PHILADELPHIA – A federal appellate court has concurred with its lower court counterpart in denying a motion to compel arbitration in a dispute between a doctoral resident and her former employer.
U.S. Court of Appeals for the Third Circuit judges Thomas M. Hardiman, Paul B. Matey and Anthony J. Scirica agreed with a ruling from the U.S. District Court for the Eastern District of Pennsylvania, in rejecting the arbitration motion from defendants Crozer Chester Medical Center and Dr. Dorian Jacobs, filed in litigation brought by plaintiff Dr. Dina Abdurahman.
Matey authored the Third Circuit’s ruling in this matter.
“CCMC hired Abdurahman as an emergency medical resident. In preparation, Abdurahman signed a stack of new-hire paperwork. Within it, an at-will employment agreement with Crozer Keystone and an arbitration agreement with Prospect Health Access Network. Several weeks later, Abdurahman signed a residency agreement with CCMC,” Matey said.
“Dr. Dorian Jacobs was an employee of Prospect. She also worked as CCMC’s Director of Toxicology and, in that role, supervised Abdurahman. Abdurahman alleged that Jacobs sexually harassed her, while Jacobs claimed the opposite and informed a CCMC Human Resources employee that Abdurahman had assaulted her. The dispute continued to escalate until Abdurahman was fired.”
Abdurahman then filed a complaint with the Pennsylvania Human Relations Commission and the Equal Employment Opportunity Commission, alleging CCMC discriminated against her. After the EEOC issued her a right-to-sue letter, Abdurahman filed a lawsuit in the Commonwealth Court of Pennsylvania against CCMC and Jacobs.
The defendants removed the case to the U.S. District Court for the Eastern District of Pennsylvania and then filed a motion to dismiss, predicated upon on Abdurahman’s arbitration agreement with Prospect. The District Court threw out the dismissal motion, leading CCMC and Jacobs to appeal to the Third Circuit.
“All agree that Prospect, not CCMC, signed the arbitration agreement with Abdurahman. Even so, CCMC argues that it should be able to enforce the agreement for two reasons: agency principles and equitable estoppel. Neither succeeds,” Matey said.
Matey pointed out that no arbitration agreement existed between CCMC and Abdurahman.
“Abdurahman does not bring claims against Prospect, nor does she allege that CCMC’s liability is ‘predicated upon’ Prospect’s conduct. CCMC must show that it was an agent of Prospect – the party ‘bound’ by the arbitration agreement. At best, though, CCMC’s argument shows the reverse – that Prospect acted as CCMC’s agent – and we have never held this is sufficient. Because CCMC was not Prospect’s agent, and a mere agency relationship is insufficient, agency principles do not permit CCMC to enforce the arbitration agreement between Prospect and Abdurahman,” Matey stated.
“CCMC argues that Abdurahman’s claims actually arise under the arbitration agreement. Following the facts backward, CCMC reasons since her employment with CCMC hinged on signing all the paperwork, including the arbitration agreement with Prospect, then everything that happened during her employment relates back to that contract, and into arbitration. That argument borrows from common law causation, not contract. True, at some point, Abdurahman’s employment claims collapse into the moment she accepted her job at CCMC. But her claims are not ‘intimately founded in and intertwined with [any] underlying contract obligation.”
As for the defamation and Pennsylvania Human Relations Act violation claims against Jacobs, Matey and his colleagues found “there is no way to squeeze Abdurahman’s defamation and PHRA claims into the contractual language, so they may proceed in court.”
U.S. Court of Appeals for the Third Circuit cases 20-3459 & 20-3466
U.S. District Court for the Eastern District of Pennsylvania case 2:20-cv-03609
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com