Gregory Slotnick – Class Action Defense

February 18, 2026February 18, 2026 by Gerald L. Maatman, Jr.

A Win For Plaintiffs And A Warning For Class Counsel: New Jersey Appellate Division Reverses Dismissal Of Class Action Consumer Fraud Claims But Bars Attorney From Dual Role

By Gerald L. Maatman, Jr., Gregory S. Slotnick, Gregory D. Herrold, and Elizabeth G. Underwood

Duane Morris Takeaways: On February 17, 2026, in Paciorkowski v. Jetson Electric Bikes LLC, No. A-1640-24, 2026 WL 438086, at *1 (N.J. App. Div. Feb. 17, 2026), the New Jersey Appellate Division reversed a trial court’s dismissal of a plaintiff’s individual consumer fraud claims against an electric bike manufacturer, holding that a plaintiff need not demonstrate personal injury to establish standing under the New Jersey Consumer Fraud Act (“CFA”). However, the Appellate Division affirmed the denial of class certification, holding that an attorney cannot serve in the dual role of class representative and class counsel due to inherent conflicts of interest, reaffirming a general rule established over forty years ago that remains valid today. Id. at *6.

This decision underscores that economic losses, such as purchasing defective products, are sufficient to establish standing under the CFA, while also reinforcing the longstanding prohibition against attorneys wearing two hats in class action litigation.

Case Background

Plaintiff Thomas Paciorkowski, an attorney proceeding pro se, purchased three electric Bolt bikes manufactured by defendant Jetson Electric Bikes, LLC (“Jetson”) over the course of eight months in 2020. Id. at *1. Plaintiff alleged that he purchased the bikes for personal use, primarily for vacations, and did not use them for over a year after purchase. Id. He stated he first became aware the bikes were defective over a year after purchase when he went to inflate the bike tires and discovered they would not support his weight or the weight capacity listed on the bikes. Id.

On January 5, 2024, nearly four years after purchasing his first bike, Plaintiff filed a complaint against Jetson asserting individual claims and seeking to certify a class action. Id. The complaint asserted seven causes of action: two violations of the CFA; common law fraud; breach of express warranties; breach of implied warranties of merchantability; violations of the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301-2312; and unjust enrichment. Id.

Plaintiff alleged that Jetson made misrepresentations and engaged in unconscionable commercial practices in advertising and marketing its electric bikes. Id. at *2. Specifically, plaintiff asserted four main contentions. Id. First, plaintiff claimed the Bolt had a maximum rider-weight limit of 250 pounds and the Bolt Pro had a maximum rider-weight limit of 265 pounds, but both bikes were equipped with tires that could not support those weights. Id. Second, plaintiff alleged that Jetson advertised the bike tires as being made from rubber when they were actually made from cheaper nylon. Id. Third, plaintiff contended that Jetson advertised the bikes as made from rust-proof aluminum, but the frames were made from cheaper steel or iron that could rust. Id. Fourth, plaintiff asserted that both bikes are illegal to use in New Jersey because the Bolt, being motorized but lacking pedals, should be classified as a motorcycle under New Jersey law and cannot be used on bike paths or bike lanes. Id.

Jetson did not appear in the trial court, and on May 10, 2024, a default was entered against it. Id. at *1. On September 18, 2024, plaintiff moved to certify a class, which he defined as “[A]ll purchasers of Jetson Bolts and Bolt Pros who purchased the products at Costco stores in New Jersey or who purchased online at Costco and had the product shipped to a New Jersey address. The class excludes everyone who returned the product to Costco.” Id. at *2. Plaintiff represented that there were 230 potential plaintiffs who purchased Bolts and 4,863 potential plaintiffs who purchased Bolt Pros. Id.

On December 24, 2024, the trial court entered an order denying plaintiff’s motion to certify a class. Id. at *3. In a brief written statement, the trial court determined plaintiff lacked standing to bring any claims because he had “suffered no personal injury from the product.” Id.

The Appellate Division’s Ruling

On appeal, the Appellate Division reversed the dismissal of plaintiff’s individual claims, holding that the trial court erred in concluding plaintiff lacked standing. Id. at *6.

The Appellate Division explained that a plaintiff can bring a claim under the CFA if he “suffers any ascertainable loss of moneys or property” as a result of unlawful conduct. Id. at *3. According to the Appellate Division, an ascertainable loss is one that is “quantifiable or measurable,” and can be established by demonstrating either an out-of-pocket loss or a deprivation of the benefit of one’s bargain. Id. (citing Robey v. SPARC Grp. LLC, 256 N.J. 541, 548 (2024)).

The Appellate Division found that plaintiff alleged ascertainable losses under the CFA because he purchased three Jetson bikes for just under $700 and alleged they are defective and unusable. Id. at *4. It emphasized that personal injury is not a requirement for standing under the CFA, noting that the New Jersey Supreme Court has clarified the CFA only allows recovery of economic damages and does not permit recovery of non-economic damages. Id. at *4.

However, while the Appellate Division reversed on standing grounds regarding plaintiff’s individual claims, the court affirmed the denial of class certification on alternative grounds, holding plaintiff cannot serve in the dual role of class representative and class counsel. Id. at *5.

The Appellate Division relied on the New Jersey Supreme Court’s decision in In Re Cadillac V8-6-4 Class Action, 93 N.J. 412 (1983), which adopted a general rule prohibiting a lawyer from serving in the dual capacities of class representative and attorney for the class. Id. at *6. The ruling in In Re Cadillac identified three concerns: (1) the appearance of impropriety; (2) a potential conflict of interest because attorneys’ fees are drawn from the fund that also provides compensation to class members; and (3) the prohibition against an attorney acting as counsel in a case where he or she might also be a witness. Id.

Moreover, the decision noted that the U.S. Court of Appeals for the Third Circuit continues to adhere to a per se prohibition against a plaintiff class representative serving as class counsel. Id. (citing Kramer v. Scientific Control Corp., 534 F.2d 1085, 1090 (3d Cir. 1976)). The court noted that it was unaware of any case questioning the validity of the rule established in In re Cadillac, and interpreted the lack of recent cases questioning this rule as “acceptance of the well-established rule and its continued validity.” Id.

Of note, it acknowledged the single narrow exception to the rule adopted by In Re Cadillac, which potentially allows for an attorney to serve as both counsel and class representative in certain public interest litigation. The Appellate Division held that the instant case did not qualify as the type of action covered by the public interest except

Implications For Employers

This decision reinforces New Jersey’s (and the Third Circuit’s) longstanding prohibition against attorneys serving as both class counsel and class representative. While this may seem to limit class action exposure in situations when a plaintiff-attorney brings suit, employers should recognize that this procedural bar does not eliminate potential individual claims or prevent a class from proceeding with separate counsel and representative plaintiffs.

February 18, 2026February 18, 2026 by Gerald L. Maatman, Jr.

Settlement Stalled Yet Again: Second Circuit Affirms Denial Of Consent Decree To Resolve Decades‑Long Race Discrimination Lawsuit

By Gerald L. Maatman, Jr., Gregory S. Slotnick, and Elizabeth G. Underwood

Duane Morris Takeaways: On February 12, 2026, the U.S. Court of Appeals for the Second Circuit affirmed a district court’s refusal to so order a proposed consent decree between the Equal Employment Opportunity Commission (“EEOC”) and a union that would have substantially modified and terminated court supervision over the union’s referral hall and hiring practices in a Title VII enforcement action that has been pending for fifty-five years. United States Equal Emp. Opportunity Comm’n v. Loc. 580 of the Int’l Ass’n of Bridge, Structural & Ornamental Ironworkers, Joint Apprentice-Journeymen Educ. Fund of the Architectural Ornamental Iron Workers Loc. 580, Allied Bldg. Metal Indus., No. 25-CV-44, 2026 WL 392327, at *1 (2d Cir. Feb. 12, 2026). Applying the standard set out in S.E.C. v. Citigroup Glob. Mkts., Inc., 752 F.3d 285, 294 (2d Cir. 2014), the Second Circuit held that the district court did not abuse its discretion in finding the proposed settlement was not “fair and reasonable” and did not adequately resolve the core discrimination claims in the original 1971 complaint. Id. at *4. The Second Circuit, like the district court, emphasized the union’s consistent failures to comply with court‑ordered recordkeeping obligations, the gaps in the critical referral‑hall data, and the need for a more extensive factual record before the court may unwind extensive injunctive relief and oversight in this case. Id.

Case Background

The litigation began in 1971, when the U.S. Department of Justice (“DOJ”) filed suit against Local 580 of the International Association of Bridge, Structural, and Ornamental Ironworkers and the Join Apprentice-Journeymen Educational Fund of the Architectural Ornamental Iron Workers Local 580 (“Local 580”), alleging race discrimination in their employment practices, in violation of Title VII of the Civil Rights Act of 1964. Id. at *1. The complaint asserted that Local 580 engaged in “patterns and practices” of discrimination that denied non-white individuals employment opportunities because of their race. Id. Specifically, the complaint alleged that Local 580 systemically excluded non-white individuals from union membership and refused to refer them for available ironworking jobs. Id.

In 1974, the EEOC was substituted as plaintiff for the DOJ. Id. at n.1. In 1978, following negotiations, the district court entered a consent judgment that: (1) permanently enjoined the union from discriminating against Black and Hispanic ironworkers; (2) established remedial membership benchmarks for Black and Hispanic workers; and (3) imposed specific data‑collection and recordkeeping requirements regarding operation of the union’s referral hall — “a clearinghouse in which the union matches available members with employers requesting ironworking services.” Id.

Over the ensuing decades, however, the union repeatedly failed to comply with its obligations. Id. Throughout the 1980’s and 1990’s, the district court issued multiple contempt orders addressing non‑compliance and increased the scope of its mandatory union remedial obligations. Id.

In 2019, following a period without discrimination complaints, the EEOC assessed whether ongoing court supervision remained necessary. Id. at *2. Interviews with 41 Black and Hispanic current and former Local 580 members revealed that 17% reported racial discrimination, often involving referral-hall operations or job allocation. Id. The EEOC’s labor economist analyzed “fund office” data from 2009–2019, which showed racial disparities in overtime and working days (attributed to employer rather than union conduct), and “hiring hall dispatch” data limited to June 2018–2019, which showed no statistically significant disparities and mixed results on unemployment duration. Id. Based on this record, the EEOC and the union negotiated a proposed consent decree that would impose new, less stringent compliance obligations, vacate all prior remedial obligations and court orders, immediately terminate the special master’s appointment, and end judicial oversight after three years. Id.

In 2020, the parties jointly moved to enter the proposed consent decree. Id. The district court requested supplemental information, including the union’s 2009–2018 referral-hall data, which was missing from the economist’s report but which had been required by court order, and evidence of efforts to address the documented disparities. Id. Ultimately, the district court denied the motion without prejudice in 2022, determining the EEOC’s submission was insufficient, and the parties had “entirely failed” to produce the missing data and had not described remedial actions, as required. Id.

In 2023, the parties renewed their motion for the same proposed decree. Id. at *3. The district court again denied the motion in 2024, concluding the settlement was not “fair and reasonable” and not in the public interest. Id. The court reasoned that without mandated referral-hall data and evidence of remedial efforts, it could not conclude the decree would resolve the core discrimination allegations, and that approval could signal that other litigants may ignore court-ordered recordkeeping without consequence. Id.

The EEOC appealed, arguing that the district court abused its discretion in finding the proposed consent decree was not fair and reasonable and was not in the public’s interest. Id.

The Second Circuit’s Ruling

The Second Circuit ultimately affirmed the district court’s denial of the proposed consent decree, finding the district court did not abuse its discretion in concluding that the decree failed the “fair and reasonable” standard. Id. at *1. The Second Circuit applied the Citigroup framework, which requires a proposed consent decree to be both “fair and reasonable” and not disserve the public interest. Id. at *4 (quoting Citigroup, 752 F.3d at 294). According to the Second Circuit, to determine whether a proposed settlement is “fair and reasonable,” a district court considers four factors, including: “(1) the basic legality of the decree; (2) whether the terms of the decree, including its enforcement mechanism, are clear; (3) whether the consent decree reflects a resolution of the actual claims in the complaint; and (4) whether the consent decree is tainted by improper collusion or corruption of some kind.” Id. (quoting Citigroup, 752 F.3d at 294–95).

The Second Circuit held that the district court did not abuse its discretion in concluding that the proposed decree failed the third factor – whether the consent decree reflects a resolution of the original claims. Id. Specifically, Local 580’s persistent failure to comply with court-ordered recordkeeping requirements left critical gaps in the data about referral-hall operations, rendering the economist’s conclusion of race-neutral operations of “limited utility.” Id. The Second Circuit noted that, given a history of over fifty-five-years and multiple contempt orders, the district court reasonably required a more extensive factual record to evaluate whether the proposed settlement addressed the 1971 complaint’s core allegations. Id.

Regarding the public interest analysis, the Second Circuit found that the district court’s first rationale, that entering a favorable judgment despite Local 580’s disregard for recordkeeping mandates could signal to future litigants that court orders may be ignored without consequence, was a permissible public interest consideration independent of agency policy. Id. at *5. However, the Second Circuit noted that the district court’s second rationale, declining to defer to the EEOC’s public interest determination based on the agency’s shifting policy priorities—was likely an error under the Citigroup standard, which instructs courts not to reject settlements based solely on disagreement with agency policy decisions. Id. Ultimately, because the proposed decree still failed the “fair and reasonable” requirement, the Second Circuit affirmed the district court’s denial without needing to reverse on the public interest issue. Id.

Implications For Employers

This decision signals that, in long-running cases – particularly those with a history of noncompliance – district courts may demand more extensive factual showings before approving proposed consent decrees, even when the parties reach an agreement and even when an enforcement agency also supports settlement. Moreover, this decision underscores the importance for employers to ensure strict compliance with all court-ordered recordkeeping requirements, as courts may refuse to approve favorable settlements where mandated records are missing or incomplete, despite the parties’ agreement.

August 28, 2025August 28, 2025 by Gerald L. Maatman, Jr.

Second Circuit Reiterates EEOC’s Expansive Subpoena and Investigative Authority, Even After The Charging Party Files A Lawsuit Based On A Right-to-Sue Letter

By Gerald L. Maatman, Jr., Adam D. Brown, and Gregory S. Slotnick

Duane Morris Takeaways: On August 25, 2025, in United States EEOC v. AAM Holding Corp. (In Re AAM Holding Corp.), 2025 U.S. App. LEXIS 21629 (2d Cir. Aug. 25, 2025), the U.S. Court of Appeals for the Second Circuit affirmed a decision by the Southern District of New York and held the U.S. Equal Employment Opportunity Commission (“EEOC”) retains authority to investigate an EEOC charge even after the EEOC issues the charging party a right-to-sue letter and the charging party subsequently files a lawsuit in court. This ruling significantly expands the scope of the EEOC’s investigative authority in the Second Circuit as it joins the Seventh and Ninth Circuits in allowing pending EEOC investigations to proceed following the agency’s issuance of right-to-sue letters to a charging party who thereafter files suit. The decision is directly at odds with the Fifth Circuit’s holding in EEOC v. Hearst Corp., 103 F.3d 462 (5th Cir. 1997), that the EEOC’s investigative authority ceases upon the charging party’s filing suit pursuant to a right-to-sue letter. The Second Circuit’s opinion follows the more recent trend of courts siding with the EEOC on its assertion of expansive investigative authority and allowing the agency to continue investigating charges despite the charging party’s separate private lawsuit. With the decision, the split in authority now heavily favors the EEOC’s expanded authority, and employers should understand that ongoing EEOC investigations may continue in full force despite the agency’s issuing a right-to-sue letter. Finally, the opinion confirmed that EEOC subpoenas must be construed generously and may properly request extremely broad categories of class-wide documents and information if the EEOC finds it relevant and in the public’s interest to seek same.

Case Background

In March 2022, Eunice Raquel Flores Thomas (“Thomas”), a former dancer who worked at two Manhattan adult entertainment clubs (FlashDancers Midtown and FlashDancers Downtown (together, “the Clubs”)), filed a class-based charge with the EEOC alleging widespread sexual harassment and hostile work environment at both club locations. AAM Holding Corp., 2025 U.S. App. LEXIS 21629, at *3. Thomas claimed she and other women were forced to change clothes in an open back room without doors that was video-monitored, and were pressured to have sex with high-paying repeat customers in champagne rooms, fearing adverse employment actions should they refuse. Id. at *3-4.

Following the EEOC’s initial notification to the Clubs that Thomas filed a charge, the EEOC requested information such as “the clubs’ policies regarding relationships between customers and employees, any records of sexual harassment complaints, and pedigree information for their employees, including each employee’s name, age, sex, race, position, dates of employment, and contact information.” Id. at *4. The Clubs objected to the EEOC’s requests as irrelevant and unduly burdensome to produce, and the EEOC thereafter issued two subpoenas demanding the employee pedigree information, which ultimately led to the EEOC petitioning the District Court for enforcement. Id. at *4-5. The District Court granted the EEOC’s petition and ordered the Clubs to produce the information, explaining that the relevance requirement is a “low bar” and that courts give the term a “generous construction,” allowing access to “virtually any material that might cast light on the allegations against the employer.” Id. at *5 (internal citation omitted). The Clubs eventually filed a notice of appeal to the Second Circuit and moved to stay the enforcement order first in the District Court and then in the Second Circuit, both of which motions were denied. Id. at *5-6.

Meanwhile, in July 2024, while the Clubs’ appeal before the Second Circuit was pending, the EEOC issued Thomas a right-to-sue letter, on the basis of which Thomas filed, in September 2024, a putative class action complaint in the District Court. Id. at *6. The Clubs then argued to the Second Circuit that the EEOC had been divested of its investigative authority (including its ability to issue subpoenas) once Thomas received her right-to-sue letter and filed suit. Id. The Clubs also reiterated their position that the underlying subpoenas’ demand for pedigree information for all club employees (not just Thomas) was overbroad and unduly burdensome. Id.

The Second Circuit’s Decision

The Second Circuit began its opinion by providing background about the investigative process under Title VII. It explained that the EEOC bears primary responsibility for enforcing Title VII under a multistep enforcement procedure that involves the filing of a timely charge, an investigation by the EEOC during the pendency of the charge, and, where appropriate, dismissal of the charge and issuance of a right-to-sue letter authorizing the charging party to pursue litigation. Id. at *6-8.

The Second Circuit also addressed the Clubs’ argument that the EEOC’s investigative authority stops once it issues a right-to-sue letter and the party files suit. Specifically, it addressed the Clubs’ reliance on the Fifth Circuit’s opinion in EEOC v. Hearst Corp., 103 F.3d 462 (5th Cir. 1997), which held that the initiation of a private suit by an aggrieved party marks the end of the investigation stage and thus terminates the EEOC’s investigative authority. Id. at *8-9.

Disagreeing with the Fifth Circuit’s holding in Hearst, the Second Circuit found no support in the text or structure of Title VII, instead citing Title VII’s broad grant of authority to the EEOC, which provides that the agency “‘shall at all reasonable times have access to . . . evidence . . . that relates to unlawful employment practices . . . and is relevant to the charge under investigation.’” Id. at *9 (citing 42 U.S.C. § 2000e-8(a)) (emphasis added). The Second Circuit determined that Title VII did not place any “strict temporal limit” on the EEOC’s authority to issue and enforce subpoenas and obtain evidence through the enforcement process, and that, in fact, the requirement that the EEOC complete its investigation within 120 days applies only “so far as practicable,” which the Court held does not establish “a hard stop.” Id. at *10.

Moreover, the Second Circuit observed that the Supreme Court has held that the EEOC retains independent administrative “responsibility of investigating claims of employment discrimination” and therefore retains the right to file its own civil lawsuit even after the 180-day window, which does not end its responsibility or ability to investigate a charge. Id. at *11 (citing Occidental Life Ins. Co. of Cal. v. EEOC, 432 U.S. 355, 368 (1977)).

The Second Circuit further reasoned that a central part of the EEOC’s “broad public interest and role” in fighting employment discrimination is pursuing the public interest by enforcing the law even when that interest is distinct from or exceeds the private interest of the aggrieved charging party. Id. at *11. It noted the possibility that the EEOC could issue a right-to-sue letter only to have the charging party file suit and settle for nominal damages, a scenario in which, the opinion states, the agency would still be free to continue investigating ongoing unlawful discrimination that may be remedied by unique EEOC mechanisms like conciliation or public litigation. Id. at *12. Those mechanisms also include the EEOC’s ability to initiate class-wide enforcement actions without certification of a class representative under Federal Rule of Civil Procedure 23, as well as its ability to pursue injunctive relief. Id. at *12-13.

Ultimately, the Second Circuit opined on these bases that the EEOC retains its authority to investigate, including issuing and enforcing administrative subpoenas, after it issues a right-to-sue letter and the charging party files a lawsuit. Id. at *13-14. The Second Circuit supported its holding by noting that, “[w]hen the EEOC determines that public resources should be committed to investigating and enforcing a charge, the statutory text unambiguously authorizes it to proceed,” citing to similar holdings (without dissent) in both the Ninth Circuit (EEOC v. Fed. Express Corp., 558 F.3d 842, 854 (9th Cir. 2009) and the Seventh Circuit (EEOC v. Union Pacific Railroad Co., 867 F.3d 843, 850-51 (7th Cir. 2017)). Id. at *13-14 (internal citations and quotation marks omitted).

The opinion also held the EEOC’s subpoena for pedigree information was not overbroad or unduly burdensome. Id. at *14. The Second Circuit determined the District Court did not abuse its discretion in finding that: (i) the materials were relevant to Thomas’s claims of widespread sexual harassment at the Clubs; and (ii) the Clubs failed to show that producing responsive documents and information would be unduly burdensome, rejecting the Clubs’ assertion, without factual detail, that the production would take approximately 300 hours of work. Id. at *15-19.

Implications For Employers

The Second Circuit’s decision means the EEOC’s investigative authority does not end when a charging party requests and receives a right-to-sue letter and thereafter files a suit. Instead, the EEOC may, in its discretion, determine that the public’s interest either diverges from or exceeds the interests of the private charging party and may continue its ongoing investigation by issuing class-wide records and information requests.

Companies must be keenly aware of the EEOC’s broad, ongoing investigatory powers in dealing with the charging party and the EEOC throughout the time after a charge is filed. Employers should also be aware that courts are reluctant to deny the EEOC’s subpoena requests when the agency makes a showing of relevance, which is generously interpreted by courts in the EEOC’s favor. While situations may arise in which the agency’s requests are truly overbroad or unduly burdensome in scope, businesses should assume they will have an uphill battle objecting to or greatly limiting any such requests, even after the charging party files a separate private lawsuit.

August 20, 2025August 20, 2025 by Alex W. Karasik

Second Circuit Rules That The NFL Arbitration Of Race Discrimination Claims Because Arbitration Process Provides Arbitration “In Name Only”

By Alex W. Karasik and Gregory S. Slotnick

Duane Morris Takeaways: On August 14, 2025, in Flores v. N.Y. Football Giants, Inc., No. 23-1185, 2025 U.S. App. LEXIS 20688 (2d Cir. Aug. 14, 2025), the U.S. Court of Appeals for the Second Circuit affirmed a decision from the Southern District of New York denying a motion to compel arbitration of claims of plaintiff Brian Flores (“Flores”) asserting race discrimination filed by the National Football League (“NFL”) and six of its member clubs. In closely examining the arbitration provision at issue (and agreed upon by the parties), the Second Circuit found that the NFL’s internal arbitration framework, which provided the NFL Commissioner with unilateral control over arbitrator selection, substantive process of proceedings, and other discretionary decision-making powers, provided for arbitration “in name only” and fell short of requirements set forth in the Federal Arbitration Act (“FAA”).

According to the Second Circuit, the NFL Commissioner’s complete control over the NFL’s internal arbitrations pursuant to the NFL Constitution makes the process, “inherently biased” and leaves it outside the protections of the FAA. The Second Circuit sternly concluded that, “[u]ltimately, the NFL’s arbitration provision is fundamentally unlike any traditional arbitration provision protected by the FAA,” and the agreement between Flores and the NFL to arbitrate his claims, “is plainly unenforceable under the most basic principles of the effective vindication doctrine,” requiring arbitration guarantee that Flores can “vindicate [his] statutory cause of action in [an] arbitral forum.” Id. at *5. As a result, Flores’s racial discrimination lawsuit will proceed in federal court and the NFL will likely need to go back to the drawing board to update its internal arbitration provisions so they comply with arbitration mandates under the FAA and prior court decisions. All employers seeking to prepare and enforce arbitration provisions should heed the Second Circuit’s concerns with the NFL’s arbitration language and process to ensure their agreements comply with the FAA.

Case Background

Since 2008, Flores – the current defensive coordinator of the NFL’s Minnesota Vikings – has been employed as a football coach by a variety of NFL teams, including the New England Patriots (2008-2018), Miami Dolphins (2019-21), Pittsburgh Steelers (2022), and the Minnesota Vikings (2023-Present). Id. at *5. The operation and structure of the NFL and the relationship between the NFL, its member clubs, and the clubs’ employees (including NFL coaches), are governed by the NFL Constitution and Bylaws (the “NFL Constitution”). Id. at *6. The NFL Constitution “broadly empowers” the NFL Commissioner to manage the league’s affairs, including, but not limited to, the ability to interpret and establish league policy and procedure, discipline relevant parties, hire legal counsel to respond to conduct detrimental to the league, its member clubs or employees, or to professional football, and the full, complete, and final jurisdiction and authority to arbitrate disputes between relevant parties, including between employees and member clubs. Id. Flores’s employment agreement with the Patriots included a club-specific arbitration provision, incorporating by reference arbitration language in the NFL Constitution. Id. at *9-10.

In January 2019, while still under contract as a coach with the Patriots, Flores interviewed to be the head coach of the Denver Broncos. Id. at *9. Flores claims the Broncos discriminated against him because of his race in failing to hire him and that the Broncos only offered him an interview as a “sham” to satisfy the Rooney Rule – a long-standing requirement by the NFL that two opportunities to interview for each open coaching position be allotted to prospective candidates who are members of a racial minority group and/or a woman. Id.

One month later, in February 2019, Flores was hired as the head coach of the Dolphins. Id. In January 2022, Flores was fired following three seasons as head coach of the Dolphins. Id. at *10. After the Dolphins fired him, Flores interviewed for head coach positions with both the New York Giants and the Houston Texans, though he was not hired for either position due to what he alleges to be racial discrimination and retaliation. Id. at *10-11. In February 2022, Flores was hired as a senior defensive assistant and linebackers coach with the Steelers, signing an employment agreement that, like his agreement with the Patriots, included a club-specific arbitration agreement and incorporated by reference the NFL Constitution. Id. at *11. The same month, Flores filed a putative class action against the NFL, the Denver Broncos, New York Giants, and Miami Dolphins alleging claims of race discrimination under 42 U.S.C. § 1981, as well as state and local statutes. Id. at *6. In June 2022, the NFL and its relevant member clubs sought to compel Flores to arbitrate his claims pursuant to the employment agreements Flores signed with the Patriots and Steelers, respectfully. Id. at *7-8.

The District Court found that Flores’s claims against the Broncos and the NFL clearly fell outside his club-specific arbitration agreement with the Patriots. Id. at *10. Although the District Court found that the NFL Constitution’s arbitration provision applied to Flores’s claims, the Court refused to enforce it, reasoning that it was illusory and unenforceable under Massachusetts state law because “the NFL and its member clubs have the unilateral ability to modify the terms of the NFL Constitution.” Id. As such, the District Court ordered that Flores’s claims against the Broncos and related claims against the NFL be litigated in federal court. Id. The NFL’s appeal to the Second Circuit followed.

The Second Circuit’s Decision

The Second Circuit affirmed the District Court’s decision denying the motion to compel Flores to arbitrate his claims against the NFL, the Broncos, the Giants, and the Texans. Id. at *25-26. Specifically, the Second Circuit concluded that Flores’s agreement under the NFL Constitution to submit his claims against the Broncos and the NFL to the unilateral substantive and procedural discretion of the NFL Commissioner (the principal executive of one of Flores’s adverse parties) provides for arbitration “in name only” and lacks the protection of the FAA. Id. at *18. It also held that Flores’s agreement to submit his claims against the Broncos and the NFL to the unilateral discretion of the NFL Commissioner is unenforceable because the agreement fails to guarantee Flores can “vindicate [his] statutory cause of action in [an] arbitral forum.” Id. The decision further confirmed that the District Court did not err or abuse its discretion in denying Defendants’ motion to compel arbitration or in denying Defendants’ motion for reconsideration. Id. at *2.

The Second Circuit provided background on the FAA and its principles mandating that although the FAA establishes a “liberal federal policy favoring arbitration and the fundamental principle that arbitration is a matter of contract,” not every self-described “arbitration agreement” falls within the FAA’s ambit. Id. at *14. Under the facts at issue here, the Second Circuit found that while Flores agreed to arbitrate his statutory claims by way of arbitration provisions in the employment agreement he entered with the Patriots, the relevant language granted the NFL Commissioner unilateral discretion over the arbitration process itself. Id. The Second Circuit held that such one-sided control undermines the fairness required for a valid arbitration agreement under the FAA because the NFL Constitution’s arbitration provision fails to provide: (i) an independent arbitral forum for bilateral dispute resolution, resulting instead in compelling one party (Flores) to submit disputes to the substantive and procedural authority of the principal executive officer of one of their adverse parties (the NFL); and (ii) the procedure to be used in resolving the dispute, instead allowing the NFL Commissioner to unilaterally dictate arbitral procedure. Id. at *19-22. The Second Circuit concluded that “the NFL’s arbitration provision is fundamentally unlike any traditional arbitration provision protected by the FAA,” is not afforded any special deference under the FAA, and that this served as an independent reason to affirm the District Court’s order denying the motion to compel Flores to arbitrate his claims. Id. at *22.

Moreover, the Second Circuit found Flores’s agreement was “plainly unenforceable” under exceptions to the FAA since the arbitration provision “fails to provide Flores access to an arbitral forum” and in fact waives Flores’s right to pursue statutory remedies. Id. at *22-24. It reasoned that requiring Flores to submit statutory claims to the unilateral discretion of the executive of one of his adverse parties (the NFL Commissioner), without an independent arbitral forum, denied Flores arbitration in any meaningful sense of the word, rendering the agreement unenforceable. Id. at *24.

Relying on the foregoing reasoning, the Second Circuit affirmed the District Court’s order, finding: (i) Flores’s agreement under the NFL Constitution to submit his claims against the Broncos and the NFL to the unilateral substantive and procedural discretion of the NFL Commissioner provides for arbitration “in name only,” thus lacking the protection of the FAA; (ii) Flores’s agreement to submit his claims against the Broncos and the NFL to the unilateral discretion of the NFL Commissioner is unenforceable because the agreement fails to guarantee Flores can “vindicate his statutory cause of action in an arbitral forum,”; and (iii) the same unprotected and unenforceable agreement also cannot be used to compel Flores to arbitrate his claims against the Giants, Texans or related claims against the NFL. Id. at *25-26.

Implications For Employers

The Second Circuit’s decision means Flores can continue litigating his race discrimination claims against the NFL and its member clubs in the public eye of federal court, despite the NFL’s attempts to force Flores into its internal private arbitration framework. While the attention-grabbing headline provides Flores a major victory in keeping his race discrimination lawsuit alive, perhaps the most important takeaways are for companies or businesses with an arbitration clause or agreement in effect, as well as employers considering implementing same for employees. Employers must ensure that any arbitration procedures, including arbitral forum and substantive process, comply with the FAA’s mandates to ensure bilateral and objective arbitration for all involved parties.

The Second Circuit repeatedly held that although there was no dispute that both Flores and the NFL member teams signed the employment agreement and agreed to the referenced NFL Constitution’s arbitration provision, a process providing one party with unilateral discretionary control over arbitrator selection and substantive procedure amounts to arbitration “in name only,” and lacks the protection of the FAA. As evidenced by the Second Circuit’s description of the relevant arbitration provision’s shortcomings, businesses seeking to ensure their arbitration agreements are enforceable should have counsel regularly review their existing arbitration language to confirm it is bilateral and objective, thus falling under the FAA’s protection.