On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 2-09-cv-05781) District Judge: Honorable Anita B. Brody
The opinion of the court was delivered by: Fisher, Circuit Judge.
Argued September 21, 2011
Before: FISHER, HARDIMAN and GREENAWAY, JR., Circuit Judges.
Tenet Healthcare Corporation, along with two of its subsidiaries, appeals from the District Court's denial without prejudice of its motion to compel arbitration. The central issue is whether the District Court erred in finding genuine disputes of material fact that might render the arbitration agreement unconscionable and unenforceable. Finding no such disputes, we will reverse.
Plaintiff and Appellee Janice Quilloin ("Quilloin") is a registered nurse with an associate's degree, who began working at Hahnemann University Hospital in October of 2006. In February 2008, Quilloin resigned to take another job. Later that year, she reapplied for a position at Hahnemann, and was rehired in December 2008. She continued working at Hahnemann until November 2009. Hahnemann University Hospital is owned by Tenet HealthSystem Hahnemann, LLC and managed by Tenet HealthSystem Philadelphia, both subsidiaries of Tenet Healthcare Corporation, a health care services company with subsidiaries operating 55 hospitals with over 14,000 beds, as of December 31, 2008. Tenet Healthcare Corporation, Tenet HealthSystem Hahnemann, LLC and Tenet HealthSystem Philadelphia (collectively "Tenet"), are all Defendants and Appellants in the present action.
On or around the time that Quilloin began her employment, both on October 9, 2006 and on January 5, 2009, she signed the "Employee Acknowledgment" form, which acknowledged receipt of the "Fair Treatment Process" brochure ("FTP"). Quilloin at first claimed that she did not sign a form in October 2006, but only signed in January 2009. However, when Tenet subsequently produced an "Employee Acknowledgement" form signed by Janice Quilloin on October 9, 2006, Quilloin filed a supplemental submission "'acknowledging signing that document' but emphasizing her 'lack of recall' of that act." Quilloin v. Tenet HealthSystem Philadelphia, Inc., 763 F. Supp. 2d 707, 712 n.4 (E.D. Pa. 2011). Quilloin does not now dispute that she signed the Employment Acknowledgement or whether she received the FTP.
Quilloin alleges that she was not informed that she would have to commit to arbitration in order to be employed by Tenet. She also alleges that when she was rehired, she did not remember being previously required to sign the "Employee Acknowledgement" form, and thus, was not expecting to sign it a second time.
The "Employee Acknowledgment" forms that Quilloin signed are only one page long. Although a few words were altered between 2006 and 2009, the differences are minor and not material to this case. Following three paragraphs regarding the employee handbook and standard of conduct, the 2009 Employee Acknowledgement reads:
"I acknowledge that I have received a copy of the Tenet Fair Treatment Process brochure. . . . I hereby voluntarily agree to use the Company's Fair Treatment Process and to submit to final and binding arbitration any and all claims and disputes except 'Excluded Issues' that are related in any way to my employment or the termination of my employment with Tenet. I understand that final and binding arbitration will be the sole and exclusive remedy for any such claim or dispute against Tenet or its parent, subsidiary or affiliated companies or entities, and each of its and/or their employees, officers, directors or agents, and that, by agreeing to use arbitration to resolve my dispute, both the Company and I agree to forego any right we each may have had to a jury trial on issues covered by the Fair Treatment Process. I also agree that such arbitration will be conducted before an experienced arbitrator chosen by me and the Company, and will be conducted under the Federal Arbitration Act and the procedural rules of the American Arbitration Association ('AAA').
I further acknowledge that in exchange for my agreement to arbitrate, the Company also agrees to submit all claims and disputes it may have with me to final and binding arbitration, and that the Company further agrees that if I submit a request for binding arbitration, my maximum out-of-pocket expenses for the arbitrator and the administrative costs of the AAA will be an amount equal to one day's pay (if I am an exempt employee) or eight times my hourly rate of pay (if I am a non-exempt employee), and that the Company will pay all of the remaining fees and administrative costs of the arbitrator and the AAA. I further acknowledge that this mutual agreement to arbitrate may not be modified or rescinded except by a written agreement signed by both me and the Company."
The FTP brochure outlines the internal grievance process culminating in arbitration, as well as the parameters of the arbitration agreement itself. The FTP does not state that claims regarding the validity of the arbitration agreement itself must be arbitrated. Under "Application and Coverage" the brochure states that "[t]he FTP . . . covers all disputes relating to or arising out of an employee's employment with the company or the termination of employment. . . . [except for] those listed in the 'Exclusions and Restrictions' section[.]" Notably, neither party argues that one of the enumerated exclusions or restrictions is applicable here.
The FTP outlines the steps employees are required to follow to resolve disputes, and explains approximately how long Tenet would take to respond to each step in the process:
1. "Submit Dispute to Supervisor[,]" who will "respond . . . as soon as possible, usually within seven calendar days from the date you raised the issue"
2. "Appeal Supervisor's Decision to Department Head[,]" who will "respon[d] . . . as soon as possible, usually within seven calendar days of the date the Department Head receives your completed FTP Dispute Resolution Form"
3. "Appeal Department Head's Decision to Administration[,]" which will "respon[d] . . . as soon as possible, usually within seven calendar days of the date you request review under Step 3"
4. "Appeal administration's decision to FTP Committee[,]" which will "meet as soon as possible, usually within 30 days of your request. . . . [and] promptly . . . decide the issue(s)"
5. "Final and Binding Arbitration"
A limitations clause states that "[a]ny request for arbitration under the FTP must be made within one year after the event giving rise to the dispute. . . . [or], if a longer limitations period is provided by a statute governing your claim, then your claim will be subject to the longer limitations period provided by the statute."
The FTP also includes provisions for fees and remedies. In one clause, the FTP states that "[y]ou and the company will be responsible for the fees and costs of your own respective legal counsel, if any, and any other expenses and costs, such as costs associated with witnesses or obtaining copies of hearing transcripts." In another provision, entitled "Authority of Arbitrator," the FTP states that "[t]he arbitrator has the authority to award any remedy that would have been available to you had you litigated the dispute in court under applicable law." Elsewhere, the FTP states that "no remedies that otherwise would be available to you or the company in a court of law will be forfeited by virtue of the agreement to use and be bound by the FTP."
On December 4, 2009, Quilloin filed suit in the United States District Court for the Eastern District of Pennsylvania, asserting a collective action against Tenet under the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201-19, as well as several state-based class action and common law claims.*fn1 See Quilloin, 763 F. Supp. 2d at 711. In its Answer filed on February 19, 2010, Tenet asserted the existence of an arbitration agreement as an affirmative defense.
On June 10, 2010, Tenet filed a motion to compel compliance with the agreement to arbitrate.*fn2 On July 2, 2010, Quilloin responded, claiming, among other things, that the agreement to arbitrate was unconscionable. Quilloin did not file a motion to dismiss or for summary judgment.*fn3
The District Court issued an order on January 20, 2011, see id. at 735, finding that genuine disputes of material fact remained as to whether the arbitration agreement was enforceable,*fn4 and denying the motion to compel. On February 9, 2011, Tenet ...