Abdul Jaludi v. Citigroup, 933 F.3d 246

Background

Abdul Jaludi, longtime Citigroup employee, reported that Citigroup mishandled severity‑level one complaint tickets and escalated his concerns; he experienced demotions, transfers, layoff (Feb 2013), and termination (Apr 2013).
Jaludi filed pro se suit asserting RICO and Sarbanes–Oxley (SOX) whistleblower claims; Citigroup moved to compel arbitration relying on arbitration provisions in its 2009 and 2011 Employee Handbooks.
The 2009 Handbook’s arbitration appendix expressly listed SOX claims as arbitrable; the 2011 Handbook (issued after Dodd‑Frank) removed that explicit SOX reference and excluded “disputes which by statute are not arbitrable.”
Dodd‑Frank (2010) amended SOX to render pre‑dispute arbitration agreements covering SOX whistleblower claims invalid and unenforceable.
The district court compelled arbitration of both RICO and SOX claims; on appeal the Third Circuit affirmed arbitration of RICO but reversed the SOX arbitration ruling, holding the 2011 Handbook superseded the 2009 arbitration agreement and excluded SOX claims from arbitration.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Jaludi’s SOX claim must be arbitrated despite Dodd‑Frank	2011 Handbook supersedes 2009; its arbitration appendix excludes statutory non‑arbitrable claims (including post‑Dodd‑Frank SOX), so SOX claim not arbitrable	2009 arbitration agreement still controls for SOX; arbitration appendices are separate and can coexist so SOX remains arbitrable	2011 Handbook supersedes 2009; SOX claim not subject to arbitration
Whether RICO claim is arbitrable	N/A (Jaludi did not dispute arbitrability of RICO on appeal)	RICO falls within broad arbitration clauses; Dodd‑Frank doesn’t invalidate arbitration of RICO	Affirmed: RICO claim subject to arbitration
Governing law for deciding whether later handbook supersedes earlier arbitration agreement	Apply state contract law (Pennsylvania) to determine whether parties agreed to arbitrate	Citigroup urged use of federal law/presumption of arbitrability to favor arbitration	State contract law governs step one (existence of agreement); presumption of arbitrability only applies at step two (scope)
Whether presumption in favor of arbitration requires finding arbitration despite supersession dispute	Presumption should not apply because question is whether there is any agreement to arbitrate (a state‑law formation question)	Presumption favors arbitration and must be negated expressly to find supersession	Presumption of arbitrability does not apply to the threshold supersession question; state law controls

Key Cases Cited

Dig. Realty Tr., Inc. v. Somers, 138 S. Ct. 767 (2018) (context on SOX whistleblower protections and purpose of Sarbanes–Oxley)
First Options of Chi. v. Kaplan, 514 U.S. 938 (1995) (state‑law contract principles govern whether parties agreed to arbitrate)
Century Indem. Co. v. Certain Underwriters at Lloyd’s, London, 584 F.3d 513 (3d Cir. 2009) (two‑step framework: (1) agreement to arbitrate governed by state law; (2) scope analyzed with federal arbitration policy in mind)
CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165 (3d Cir. 2014) (parties may agree to arbitrate some disputes but not necessarily all disputes)
Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287 (2010) (presumption of arbitrability applies only after finding a valid arbitration agreement)
Collier v. Nat’l Penn Bank, 128 A.3d 307 (Pa. Super. Ct. 2015) (later agreement superseded earlier one and eliminated prior arbitration clause)
Applied Energetics, Inc. v. NewOak Capital Mkts., LLC, 645 F.3d 522 (2d Cir. 2011) (later silent or inconsistent agreement can supersede earlier arbitration provision)
Dasher v. RBC Bank (USA), 745 F.3d 1111 (11th Cir. 2014) (applies state contract law to determine whether later arbitration agreement supersedes prior one)
Standard Bent Glass Corp. v. Glassrobots Oy, 333 F.3d 440 (3d Cir. 2003) (appendices incorporated by reference into principal contract)