Summary
rejecting as inaccurate and self-serving plaintiff's argument that her WPCL claims are not subject to arbitration clause in her employment agreement because her WPCL claims do not arise from that contract; holding WPCL depends on existence of contract; WPCL creates no “substantive right to compensation; rather, it only establishes an employee's right to enforce payment of wages and compensation to which an employee is otherwise entitled by the terms of an agreement”; observing WPCL language providing that cause of action may be maintained in any “court of competent jurisdiction” is not dispositive in determining arbitrability of statutory cause of action; party opposing arbitration showed no reason why her WPCL claims were not subject to arbitration clause in her employment agreement
Summary of this case from Provenzano v. Ohio Valley Gen. Hosp.Opinion
CIVIL ACTION NO. 02-9366
October 8, 2003
Memorandum and Order
Plaintiff Corlette Tripp brings an action against defendants Renaissance Advantage Charter School ("Renaissance"), Mosaica Advantage, Inc. ("Mosaica"), and Barbara Forte asserting various federal and state law claims. Presently before the court is defendants' motion to compel arbitration pursuant to 9 U.S.C. § 4. For the reasons that follow, defendants' motion will be denied with respect to counts I and II and granted with respect to counts III-V.
Plaintiff names defendant "Mosaica, Inc." In its motion to compel, Mosaica notes that it changed its name to Mosaica Advantage, Inc. in 2001.
BACKGROUND
This controversy arises out of a school's decision not to renew the contract of one of its instructional assistants. According to Plaintiff, the facts are as follows.
Defendant Renaissance is a charter school in Philadelphia, Pennsylvania, managed and administered by defendant Mosaica. Compl. ¶¶ 2, 3, 8, 9. Forte, also a defendant, has served as the chief administrative officer and director of Renaissance since the commencement of the 2001-02 academic year. Id. ¶ 28.
Plaintiff worked for Renaissance as an instructional assistant from August 1999 to June 2002. Id. ¶ 10. Her employment was governed by the contract she signed with Renaissance, which included an arbitration clause providing that "[a]ll disputes arising out of or concerning this Agreement shall be submitted to binding arbitration." See Advantage Schools, Inc. Instructional Assistant Contract (attached to Complaint as Ex. A). During the time Tripp was employed as an instructional assistant her child attended Renaissance, and during the 2001-02 school year her husband was the president of the Renaissance Parent-Teacher Organization ("PTO"). Compl. ¶¶ 31-32. Tripp served as a teacher's aide and occasional substitute teacher during her three-year tenure at Renaissance; however, problems began to develop between plaintiff and the school administration in late 2001. Id. ¶¶ 15, 23, 33.
Following Forte's assumption of control, plaintiff became concerned with many aspects of the Renaissance school system. These concerns, according to plaintiff, included: some classes contained more than forty students (id. ¶ 36); Forte did not show respect to her staff members or treat them professionally (id. ¶ 40a); Renaissance was not operating in accordance with the principles set forth in its Charter (id. ¶ 40b); the school was housed in old and inadequate facilities and students were not provided with current textbooks (id. ¶ 4Oc-d); many of the teachers at Renaissance were under-qualified and not properly certified (id. ¶ 4Oe-f); Renaissance students were not safe on school property due to the heavy automobile traffic on streets adjacent to the school (id. ¶ 40g); the poor academic performance of Renaissance students suggested that the school's academic standards were in decline (id. ¶ 40h); and the staff was frequently denied lunch breaks and overtime compensation (id. ¶¶ 45, 54).
Plaintiff voiced these concerns to the Renaissance Board of Trustees, through her husband, and to Forte directly, through conversations and letters. Id. at ¶¶ 39-40, 46. Tensions rose, and Tripp was disciplined, received written reprimands, and was given a Final Warning in January, 2002. Id. at ¶¶ 46-47, 53, 55-56. She also received low marks in certain categories on her Instructional Performance Review. Id. ¶ 77. Ultimately, Tripp was informed in June of 2002 that her contract would not be renewed for the following academic year. Id. ¶ 81. Tripp believes that her termination was in retaliation for her criticism of Renaissance policies.
Tripp now claims violation of her First Amendment and 42 U.S.C. § 1983 rights by all defendants, violation of the Pennsylvania Whistleblower Law by Renaissance and Forte, and violations of the Fair Labor Standards Act and the Pennsylvania Wage Payment and Collection Law by Renaissance. Citing the arbitration clause contained in Tripp's employment contract, defendants have moved to compel arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. § 3-4. In her opposition to this motion, plaintiff argues that her claims are not subject to arbitration because they are statutory, rather than contractual. DISCUSSION
Plaintiff raises two other arguments in her opposition, both of which can be disposed of without going into great detail. First, plaintiff contends that the forum selection clause contained in the arbitration clause of her employment contract is unenforceable because it requires the parties to arbitrate all disputes in Boston, Massachusetts. See Pl.'s Memo, of Law in Opp. to Defs' Mots, to Compel Arbitration at 15-18. Defendants, however, have stated to plaintiff and to this court that they agree to arbitrate before the American Arbitration Association in Philadelphia, Pennsylvania. See Def. Mosaica's Mot. to Compel at 3 n. 2. Plaintiff also suggested that any arbitration should take place in Pennsylvania, thus there does not appear to be any real dispute over this matter.
Secondly, plaintiff argues that Forte has no standing to enforce the arbitration clause. It is well-settled, however, that "[t]raditional principles of agency law may bind a non-signatory to an arbitration agreement." E.I. Dupont De Nemours Co. v. Phone Poulenc Fiber Resin Intermediates, S.A.A., 269 F.3d 187, 198 (3d Cir. 2001). In Pritzker v. Merrill Lynch, Pierce, Fenner Smith, Inc., 7 F.3d 1110 (3d Cir. 1993), the Third Circuit found that where a principal is bound to arbitration and the complaints arise out of the agent's conduct on behalf of that principal, the agent is bound by the principal's agreement to arbitrate disputes. 7 F.3d at 1121-22; see also Reibstein v. CEDU/Rocky Mountain Academy, No. CIV. A. 00-1781, 2000 WL 1858718 * 5 (E.D. Pa. Dec. 19, 2000) (citing Dayhoff lnc. v. HJ. Heinz Co., 86 F.3d 1287, 1296-97 (3d Cir. 1996)) ("non-parties to an arbitration agreement can enforce such an agreement only where there is an obvious and close nexus between the non-parties and the contract or the contracting parties".
In this case there is a clear and close nexus between Forte and Renaissance, between Forte and Mosaica, and between Forte and plaintiff. Furthermore, Plaintiff's claims arise in large part out of Forte's alleged conduct. I find, therefore, that Forte has standing to enforce the agreement to arbitrate.
The threshold question of whether a dispute is arbitrable is a matter properly decided by this court. See ATT Techs., Inc. v. Communications Workers of Am., 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986); see also Smith v. Cumberland Group, Ltd., 455 Pa. Super. 276, 687 A.2d 1167, 1171 (1997) (under Pennsylvania law, the question of "whether a party agreed to arbitrate a dispute is a jurisdictional question that must be decided by a court"). Due to the "federal policy in favor of arbitration," however, courts need only engage in a "limited review" to ensure that a dispute is arbitrable. John Hancock Mut. Life Ins. Co. v. Olick, 151 F.3d 132, 137 (3d Cir. 1998) (quotations omitted). The Third Circuit has articulated a "strong presumption in favor of arbitration," holding that "doubts `concerning the scope of arbitrable issues should be resolved in favor of arbitration.'" Great Western Mortg. Corp. v. Peacock, 110 F.3d 222, 228 (3d Cir. 1997) (quoting Moses H. Cone Mem'I Hasp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)).
The Federal Arbitration Act ("FAA"), which applies to the current contract, provides for orders compelling arbitration when one party has failed or refused to comply with an arbitration agreement. See 9 U.S.C. § 4 (1994). When a district court is asked to compel arbitration, its inquiry is two-prong: "(1) Did the parties . . . enter into a valid arbitration agreement? (2) Does the dispute between those parties fall within the language of the arbitration agreement?" Olick, 151 F.3d at 137 (citing In re Prudential Ins. Co. of Am. Sales Practice Litig., 133 F.3d 225, 233 (3d Cir. 1998)). A. Validity and Applicability of the Arbitration Agreement
The FAA applies to any "written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal. . . . 9 U.S.C. § 2 (1994).
This court expresses no opinion regarding the merits of Plaintiff's claims. My inquiry is limited to consideration of the narrow issue of arbitrability, and nothing in this memorandum should be construed as consideration of the substance of Plaintiff's claims.
The first point of inquiry is whether the arbitration agreement contained in Plaintiff's employment contract is valid. The FAA provides that arbitration agreements are enforceable "save upon such grounds as exist at law or equity for the revocation of any contract." 9 U.S.C. § 2. The Third Circuit has interpreted this provision to mean that agreements to arbitrate are "enforceable to the same extent as other contracts." Harris v. Green Tree Financial Corp., 183 F.3d 173, 178 (3d Cir. 1999) (citing Seus v. Nuveen Co., 146 F.3d 175, 178 (3d Cir. 1998)).
The Third Circuit has enunciated the following test to determine whether, under Pennsylvania law, an enforceable contract has been formed: "(1) whether both parties manifested an intention to be bound by the agreement; (2) whether the terms of the agreement are sufficiently definite to be enforced; and (3) whether there was consideration." Atacs Corp. v. Trans World Communications, Inc., 155 F.3d 659, 666 (3d Cir. 1998).
Plaintiff, however, contends that the FAA does not govern the arbitration clause in her employment agreement because "[t]he FAA does not apply to employment contracts." Pl.'s Memo, of Law in Opp. to Defs' Mots, to Compel Arbitration at 4. As defendants point out in their replies, Plaintiff's argument runs contrary to clearly established Supreme Court law. In 2001, the Court held that the FAA governs all employment contracts except those of transportation workers. See Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001); see also Equal Employment Opportunity Comm'n v. Waffle House, Inc., 534 U.S. 279, 389, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002) ("Employment contracts, except for those covering workers engaged in transportation, are covered by the FAA."). Because plaintiff has asserted no other ground upon which this court should find the arbitration clause invalid, and because "federal law presumptively favors the enforcement of arbitration agreements," Harris, 146 F.3d at 178 (citing In re Prudential Ins. Co. of Am. Sales Practice Litig., 133 F.3d at 231), this court is satisfied that the arbitration clause contained within Plaintiff's employment contract is enforceable.
Plaintiff does not assert that she did not intend to be bound by the employment agreement, that the terms of her contract are insufficiently definite to be enforced, or that the agreement lacked consideration. Accordingly, she has not challenged the validity of the agreement on the grounds set forth by Pennsylvania law. See Atacs, supra note 5. Moreover, this court can find no evidence of invalidity in the record.
B. The Scope of the Arbitration Clause
This court's second inquiry asks whether the current dispute falls within the scope of Plaintiff's arbitration clause. The Third Circuit construes the scope of an arbitration agreement broadly: "where the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that' [a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.'" Battaglia v. McKendry, 233 F.3d 720, 725 (3d Cir. 2000) (quoting ATT Techs., 475 U.S. at 650).
Plaintiff's employment agreement provides — under the heading "Arbitration" — that "[a]ll disputes arising out of or concerning this Agreement shall be submitted to binding arbitration." See Advantage Schools, Inc. Instructional Assistant Contract (attached to Complaint as Ex. A) (emphasis added). Plaintiff contends that her claims do not "arise out of or "concern" her employment agreement because they "are based upon purely factual issues regarding Tripp's conduct and the conduct and motives of Renaissance, Mosaica and Forte and their agents." Pl.'s Memo, of Law in Opp. to Defs.' Mot. to Compel Arbitration at 8. The Third Circuit, however, has held that "when phrases such as `arising under' and `arising out of appear in arbitration provisions, they are normally given broad construction." Battaglia, 233 F.3d at 727.
In Battaglia, the Third Circuit considered the scope of a Settlement Agreement's arbitration clause which provided for arbitration "in the event that any controversy arises hereunder" [i.e. under the Settlement Agreement]. Id. at 723. Appellant asserted that such language precluded arbitration of disputes concerning the formation of the agreement, because disputes over events pre-dating the agreement itself could not technically arise under the agreement. Id. at 724-25. Our Court of Appeals, however, found that the language of the arbitration clause was sufficiently broad to encompass earlier disputes as well, noting that federal precedent supports giving a broad interpretation to arbitration clauses. Id. at 727.
With this preference for broad interpretation in mind, I will assess Plaintiff's arbitration clause as it applies to each claim. In determining whether a claim falls within the scope of an arbitration clause, the "focus is on the factual underpinnings of the claim rather than the legal theory alleged in the complaint." Medtronic Ave, Inc. v. Advanced Cardiovascular Sys., Inc., 247 F.3d 44, 55 (3d Cir. 2001) (citing Svedala Indus., Inc., Civ. No. 96-4538, 1996 WL 590861, at *3 (E.D. Pa. 1996), citing, inter alia, Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 622 n. 9, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985)).
At the root of Plaintiff's Section 1983 and First Amendment claims in counts I and n is the allegation that she suffered retaliatory discharge following her public criticism of Renaissance policies. The "factual underpinnings" of this claim include Plaintiff's conversations with the Renaissance Board of Trustees and school administrators, during which she expressed concern about the number of students in each class; the inadequacy of Renaissance' textbooks; the administration's unprofessional treatment of teachers and other staff members; the students' safety; under-qualified teachers; and inadequate facilities. See Compl. ¶¶ 40, 84-106. This concern, according to plaintiff, derived from her role "[a]s both a parent of a student attending Renaissance and an employee of Renaissance." Id. ¶ 34 (emphasis added). Plaintiff also alleges that as a result of her critical comments she was disciplined for failure to comply with several school policies, namely, signing in and out in a timely manner, proper use of accumulated sick days, adherence to an official schedule which included yard duty and classroom monitoring, and professional treatment of coworkers. Id. ¶¶ 46-57; see also id. at Ex. G.
Plaintiff is correct that her constitutional claims are based upon "factual issues regarding [her] conduct and the conduct and motives of [defendants]." Pl.'s Memo, of Law in Opp. to Defs.' Mot. to Compel Arbitration at 8. Her conduct, however, took place in the context of her employment with Renaissance and Mosaica, and thus "arises out of and "concerns" her employment. This court can imagine nothing which "concerns" the employment of an instructional assistant more clearly than a dispute stemming from her alleged failure to report to a particular classroom at a specified time. Moreover, under any reading of the arbitration clause-broad or otherwise — the termination of an individual's employment certainly "concerns" that same employment.
The facts underlying Plaintiff's Whistleblower claim in count HI include her public request for the termination of Forte from the position of school director due to violations of federal and state law, the written rebuttal letter Plaintiff' sent to Forte following receipt of a final warning, a letter to school administrators in which plaintiff detailed the ways in which Renaissance policies violated labor laws, and a memorandum sent by plaintiff to the Board questioning the legality of several of the school's decisions. Compl. ¶ 111. While Plaintiff is correct that her cause of action for these alleged violations of the Pennsylvania Whistleblower Law does not arise out of a right guaranteed by her employment contract, see Pl.'s Memo, of Law in Opp. to Defs.' Mot. to Compel Arbitration at 12, this court's "focus is on the factual underpinnings of the claim rather than the legal theory alleged in the complaint." Medtronic Ave, 247 F.3d at 55. The scenario described by plaintiff in Count III, regardless of its legal label, undoubtedly "concerns" her employment. Moreover, the very statute under which Plaintiff' seeks relief protects employees from discharge or threats "regarding the employee's compensation, terms, conditions, location or privileges of employment." 43 P.S. § 1423(a). Violations of this Act, therefore, necessarily "concern" a Plaintiff's employment.
Plaintiff's argument that her claims under the FLSA in count IV do not arise out of her employment agreement is similarly unavailing. Again, while the cause of action is statutory rather than contractual, the facts giving rise to a claim for violation of federal labor standards necessarily involve a Plaintiff's employment. Indeed, Plaintiff's recitation of the facts giving rise to her cause of action under the FLSA includes a description of her daily work schedule, the frequency with which she was denied a lunch break, and the lack of overtime compensation. Compl. ¶¶ 117-123. This court is convinced that such events "concern" her employment agreement.
Finally, plaintiff alleges that her claims under the Pennsylvania Wage Payment and Collection Law in count V are not subject to arbitration. She points out that because these claims arise from communications among Tripp, Renaissance, and others concerning an increase in compensation, the underlying events occurred after the execution of her employment agreement and therefore "have nothing to do with the employment contract." Pl.'s Memo, of Law in Opp. to Defs.' Mot. to Compel Arbitration at 14. Plaintiff appears to be arguing that any event which transpires after a contract is signed cannot "arise under" that contract. Even setting aside the Third Circuit's broad approach to interpreting the scope of an arbitration clause, Plaintiff's contention defies common logic. Under her approach, no claim could arise under an employment contract because every fact must, technically, take place either before or after the moment in time at which the employment contract is signed. Such a reading makes no sense. Accordingly, this court finds that plaintiff's claims under the Wage Payment and Collection Law "arise under" and "concern" Plaintiff's employment.
Plaintiff also argues, as a general matter, that because her arbitration clause does not specifically state that statutory claims must be arbitrated, her claims under Section 1983, the Pennsylvania Whistleblower Law, the Fair Labor Standards Act, and the Pennsylvania Wage Payment and Collection Law cannot fall within the reach of the agreement. Pl.'s Memo, of Law in Opp. to Defs.' Mot. to Compel Arbitration at 5, 11, 13, 14. In Gilmer v. Interstate/Johnson Lane Corp., however, the Supreme Court held that a broadly-worded arbitration agreement providing for binding arbitration of "any controversy . . . arising out of the employment or termination of employment" included discrimination claims under the Age Discrimination in Employment Act ("ADEA"). Gilmer, 500 U.S. 20, 23, 35, 111 So. Ct. 1647, 114 L.Ed.2d 26 (1991). Despite the fact that the arbitration clause did not specify that statutory claims would be subject to arbitration, the Court stated that "[i]t is by now clear that statutory claims may be the subject of an arbitration agreement, enforceable pursuant to the FAA." Id. at 26. Moreover, the arbitration clause in Plaintiff's employment contract does not in anyway limit arbitrable issues to contractual causes of action.
In light of the Third Circuit's holding that the phrase "arising out of — the very language used in Plaintiff's arbitration clause — should be given "broad construction," Battaglia, 233 F.3d at 727, this court cannot say with the "positive assurance" required of it by the Third Circuit that Plaintiff's claims do not fall within the scope of her agreement to arbitrate.
C. Preemption Arguments
Finally, plaintiff contends that — regardless of whether she agreed to submit to arbitration all statutory claims arising out of her employment — such arbitration is preempted by federal and state statutes. See, e.g., Green Tree Financial Corp. — Ala. v. Randolph, 531 U.S. 79, 90, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000) ("In determining whether statutory claims may be arbitrated, we first ask whether the parties agreed to submit their claims to arbitration, and then ask whether Congress has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue.).
Where Congress has demonstrated its clear intent to preserve judicial remedies for the enforcement of certain statutory rights, an individual cannot contract away her access to a judicial forum. See Gilmer, 500 U.S. at 26 ("[h]aving made the bargain to arbitrate, the party should be held to it unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue") (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985)). The burden is on plaintiff to demonstrate such Congressional intent, which can be found in the statute's text, its legislative history, or in an inherent conflict between arbitration and the underlying purposes of the statute. Id. at 26. I will address each of Plaintiff's statutory claims separately.
1. First Amendment and Section 1983 Claims
Plaintiff argues that she is not required to arbitrate her First Amendment and Section 1983 claims. See Pl.'s Memo, of Law in Opp. to Defs.' Mot. to Compel Arbitration at 5. Despite specifically pointing out that it is her burden to demonstrate Congress's intent to this effect, plaintiff offers nothing from the text or legislative history of 42 U.S.C. § 1983 in support of the position that Congress intended that claims arising under this statute be brought exclusively in a judicial forum. See id. at 5-7. She does, however, cite Hochman v. Board of Education of the City of Newark, 534 F.2d 1094 (3d Cir. 1976), which offers a useful starting point in this court's analysis of whether binding arbitration conflicts with the enforcement of an individual's constitutional rights.
In Hochman, a non-tenured mathematics teacher brought an action against his employer under 42 U.S.C. § 1983, alleging that he was unlawfully terminated in retaliation for exercising his First Amendment rights. Hochman, 534 F.2d at 1095. The district court dismissed his claims for failure to exhaust his administrative remedies, and the Third Circuit reversed, holding that exhaustion of administrative or state judicial remedies cannot be required before an individual may bring a Section 1983 claim. Id. at 1097. More specifically, the Third Circuit found that when an individual alleges "violation of First Amendment rights, as Hochman does here, we may not insist that he first seek his remedies elsewhere no matter how adequate those remedies may be." Id. Hochman was decided in 1976, however, before the Supreme Court found — one by one — a series of statutory claims to be arbitrable notwithstanding evidence of Congressional intent to the contrary. See, e.g., Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985) (enforcing an agreement to arbitrate claims arising under the Sherman Act, 15 U.S.C. § 1-7); Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987) (enforcing an agreement to arbitrate claims arising under § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and claims arising under the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq.); Rodriguez de Quijas v. Shears on/American Express, Inc., 490 U.S. 477, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989) (enforcing an agreement to arbitrate claims arising under § 12(2) of the Securities Act of 1933, 15 U.S.C. § 771(2)); Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991) (enforcing an agreement to arbitration claims arising under the ADEA); Green Tree Financial Corp. — Ala. v. Randolph, 531 U.S. 79, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000) (holding that arbitration is a suitable forum in which to resolve claims under the Truth in Lending Act). In light of the Supreme Court's embrace in recent decades of this "liberal federal policy favoring arbitration agreements," Moses H. Cone Mem'l Hasp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), this court's inquiry must extend beyond Hochman.
Because plaintiff has offered nothing from the text or legislative history of Section 1983 in support of her argument, the question before this court is whether the fundamental purposes of Section 1983 would be abrogated by the resolution of constitutional claims through arbitration. Because the Civil Rights Act of 1871 pre-dates the FAA, an analysis of the statute's legislative history is unlikely to reveal an overt intent, by Congress, to preclude waiver of judicial remedies. The Congress which passed the Civil Rights Act of 1871 most likely never considered whether arbitration provides an appropriate forum for resolution of constitutional claims. The Supreme Court, however, has had several occasions to opine upon the nature and purpose of Section 1983.
In Burnett v. Grattan, the Court considered whether a state statute of limitations for administrative resolution of employment discrimination complaints could be applied to actions brought under the Reconstruction-Era Civil Rights Acts. 468 U.S. 42, 43, 104 S.Ct. 2924, 82 L.Ed.2d 36 (1984) (including actions brought under 42 U.S.C. § 1981, 1983, 1985, 1986, and the Equal Protection Clause of the Fourteenth Amendment). To determine the appropriate statute of limitations, the Court endeavored to "effectuate Congress' purpose in enacting the Civil Rights Acts," a task which necessarily involved, as a threshold matter, ascertaining the purpose of these statutes. Id. at 50. The Court found as follows:
In the Civil Rights Acts, Congress established causes of action arising out of rights and duties under the Constitution and federal statutes. These causes of action exist independent of any other legal or administrative relief that maybe available as a matter of federal or state law. They are judicially enforceable in the first instance.Id. (emphasis added). The Court went on to note that the "dominant characteristic of civil rights actions [is that] they belong in court." Id. (citing McDonald v. West Branch, 466 U.S. 284, 290, 104 S.Ct. 1799, 80 L.Ed.2d 302 (1984)). Moreover, in determining the appropriate statute of limitations for such actions, the Court noted the need to "[a]ssur[e] the full availability of a judicial forum." Id. While the Court's holding in Burnett was limited to the determination that a Maryland state statute of limitations for employment discrimination claims in the administrative setting was inapplicable to claims under Section 1983 and other Reconstruction-Era Civil Rights statutes, id. at 55, its reasoning applies with equal force to the situation before this court, insofar as it emphasizes the need for such claims to be "judicially enforceable in the first instance."
Also in 1984, the Court held that a police officer's Section 1983 claim for violation of his First Amendment rights was not precluded by an unappealed arbitration award pursuant to his collective bargaining agreement. McDonald v. West Branch, 466 U.S. 284, 104 S.Ct. 1799, 80 L.Ed.2d 302 (1984). While the Court's conclusion that "an arbitration proceeding cannot provide an adequate substitute for a judicial trial" in a § 1983 action was based in part upon the conflicting interests of an individual and a union — a consideration absent from the current case — the Court also found that arbitration is a fundamentally inappropriate forum for the resolution of constitutional claims:
Because § 1983 creates a cause of action, there is, of course, no question that Congress intended it to be judicially enforceable. Indeed, . . . he very purpose of § 1983 was to interpose the federal courts between the States and the people, as guardians of the people's federal rights — to protect the people from unconstitutional action under color of state law.' And, although arbitration is well suited to resolving contractual disputes, . . . it cannot provide an adequate substitute for a judicial proceeding in protecting the federal statutory and constitutional rights that § 1983 is designed to safeguard.Id. at 290 (citations omitted) (emphasis added). Accordingly, the Court held that an individual must have the opportunity to bring his Section 1983 claims in court regardless of the availability of an arbitral forum. Id. at 292.
Like Burnett, the holding of McDonald has limited applicability to the case at bar. The current case does not raise questions of collateral estoppel, nor does it involve a collective bargaining agreement. McDonald does, however, offer insight into the Supreme Court's tendency to categorize constitutional claims brought under Section 1983 as uniquely judicial.
The presence of a collective bargaining agreement colors a court's analysis because a union's interests are not always best served by pursuing the individual interests of its members. As the Supreme Court noted in McDonald, a "union's interests and those of the individual employee are not always identical or even compatible. As a result, the union may present the employee's grievance less vigorously than would the employee. Thus, were an arbitration award accorded preclusive effect, an employee's opportunity to be compensated for a constitutional deprivation might be lost merely because it was not in the union's interest to press his claim vigorously." 466 U.S. at 291.
Four years later, the Supreme Court reiterated its belief that "§ 1983 provides `a uniquely federal remedy against incursions . . . on rights secured by the Constitution and the laws of the Nation.'" Felder v. Casey, 487 U.S. 131, 139, 108 S.Ct. 2302, 101 L.Ed.2d 123 (1988) (emphasis added). Felder involved a Wisconsin notice-of-claim statute which required individuals bringing a cause of action against any government entity or officer to notify the governmental defendant of the underlying events and the amount sought before bringing suit. Id. at 134. The statute also required that a prospective plaintiff wait 120 days after giving notice before filing suit. Id. Reaffirming its pronouncement in Burnett that civil rights actions necessarily "belong, in court" the Supreme Court noted that "the principal remedy Congress chose to provide injured persons [under § 1983] was immediate access to federal courts." Id. at 148, 147 (emphasis in each original). Accordingly, the Supreme Court held that Wisconsin's notice-of-claim statute, despite the de minimis exhaustion requirement it imposed, placed an impermissible condition upon the vindication of federal rights under Section 1983. Id. at 153.
The Third Circuit also had occasion to consider the propriety of arbitrating an individual's Section 1983 claims. In Hohe v. Casey, the Third Circuit upheld a facial challenge to portions of the Pennsylvania Public Employee Relations Act. 956 F.2d 399 (3d Cir. 1992). The Act included a fair share fee agreement, under which costs of collective bargaining would be deducted from the pay of non-union employees. Section 575(g) of the Act, however, required that any challenges to the fair share fee by non-union members be resolved in final and binding arbitration. Because fair share fee challenges involve First Amendment rights, the Third Circuit found that they "are unquestionably constitutional challenges." Id. at 408. As a result, the effect of the Act was to require binding arbitration of constitutional claims by employees who were not members of the union.
The Third Circuit held that the Pennsylvania legislature cannot require individuals to bring Section 1983 claims to arbitration. Id. at 409. Although the Act's arbitration provision referred to "final and binding" arbitration, the Court concluded that any arbitration — whether as a prerequisite to judicial relief, as in the form of an exhaustion requirement, or as an alternative to judicial relief, as in the form of final and binding arbitration — was impermissible. Id. at 408-09. Noting that exhaustion requirements do not apply to Section 1983 claims pursuant to Patsy v. Bd. of Regents of FIa., 457 U.S. 496, 516, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982), the Third Circuit found that the Act's arbitration provision, which amounted to both an exhaustion requirement and a mechanism precluding Section 1983 plaintiffs from accessing a judicial forum, was invalid. Id. at 409.
This series of cases reveals the intense skepticism with which courts have viewed arbitration of constitutional claims. None of these cases, however, has taken up the specific question of whether an individual can contract away the right to bring Section 1983 claims in court. While it is clear from Hohe that a state statute cannot prevent this type of judicial access, it is an unanswered question whether an individual can contract to arbitrate Section 1983 claims in the same way that she can contract to arbitrate statutory claims under the ADEA, Sherman Act, Securities Act, or Title VIL Because the Supreme Court has repeatedly emphasized that "the dominant characteristic of Section 1983 claims [is that] they belong in court," this court finds that it would dilute the effectiveness of Section 1983 to require such claims to be resolved in binding arbitration because of an employment contract to do so. Accordingly, an inherent conflict exists between the purposes of Section 1983 and arbitration. Plaintiff's arbitration clause is therefore unenforceable with respect to her First Amendment and Section 1983 claims in counts I and LI.
2. Whistleblower Law Claims
Plaintiff next contends that her claims under the Pennsylvania Whistleblower Law, 43 P.S. § 1421 et seq., are not preempted by the arbitration clause in her employment contract. See PL's Memo, of Law in Opp. to Defs.' Mot. to Compel Arbitration at 9.
The "burden of establishing that Congress meant to preclude arbitration for a statutory claim rests with the party who seeks to avoid arbitration." Johnson v. West Suburban Bank, 225 F.3d 366, 370-71 (3d Cir. 2000) (citing Gilmer, 500 U.S. at 26). Despite the Supreme Court's directive that any party seeking to avoid arbitration of statutory claims support such a position with evidence of Congressional intent, see Gilmer, 500 U.S. at 26, plaintiff instead discusses the arbitration of whistleblower claims in cases involving collective bargaining agreements under the Railway Labor Act. See PL's Memo, of Law in Opp. to Defs.' Mot. to Compel Arbitration at 9-10. Because plaintiff has not satisfied her burden of demonstrating that the Pennsylvania legislature specifically intended claims under the Whistleblower Protection Act to be resolved judicially, this court's inquiry is a limited one.
Plaintiff's argument appears to rest upon the theory that because claims under the Whistleblower Act are statutory, rather than contractual, they are not subject to arbitration. See Pl.'s Memo, of Law in Opp. to Defs.' Mot. to Compel Arbitration at 11 ("None of these claims require this Court to interpret the employment contract, since they arise solely from state statutory law and not any entitlement provided by the employment contract."). While the Whistleblower Act can provide protection to public employees against retaliation beyond the protection they might otherwise have contracted for, the mere fact that a statute imposes a higher standard is not dispositive in determining whether claims under such a statute are arbitrable. Indeed, the Supreme Court has held that "federal statutory claims can be appropriately resolved through arbitration, and we have enforced agreements to arbitrate that involve such claims." Randolph, 531 U.S. at 89.
Section 1424(a) of the Pennsylvania Whistleblower Law provides that "[a] person who alleges a violation of this act may bring a civil action in a court of competent jurisdiction for appropriate injunctive relief or damages, or both, within 180 days after the occurrence of the alleged violation." 43 P.S. § 1424(a). The inclusion of the term "court," however, does not indicate that the Pennsylvania General Assembly intended to exclude claims under this statute from arbitration. In Mitsubishi Motors, the Supreme Court compelled arbitration of an antitrust claim under the Sherman Act. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 640, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985). Like the Pennsylvania Whistleblower Law, the Sherman Act contained an enforcement section which provides that suits may be brought in "any district court of the United States." 15 U.S.C. § 15. The use of the term "court," however, did not prevent the Court from compelling arbitration of the statutory claims at issue in Mitsubishi. Instead, the court emphasized that arbitration offers a perfectly adequate means of dispute resolution:
[C]oncern for statutorily protected classes provides no reason to color the lens through which the arbitration clause is read. By agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum. It trades the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration.Id. at 628.
Because plaintiff's claims under the Whistleblower Act concern her employment, and because she has offered no evidence that the Pennsylvania legislature intended such claims to be resolved exclusively in the judicial forum, this court can see no reason why such claims should not be submitted to arbitration in accordance with the terms of Plaintiff's employment contract. Accordingly, defendants' motion to compel arbitration of Plaintiff's claim for relief pursuant to 43 P.S. § 1421 et seq. will be granted.
3. FLSA Claims
Plaintiff contends that her claims under the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., are not subject to arbitration. Pl.'s Memo, of Law in Opp. to Defs.' Mot. to Compel Arbitration at 12. Although the Third Circuit has not determined whether agreements to arbitrate FLSA claims are enforceable under the FAA, both Judge Pollak in this district and the United States Court of Appeals for the Sixth Circuit have specifically addressed this issue.
In Giordano v. Pep Boys-Manny, Moe Jack, Inc., the court considered whether a former employee was required to arbitrate FLSA claims against his employer pursuant to an arbitration agreement. Giordano v. Pep Boys-Manny, Moe Jack, Inc., No. CIV. A. 99-1281, 2001 WL 484360, *1 (E.D. Pa. March 29, 2001). Judge Pollak found that the FLSA does not override the FAA's presumption in favor of enforcing arbitration:
While Congress is free to mandate that actions arising under particular statutes be heard in a judicial, as opposed to an arbitral, forum, there is little to suggest that Congress intended to exempt FLSA claims from the requirements of the FAA. Therefore, agreements to arbitrate FLSA claims are enforceable pursuant to the FAA.Id. at *4. The Sixth Circuit has come to the same conclusion. See Floss v. Ryan's Steak Houses, Inc., 211 F.3d 306, 313 (6th Cir. 2000) (finding that because no conflict exists between the purposes of the FLSA and arbitration, arbitration is generally a suitable forum for resolving FLSA claims).
Plaintiff argues that the Supreme Court's opinion in Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 302 (1984), compels the opposite conclusion. In Gilmer, however, the Supreme Court distinguished the issue in Barrentine and similar cases from the question of whether an agreement to arbitrate statutory claims is enforceable:
First, [Barrentine] did not involve the issue of the enforceability of an agreement to arbitrate statutory claims. Rather, [it] involved the quite different issue whether arbitration of contract-based claims precluded subsequent judicial resolution of statutory claims. . . . Second, because the arbitration in those cases occurred in the context of a collective-bargaining agreement, the claimants there were represented by their unions in the arbitration proceedings. An important concern therefore was the tension between collective representation and individual statutory rights, a concern not applicable to the present case. Finally, those cases were not decided under the FAA, which, as discussed above, reflects a `liberal federal policy favoring arbitration agreements.' Therefore, those cases provide no bases for refusing to enforce Gilmer's agreement to arbitrate his ADEA claim.Gilmer, 500 U.S. at 35. Plaintiff's reliance on Barrentine is misplaced, and provides no basis for refusing to enforce her agreement to arbitrate FLSA claims. Furthermore, plaintiff has offered no reason why claims under the FLSA are distinct from claims under the ADEA, RICO, the Sherman Act, and other federal statutes — all of which have been held subject to mandatory arbitration clauses. Accordingly, defendants' motion to compel arbitration of Plaintiff's claim for relief pursuant to 29 U.S.C.A. § 201 et seq. will be granted.
4. Wage Payment and Collection Law Claims
Pennsylvania's Wage Payment and Collection Law, 43 P.S. § 260.1 et seq., creates a cause of action by which employees can enforce payment of wages due. Plaintiff contends that her claims under this statute are not subject to the arbitration clause in her employment contract because they do not arise out of that contract. The statute, however, is dependent upon the existence of an employment agreement: "[t]he WPCL `does not create an employee's substantive right to compensation; rather, it only establishes an employee's right to enforce payment of wages and compensation to which an employee is otherwise entitled by the terms of an agreement ." Hartman v. Baker, 766 A.2d 347, 352 (Pa.Super. 2000) (citing Banks Engineering Co., Inc. v. Polons, 697 A.2d 1020, 1024 (Pa.Super. 1997) appeal granted 550 Pa. 715, 706 A.2d 1210 (1998) (citation omitted)). Plaintiff's contention that her WPCL claims "have nothing to do with the employment contract" is therefore inaccurate and self-defeating. By virtue of being raised under the WPCL, a claim necessarily has everything to do with an employee's contract.
Plaintiff also points to Section 260.9 of the WPCL, which provides that causes of action may be maintained in any "court of competent jurisdiction." As I stated in my discussion of Plaintiff's Whistleblower Law claims, this language is not dispositive in determining the issue of arbitrability of statutory causes of action. Accordingly, plaintiff has shown no reason why her claims under the Wage Payment and Collection Law are not subject to arbitration. Defendants' motion to compel arbitration of claims pursuant to P. S. § 260.1 et seq. will be granted.
CONCLUSION
Defendants' motion to compel arbitration will be denied with respect to counts I and II, and granted with respect to counts III, IV, and V. An appropriate order follows.
ORDER AND NOW, ___ this day of October, 2003, upon consideration of the motion of Mosaica, Inc. to compel arbitration (Document No. 14), the joinder of Barbara Forte, the motion of defendant Renaissance Advantage Charter School in support of the motion to compel arbitration, Plaintiff's reply and the responses of defendants Renaissance and Mosaica, IT IS HEREBY ORDERED that:
1. The motion is GRANTED as to counts III, IV and V of Plaintiff's complaint, the parties are ordered to arbitrate the matters contained in said counts, and counts III, IV and V are DISMISSED WITHOUT PREJUDICE.
2. The motion is DENIED as to counts I and II of plaintiff s complaint.
3. A status conference as to counts I and II of the complaint is SCHEDULED for
October 24. 2003 at 2:00 p.m. in Courtroom 14-B.