (S.D.N.Y. 2018).
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`Additionally, “[t]he DJA ‘confers a discretion on the courts rather than an absolute right
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`upon the litigant.’” John Wiley & Sons, Inc. v. Visuals Unlimited, Inc., No. 11-CV-5453 (CM),
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`2011 WL 5245192, at *4 (S.D.N.Y. Nov. 2, 2011) (quoting Wilton v. Seven Falls Co., 515 U.S.
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`277, 287 (1995)); see 28 U.S.C. § 2201 (“[Courts] may declare the rights and other legal
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`relations of any interested party seeking such declaration . . . .” (emphasis added)). Indeed,
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`“[c]ourts have consistently interpreted [the] permissive language [of the DJA] as a broad grant of
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`discretion to district courts to refuse to exercise jurisdiction over a declaratory action that they
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`would otherwise be empowered to hear.” Dow Jones & Co. v. Harrods Ltd., 346 F.3d 357, 359
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`(2d Cir. 2003) (per curiam). “[T]o decide whether to entertain an action for declaratory
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`judgment,” courts in this Circuit consider “(1) whether the judgment will serve a useful purpose
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`in clarifying or settling the legal issues involved; and (2) whether a judgment would finalize the
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`controversy and offer relief from uncertainty.” Duane Reade, Inc., 411 F.3d at 389.
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`Applying the foregoing standards, the Court first concludes, as an exercise of its
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`discretion, that it is not appropriate to entertain jurisdiction over the Post-Arbitration Plaintiffs’
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`claims. That is because “there is no current or impending controversy about the[ir] rights or
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`obligations [vis-à-vis IBM] for this Court to clarify.” Parker, 2019 WL 5569680, at *3. As
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`Plaintiffs themselves concede, each of the Post-Arbitration Plaintiffs already arbitrated their
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`ADEA claims, lost, and chose not to file any motion to vacate the arbitral decision within the
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`three-month deadline under the FAA. See Compl. ¶ 12, 16; ECF Nos. 29-26 to 29-48; Pls.’
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`Opp’n 16; see also 9 U.S.C. § 12. Instead, they waited nearly two (and in some cases more than
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`Case 1:21-cv-06296-JMF Document 90 Filed 07/14/22 Page 9 of 26
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`two) years after they received their arbitration decisions to initiate this action for declaratory
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`relief challenging the enforceability of two provisions of their arbitration agreements. See ECF
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`Nos. 29-26 to 29-48.
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`In light of these circumstances, both factors that the Second Circuit has instructed district
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`courts to consider weigh against exercising DJA-jurisdiction over the Post-Arbitration Plaintiffs’
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`claims. There is no “useful purpose” that a declaratory judgment would serve at this point; nor is
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`there any “uncertainty” in the parties’ legal relations for the Court to resolve. Duane Reade, Inc.,
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`411 F.3d at 389. To the contrary, the arbitration proceedings definitively resolved the Post-
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`Arbitration Plaintiffs’ ADEA claims, and the window to challenge those rulings, or the
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`enforceability of the provisions that governed them, has long since closed. Duane Reade, Inc.,
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`411 F.3d at 389; see also 9 U.S.C. § 12.9 The Court therefore declines to exercise jurisdiction to
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`resolve the Post-Arbitration Plaintiffs’ claims. See Duane Reade, Inc., 411 F.3d at 389; Jenkins
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`v. United States, 386 F.3d 415, 417-18 (2d Cir. 2004) (“[DJA actions] must have . . . some useful
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`purpose to be achieved in deciding them.”); see also, e.g., Parker, 2019 WL 5569680, at *3, *5
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`9
`Plaintiffs argue that, although the deadline to seek vacatur of the arbitration decisions has
`passed, they could nevertheless seek “relief from judgment pursuant to [Federal Rule of Civil
`Procedure] 60” in arbitration “[s]hould th[e] Court determine that the timeliness provision in the
`arbitration agreement is . . . unenforceable.” Pls.’ Opp’n 17. But, as noted, it has been nearly
`two (or more) years since the Post-Arbitration Plaintiffs’ ADEA claims were dismissed in
`arbitration, making it highly unlikely that any arbitrator would in fact entertain any Rule 60(b)
`motion. See Fed. R. Civ. P. 60(c) (“A motion under Rule 60(b) must be made within a
`reasonable time — and for reasons (1), (2), and (3) no more than a year after the entry of the
`judgment or order or the date of the proceeding.”). Thus, Plaintiffs’ proposed Rule 60
`workaround does not alter this Court’s conclusion that a declaratory ruling on the enforceability
`of the Timeliness and Confidentiality Provisions would be unlikely to serve any “useful purpose”
`with respect to the Post-Arbitration Plaintiffs. Duane Reade, Inc., 411 F.3d at 389. Moreover,
`Plaintiffs’ reliance on the DJA is little more than a transparent attempt to “avoid the procedural
`requirements” and limitations associated with motions to vacate arbitral awards. Parker, 2019
`WL 5569680, at *5; see also John Wiley & Sons, 2011 WL 5245192, at *4. That is all the more
`reason to be wary of exercising subject-matter jurisdiction in these circumstances.
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`(declining to exercise jurisdiction over a DJA claim where the “[d]eclaratory relief [sought] . . .
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`would not resolve any ongoing or impending harm to [the p]laintiff vis-à-vis her relationship
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`with [the d]efendants” and “would not clarify any uncertainty in the parties’ legal relations”);
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`Dow Jones & Co. v. Harrods, Ltd., 237 F. Supp. 2d 394, 439 (S.D.N.Y. 2002) (reaching the
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`same result because, inter alia, the “[c]ourt [wa]s not persuaded . . . the declaratory relief
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`[sought] would . . . serve a useful purpose in clarifying the legal relations between the parties”),
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`aff’d, 346 F.3d 357 (2d Cir. 2003). Thus, the claims of the Post-Arbitration Plaintiffs must be,
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`and are, dismissed.10
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`10
`Separate and apart from the foregoing, the Supreme Court’s recent decision in Badgerow
`v. Walters, 142 S. Ct. 1310 (2022) — which was issued after the Court issued its August 24,
`2022 Order regarding subject-matter jurisdiction, ECF No. 20, and after briefing in these cases
`was complete — casts doubt on the Court’s jurisdiction over the Post-Arbitration Plaintiffs’
`claims. In brief, the Badgerow Court held that the “look-through” approach to determining
`jurisdiction for motions to compel jurisdiction under Section 4 of the FAA does not apply to
`motions to confirm or vacate arbitral awards under Sections 9 and 10 of the FAA. Id. at 1314.
`As such, the source of jurisdiction must appear on “the face of the Section 9 or 10 application[]”
`— that is, it generally must show that there is diversity jurisdiction or allege “that federal law
`(beyond Section 9 or 10 itself) entitles the applicant to relief.” Id. at 1316-17. Here, the DJA is
`the sole proffered basis for federal jurisdiction. But the DJA does not confer jurisdiction on its
`own; instead, “when determining declaratory judgment jurisdiction, [courts] often look to the
`character of the threatened action. That is to say, they ask whether a coercive action brought by
`the declaratory judgment defendant . . . would necessarily present a federal question.”
`Medtronic, Inc. v. Mirowski Fam. Ventures, LLC, 571 U.S. 191, 197 (2014) (cleaned up).
`Assuming that the “threatened action” with respect to the Post-Arbitration Plaintiffs’ claims
`would be a motion to confirm an arbitration award under Section 9 (given that those Plaintiffs
`have already arbitrated), then the Court could not “look through” to the underlying ADEA claim
`for jurisdiction per Badgerow, 142 S. Ct. at 1314. Instead, the federal question would have to
`appear on the “face” of the threatened Section 9 action for the Court to have jurisdiction over the
`Post-Arbitration Plaintiffs’ claims. Id. But Badgerow provides “no examples” of what it means
`for a “federal question with respect to the award’s confirmation or vacatur” to exist on the face
`of the petition. Bissonnette v. LePage Bakeries Park St., LLC, 33 F.4th 650, 661 (2d Cir. 2022)
`(Jacobs, J., concurring). Ultimately, however, the Court need not, and does not, resolve this
`thorny jurisdictional question because, for the reasons discussed above, it concludes jurisdiction
`is lacking on other grounds. See Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 585 (1999) (“It
`is hardly novel for a federal court to choose among threshold grounds for denying audience to a
`case on the merits.”).
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`Additionally, the Court concludes that it lacks jurisdiction to adjudicate the remaining
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`claims (those of Plaintiffs Flannery and Corbett) regarding the Confidentiality Provision because
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`they are not yet — and may never become — ripe. See Compl. 10, ¶ 2.11 As noted, “[t]he
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`standard for ripeness in a declaratory judgment action is that there is a substantial controversy
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` . . . of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”
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`Duane Reade, Inc., 411 F.3d at 388 (internal quotation marks omitted). To determine whether a
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`controversy is of “sufficient immediacy and reality,” courts typically look to “whether the
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`declaratory relief sought relates to a dispute where the alleged liability has already accrued or the
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`threatened risk occurred, or rather whether the feared legal consequence remains a mere
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`possibility, or even probability of some contingency that may or may not come to pass.” Dow
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`Jones & Co., Inc., 237 F. Supp. 2d at 406-07. The fact that “liability may be contingent,”
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`however, “does not necessarily defeat jurisdiction of a declaratory judgment action.” Associated
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`Indem. Corp. v. Fairchild Indus., Inc., 961 F.2d 32, 35 (2d Cir. 1992). “When liability is
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`contingent,” a court should “focus on ‘the practical likelihood that the contingencies will
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`occur.’” U.S. Dep’t of Treasury v. Off. Comm. of Unsecured Creditors of Motors Liquidation
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`Co., 475 B.R. 347, 358 (S.D.N.Y. 2012) (quoting Associated Indem. Corp., 961 F.2d at 35).
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`Here — as IBM points out and Plaintiffs do not dispute — the Confidentiality Provision
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`will play a role in Flannery and Corbett’s arbitration proceedings only if the arbitrator rules that
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`they have timely ADEA claims to arbitrate in the first place. See Def.’s Mem. 2, 24; Pls.’ Opp’n
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`19-34 (not disputing this point). But there is no “practical likelihood” that that contingency will
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`occur. Associated Indem. Corp., 961 F.2d at 35. That is because, as explained below, there is no
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`11
`The Court did not consider ripeness in its August 24, 2022 Order, in which the Court
`indicated that it was, at that point, “satisfied . . . there is subject-matter jurisdiction given that the
`underlying arbitrations involved claims under the [ADEA].” ECF No. 20.
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`Case 1:21-cv-06296-JMF Document 90 Filed 07/14/22 Page 12 of 26
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`merit to Plaintiffs’ claim that the Timeliness Provision is unenforceable. See Compl. 10, ¶ 1. It
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`follows that there is no reason to believe an arbitrator would conclude Flannery and Corbett have
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`timely ADEA claims. See Pls.’ Opp’n 26 n.16 (acknowledging the Post-Arbitration Plaintiffs’
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`ADEA claims were all “dismissed as untimely” in arbitration based on the Timeliness
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`Provision); cf. Chandler v. Int’l Bus. Machs. Corp., No. 21-CV-6319 (JGK), 2022 WL 2473340,
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`at *7 & n.4 (S.D.N.Y. July 6, 2022) (concluding, in a case involving a challenge to the same two
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`provisions of IBM’s arbitration agreement, that the “plaintiff’s claim for declaratory relief with
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`respect to the Confidentiality Provision [was] . . . moot” given the court’s holding that the
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`Timeliness Provision is enforceable). The net result is that the “controversy” raised by Flannery
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`and Corbett’s claims regarding the Confidentiality Provision lacks “sufficient immediacy and
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`reality” to render it ripe for this Court’s review. Duane Reade, Inc., 411 F.3d at 388. The Court
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`must therefore dismiss those claims without prejudice to renewal in the unlikely event that the
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`issue ever becomes ripe.
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`B. IBM’s Motion to Dismiss Plaintiffs’ Challenge to the Timeliness Provision
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`That leaves only the challenge of Plaintiffs Flannery and Corbett to the enforceability of
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`the Timeliness Provision, which IBM moves to dismiss pursuant to Rule 12(b)(6).12 It is well
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`established that “arbitration is a matter of contract.” Am. Exp. Co. v. Italian Colors Rest., 570
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`U.S. 228, 233 (2013); see 9 U.S.C. § 2. Thus, “courts must rigorously enforce arbitration
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`agreements according to their terms,” including “the rules under which that arbitration will be
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`conducted.” Id. (internal quotation marks omitted); accord Epic Sys. Corp. v. Lewis, 138 S. Ct.
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`1612, 1621 (2018). “By agreeing to arbitrate a statutory claim,” however, “a party does not
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`forgo the substantive rights afforded by the statute; it only submits to their resolution in an
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`Throughout this Section, “Plaintiffs” refers to Plaintiffs Flannery and Corbett.
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`12
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`12
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`Case 1:21-cv-06296-JMF Document 90 Filed 07/14/22 Page 13 of 26
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`arbitral, rather than a judicial, forum.” Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
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`Inc., 473 U.S. 614, 628 (1985). Thus, “a substantive waiver of federally protected civil rights” in
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`an arbitration agreement “will not be upheld.” 14 Penn Plaza LLC v. Pyett, 556 U.S. 247, 273
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`(2009) (citing Mitsubishi Motors, 473 U.S. at 637 & n.19). Federal courts will also decline to
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`enforce “[arbitration] agreements that prevent the ‘effective vindication’ of a federal statutory
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`right.” Italian Colors, 570 U.S. at 235; see also Ragone v. Atl. Video at Manhattan Ctr., 595
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`F.3d 115, 125 (2d Cir. 2010) (“[A] federal court will compel arbitration of a statutory claim only
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`if it is clear that ‘the prospective litigant effectively may vindicate its statutory cause of action in
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`the arbitral forum.’” (quoting Mitsubishi Motors, 473 U.S. at 637)).
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`Plaintiffs challenge the enforceability of the Timeliness Provision in their Arbitration
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`Agreements on both grounds. That is, they argue first that it is unenforceable to the extent that it
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`purports to waive the piggybacking rule because that rule gives rise to a substantive right under
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`the ADEA. See Pls.’ Mem. 3, 11-21; Pls.’ Opp’n 7-15. Second, they contend that the “purported
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`waiver would impermissibly prevent the effective vindication of Plaintiffs’ claims in arbitration.”
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`Pls.’ Mem. 12. Neither argument is persuasive.
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`1. The Piggybacking Rule Is Not a Substantive Right for FAA Purposes
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`First, there is no merit to Plaintiffs’ contention that the judge-made piggybacking rule
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`gives rise to a substantive, nonwaivable right under the ADEA. For starters, Plaintiffs do not
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`cite, nor has the Court found, any authority to support the proposition that the ADEA creates a
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`substantive right to piggybacking in any context — let alone specifically in the context of
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`determining the enforceability of an agreement to arbitrate. See Pls.’ Opp’n 7-15.13 Instead,
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`13
`That is perhaps unsurprising. As the Supreme Court has made clear, “courts [must]
`enforce agreements to arbitrate according to their terms . . . unless the FAA’s mandate has been
`‘overridden by a contrary congressional command.’” CompuCredit Corp. v. Greenwood, 565
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`Case 1:21-cv-06296-JMF Document 90 Filed 07/14/22 Page 14 of 26
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`Plaintiffs argue that “[t]he piggybacking rule is part of . . . the ADEA’s limitations period” and
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`that the “ADEA’s limitations period is a substantive right.” Pls.’ Opp’n 9, 12. But that
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`argument is difficult, if not impossible, to square with Supreme Court and Second Circuit
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`precedent. Indeed, whether or not the piggybacking rule is properly considered part of the
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`ADEA’s limitations period — a question the Court need not answer — Supreme Court precedent
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`makes plain that the substantive right protected from waiver under the FAA is far narrower than
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`Plaintiffs claim. As the Supreme Court explained in 14 Penn Plaza LLC, the substantive right
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`conferred by the ADEA for FAA purposes is the “right to be free from workplace age
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`discrimination.” 556 U.S. at 265. Importantly, the Court “distinguished” that right from
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`“procedural [ones], like ‘the right to seek relief from a court in the first instance.’” Estle v. Int’l
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`Bus. Machs. Corp., 23 F.4th 210, 214 (2d Cir. 2022) (quoting 14 Penn Plaza, 556 U.S. at 265).
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`The ADEA’s limitations period falls comfortably in the latter category; it is more akin to the
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`procedural “right to seek relief from a court in the first instance” than it is to the substantive
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`“right to be free from workplace age discrimination.” 14 Penn Plaza, 556 U.S. at 265.
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`That conclusion is