Saltzman v. Thomas Jefferson University Hospitals, Inc.
166 A.3d 465
| Pa. Super. Ct. | 2017Background
- Leslie Saltzman, D.O., began working at Jefferson in August 2014 and signed a Physician Service Agreement (employment contract) with Jefferson Medical Care (JMC) that included a broad arbitration clause. Thomas Jefferson University Hospitals, Inc. (TJUH) did not sign the Agreement.
- Saltzman alleges she reported patient-safety wrongdoing (a chiropractor practicing as a physician) to Jefferson in October 2014 and was terminated on November 11, 2014.
- Saltzman sued Jefferson (May 2015) for Whistleblower Law retaliation and wrongful termination. Jefferson filed preliminary objections seeking to compel arbitration under the Agreement.
- The trial court overruled Jefferson’s preliminary objections, finding (1) TJUH was not a party so could not enforce arbitration; (2) the Agreement was an unconscionable contract of adhesion; and (3) arbitration would undermine the Whistleblower Law’s remedial/deterrent public-policy aims.
- Jefferson appealed. The Superior Court reviewed whether a valid arbitration agreement existed and whether Saltzman’s claims fell within its scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid enforceable arbitration agreement exists between Saltzman and Jefferson | Saltzman argued the clause effectively reduces her ability to recover statutory relief and thus cannot vindicate her Whistleblower rights | Jefferson argued the arbitration clause and the AHLA Rules permit the same statutory remedies and fee arrangements, making arbitration adequate | Court held the arbitration agreement is valid and enforceable; AHLA Rules allow statutory remedies and employer payment of arbitrator fees, so vindication argument fails |
| Whether a non-signatory (TJUH) can enforce the arbitration clause | Saltzman claimed TJUH was not a party and therefore could not compel arbitration | Jefferson argued a close nexus between TJUH and JMC permits enforcement by a non-signatory | Court agreed a non-signatory with an obvious and close nexus may enforce the clause; disposition applies to both TJUH and JMC |
| Whether the arbitration clause is an unconscionable contract of adhesion | Trial court found adhesion/unconscionability; Saltzman did not press adhesion on appeal but argued arbitration would limit recovery | Jefferson argued no procedural or substantive unconscionability and presented evidence to rebut adhesion | Court held trial court abused its discretion: Saltzman did not establish unconscionability and Jefferson’s evidence (and AHLA Rules) negate the asserted limitations |
| Whether Whistleblower claims are excluded from arbitration on public-policy grounds | Saltzman and trial court argued the public needs open, public litigation for whistleblower matters and arbitration would frustrate remedial/deterrent goals | Jefferson argued FAA and Pennsylvania precedent favor arbitration absent a generally applicable contract defense; the Whistleblower Law does not mandate judicial forum | Court held public-policy refusal to enforce arbitration was improper: public policy favoring arbitration outweighs generalized public interest in public proceedings; statute’s forum language is permissive |
Key Cases Cited
- Callan v. Oxford Land Dev., Inc., 858 A.2d 1229 (Pa. Super. 2004) (standards for reviewing orders overruling preliminary objections to compel arbitration)
- Highmark Inc. v. Hospital Serv. Ass'n of Northeastern Pa., 785 A.2d 93 (Pa. Super. 2001) (arbitration clauses construed narrowly but arbitrability favored when clear)
- Provenzano v. Ohio Valley Gen. Hosp., 121 A.3d 1085 (Pa. Super. 2015) (non-signatory enforcement via close nexus; WPCL claims subject to arbitration)
- Taylor v. Extendicare Health Facilities, Inc., 147 A.3d 490 (Pa. 2016) (Supreme Court: state courts must enforce arbitration consistent with FAA; only general contract defenses may invalidate arbitration)
- Kindred Nursing Ctrs. Ltd. P'ship v. Clark, 137 S. Ct. 1421 (U.S. 2017) (arbitration agreements can only be invalidated by generally applicable contract defenses)
- Smay v. E.R. Stuebner, Inc., 864 A.2d 1266 (Pa. Super. 2004) (broad arbitration clauses cover tort claims arising from contractual relationship)
- Battaglia v. McKendry, 233 F.3d 720 (3d Cir. 2000) (phrases like "arising under" and "arising out of" are normally given broad construction)