Joshua Silfee v. Automatic Data Processing Inc, 696 F. App'x 576

Plaintiff Joshua Silfee sued ERG Staffing Services alleging Pennsylvania law violations for paying wages via a debit-card system that charged fees.
ERG moved to compel arbitration under Section 4 of the FAA, relying on an arbitration clause in the payroll vendor’s terms and conditions attached to Silfee’s complaint.
The District Court delayed ruling on ERG’s motion to compel arbitration and instead denied ERG’s separate motion to dismiss Silfee’s state-law claim on the merits.
ERG appealed, arguing the court should have resolved arbitrability first because arbitration is a gateway issue under the FAA.
The Third Circuit found the arbitration agreement attached to the complaint authentic and held Guidotti’s Rule 12(b)(6) / Rule 56 framework applied; Silfee produced no additional factual dispute placing arbitrability at issue.
The Third Circuit vacated and remanded because the District Court erred by resolving the merits before deciding the motion to compel arbitration and did not address arbitrability in the first instance.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the District Court erred by ruling on a motion to dismiss before resolving a motion to compel arbitration	Silfee argued the arbitration clause was unenforceable as a matter of law; did not deny receipt/assent or seek discovery	ERG argued the FAA requires courts to decide arbitrability first and compel arbitration when an agreement exists	Court held the District Court erred; arbitrability is a gateway issue and must be decided before merits disposition
Proper procedural standard to assess a motion to compel when an authentic arbitration agreement is attached to the complaint	Silfee argued legal challenges could be resolved without discovery	ERG contended Guidotti’s framework applies and Rule 12(b)(6) is appropriate if no additional facts put arbitration in issue	Court held Guidotti provides a dichotomy: use Rule 12(b)(6) if agreement is facially shown and no additional facts contest it; otherwise limited discovery and Rule 56
Whether the appellate court should decide arbitrability now	Silfee and ERG asked the panel to rule on arbitrability on appeal	ERG urged enforcement of arbitration; Silfee urged denial	Court declined to decide arbitrability on appeal because the District Court never addressed or analyzed the parties’ competing arbitrability arguments; remanded for initial consideration

Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (establishes strong federal policy favoring arbitration)
Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764 (3d Cir. 2013) (sets Rule 12(b)(6) vs. Rule 56 framework for motions to compel arbitration)
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (courts must enforce arbitration agreements where parties agreed)
Reyna v. Int'l Bank of Commerce, 839 F.3d 373 (5th Cir. 2016) (arbitrability is a gateway issue courts should address at outset)
Sharif v. Wellness Int'l Network, Ltd., 376 F.3d 720 (7th Cir. 2004) (once motion to compel filed, court should refrain from further action until arbitrability resolved)
Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469 (9th Cir. 1991) (court’s role is limited to determining arbitrability, leaving merits to arbitrator)
Puleo v. Chase Bank USA, N.A., 605 F.3d 172 (3d Cir. 2010) (Third Circuit exercises plenary review over arbitration agreement validity)