Alyson Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3rd 156 (3rd Cir. 2009)
In Kirleis v. Dickie, Plaintiff Alyson Kirleis sued her employer law firm alleging sex discrimination, retaliation and hostile work environment claims under federal and state law. Ms. Kirleis was first employed with the firm as a summer associate and continued her employment, and subsequently was promoted to shareholder/director in 2001.
The defendant firm filed a motion with the District Court to Compel Arbitration of Plaintiff’s claims based upon a provision in the firm’s corporate bylaws. The firm relied upon the Federal Arbitration Act (“FAA”) 9 USC section 2, arguing that the bylaws contained an arbitration provision that was valid and enforceable. In opposition to the motion, Plaintiff filed an Affidavit, which stated that she never signed an agreement to arbitrate, and had not received a copy of the bylaws, which the defendant was relying upon. The firm did not refute plaintiff’s allegations. The District Court denied the motion and the firm appealed.
In analyzing the basis of the appeal, the Third Circuit looked to Pennsylvania state law regarding the formation of an enforceable agreement, i.e., an intent to be bound, definite terms to be enforced, and consideration, citing Blair v. Scott Specialty Gases, 283 F. 3d 595, 603 (3d. Cir. 2002). The Defendant argued that as a shareholder/director Plaintiff had constructive knowledge of the bylaws because she received salary and benefits from the firm. In other words, Plaintiff’s compensation and benefits were set by the bylaws and therefore she had knowledge of the arbitration provision as well. The Third Circuit rejected this argument stating that the defendant failed to obtain her consent to be bound. Id. at 163. In particular, the court noted that the facts in Kirleis was distinguished from other cases in that she averred the employer never gave her a copy of the bylaws and she did not signed any agreement to be bound to arbitrate. (Ibid)
The court also rejected the defendant’s argument that the case of Quiles v. Financial Exchange Co., 2005 PA Super. 250 (Pa. Super. Ct. 2005) was not applicable to the facts of the case. Although Quiles signed an acknowledgement of receipt of the employee handbook, which she never received one. The Court noted that the arbitration agreement must be explicit no matter what position the employee holds shareholder/director or otherwise.
In summary, under Pennsylvania law, employers must ensure that all levels of employees sign an agreement to arbitrate and receive a copy of the arbitration agreement in order to be bound.
