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Piotr Nowak v. Pennsylvania Professional Soccer

September 26, 2012

PIOTR NOWAK
v.
PENNSYLVANIA PROFESSIONAL SOCCER, LLC AND KEYSTONE SPORTS AND ENTERTAINMENT, LLC



The opinion of the court was delivered by: McLaughlin, J.

MEMORANDUM

This case arises out of an employment contract (the "Agreement") entered into on June 1, 2009, between the plaintiff, Piotr Nowak, and Pennsylvania Professional Soccer, LLC (the "Club"). The Agreement permitted the Club to terminate the plaintiff's employment with written notice upon the occurrence of certain for-cause events. On June 13, 2012, the Club invoked its right to terminate Nowak for cause and issued written notice of its intent to do so.

The plaintiff filed this suit against the Club and Keystone Sports and Entertainment LLC, the owner of the Club, (collectively, "Defendants") seeking a declaratory judgment that the defendants failed to satisfy the conditions precedent to terminate his employment for cause under the Agreement.

The defendant moves to dismiss on the grounds that the Agreement has an enforceable arbitration clause. The Court will grant the defendant's motion, compel arbitration, and stay the case pending arbitration.

I. Facts

The parties agree that Article XIII of the Agreement

contains the following arbitration clause: "Any controversy or claim arising out of or relating to this Agreement or the breach hereof, including, without limitation, any claims for wrongful termination or employment discrimination or disputes regarding Manager's right to Severance Payments hereunder, shall be settled by arbitration in accordance with the rules of the American Arbitration Association and under the laws of the State of Pennsylvania (without giving effects to the choice or conflict of law principles thereof); provided, however, that nothing herein shall prevent either party from seeking equitable relief from a court of competent jurisdiction."

II. Analysis

A. The Arbitration Clause Covers the Instant Dispute Pennsylvania law is clear that when "a party to a civil action seeks to compel arbitration, the court must employ a two-part test to determine if arbitration is required." Apollo Metals, Ltd. v. Electroplating Tech. Ltd., No. 06-5245, 2009 U.S. Dist. LEXIS 109382, at *9, (E.D. Pa. Nov. 23, 2009) (citing Keystone Technology Group, Inc. v. Kerr Group, Inc., 824 A.2d 1223, 1227 (Pa. Super. Ct. 2003)). First, it must be determined whether a valid agreement to arbitrate exists, and second, if such an agreement does exist, it must be determined if the dispute involved is within the scope of the arbitration provision. Id.

Here, there is no dispute between the parties that the Article XIII arbitration clause exists in the Agreement, but the parties disagree about whether the instant dispute falls within the scope of the arbitration clause.

The Supreme Court has instructed that "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983).

Here, the language of Article XIII states that disputes "arising out of or related to the Agreement" including those related to "wrongful termination" and "severance pay" shall be settled in arbitration. That language speaks to precisely the type of dispute at issue in the instant case so the only remaining issue to consider is the arguments over whether the plaintiff's declaration judgment action falls under the arbitration clause's exception for equitable relief.

B. The Plaintiff's Declaratory Judgment Action Does Not Fall Under the Exception for Equitable Relief

The law in the Third Circuit is that whether a claim for declaratory judgment is equitable or legal in nature depends on what kind of suit the claim would have been if no declaratory judgment remedy existed. See AstenJohnson, Inc. v. Columbia Cas. Co., 562 F.3d 213, 223-224 (3d Cir. 2009). In AstenJohnson, the Third Circuit found that a ...


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