Michael Scott v. Education Management Corp, 662 F. App'x 126

Michael Scott and Lamont Jones, Assistant Directors of Admissions at EDMC, received adverse quarterly evaluations in July 2012 and filed EEOC complaints (Jones: race and age; Scott: age).
In Sept–Oct 2012 EDMC announced a company-wide ADR policy that required final, binding arbitration for employment-discrimination claims and stated that continued employment after receipt constituted acceptance.
Both men were notified of the ADR policy by company email in October 2012; each promptly objected (Jones’s attorney emailed EDMC calling the policy illegal) and amended their EEOC complaints to allege retaliation for instituting the ADR policy.
Both employees were later terminated (Jones Jan 2013; Scott Apr 2013), obtained right-to-sue letters, and filed federal discrimination suits (ADEA, Title VII, Pennsylvania common law).
District Courts dismissed both suits with prejudice, concluding the ADR policy was binding because the plaintiffs continued working after receipt; plaintiffs appealed and cases were consolidated.
The Third Circuit reviewed de novo under the summary-judgment standard (cases had gone through discovery) and focused on whether there was a valid mutual assent to arbitrate under Pennsylvania contract law.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiffs agreed to arbitrate employment-discrimination claims	Scott & Jones argued they expressly rejected and protested the ADR policy and therefore did not assent	EDMC argued continuing employment after receipt amounted to implied acceptance of the ADR policy	No — continuing to work did not show assent where plaintiffs promptly and clearly objected; no mutual assent to arbitrate
Whether Pennsylvania law permits implied agreement to arbitrate by continued employment	Plaintiffs: Pennsylvania requires clear, unmistakable, explicit agreement to arbitrate	EDMC: Courts have allowed handbook/policy terms to be accepted by continued performance	Court: Pennsylvania demands clear and unmistakable agreement for arbitration; implied assent insufficient here
Whether district courts properly applied standard (dismissal vs. summary judgment)	Plaintiffs: factual record and discovery required summary-judgment standard	EDMC: sought enforcement of arbitration (dismissal)	Court applied summary-judgment standard (appropriate because discovery completed) and resolved in plaintiffs’ favor on mutual-assent issue
Whether Masoner compels dismissal here	Plaintiffs: Masoner is distinguishable because Masoner plaintiff expressly accepted policy; here plaintiffs expressly rejected it	EDMC: relied on Masoner to support enforcement	Court: Masoner is distinguishable; its facts showed clear acceptance absent here

Puleo v. Chase Bank USA, N.A., 605 F.3d 172 (3d Cir. 2010) (standard of review on arbitration-agreement questions)
Guidotti v. Legal Helpers Debt Resolution, LLC, 716 F.3d 764 (3d Cir. 2013) (summary-judgment standard when arbitrability unclear and discovery complete)
Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3d 156 (3d Cir. 2009) (presumption in favor of arbitration does not apply to existence of agreement; Pennsylvania requires explicit assent)
Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010) (court must decide challenges to the validity of the arbitration agreement before compelling arbitration)
Blair v. Scott Specialty Gases, 283 F.3d 595 (3d Cir. 2002) (question of arbitrability governed by state contract law)
Emmaus Mun. Auth. v. Eltz, 204 A.2d 926 (Pa. 1964) (arbitration agreements must be clear and unmistakable)
Biddle v. Johnsonbaugh, 664 A.2d 159 (Pa. Super. Ct. 1995) (elements of contract formation under Pennsylvania law)