457 F. App'x 205
3d Cir.2012Background
- Pinnacle operates casinos; Townsend worked for Pinnacle 2002–2009, rising to CEO.
- 2007 Agreement contained an arbitration clause that survived expiration and covered all issues related to Townsend's employment.
- In 2009, Pinnacle proposed a new two-year agreement with identical arbitration terms; the 2007 Agreement ended April 2, 2009.
- Townsend alleges a final agreement was finalized by September 2009, but Pinnacle terminated her on November 19, 2009.
- Townsend filed suit in New Jersey; Pinnacle moved to compel arbitration; District Court denied due to unresolved factual disputes about which agreement, if any, was in effect.
- The Third Circuit vacates and holds the survival language creates a valid arbitration agreement at termination and remands for entry of an arbitration order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the 2007 Agreement’s survival clause bind post-termination disputes to arbitration? | Townsend argues survival clause makes arbitration apply to post-termination disputes. | Pinnacle contends no agreement was in effect at termination; survival clause cannot bind. | Yes; survival language valid and covers post-termination disputes. |
| Do Townsend's claims fall within the breadth of the arbitration provision? | Dispute relates to employment; broadly within “any controversy” and “all issues.” | Even if broad, survival is needed only if an agreement exists. | Dispute falls within the arbitration provision’s scope. |
| Should the court compel arbitration without resolving which agreement was in effect? | If arbitration is within scope and survival applies, compel. | Need to know which agreement was in effect at termination. | Arbitration should be compelled; survival clause dictates validity. |
Key Cases Cited
- Litton Fin. Printing Div. v. NLRB, 501 U.S. 190 (1991) (arbitration post-termination disputes may arise under the contract when intended)
- Luden’s Inc. v. Local Union No. 6, Bakery, Confectionery & Tobacco Workers Int’l Union, 28 F.3d 347 (3d Cir. 1994) (survival of dispute-resolution provisions possible)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (purpose of arbitration policy; doubts resolved in favor of arbitration)
- Harris v. Green Tree Fin. Corp., 183 F.3d 173 (3d Cir. 1999) (limited review to arbitrability; no merits discussion)
- AT&T Mobility, LLC v. Concepcion, 131 S. Ct. 1740 (2011) (liberal policy favoring arbitration; contracts enforceable as written)
- Century Indem. Co. v. Certain Underwriters at Lloyd’s, London, 584 F.3d 513 (3d Cir. 2009) (FAA governs arbitration; employment contracts fall within FAA)
- John Hancock Mut. Life Ins. Co. v. Olick, 151 F.3d 132 (3d Cir. 1998) (limited review on questions of arbitrability)
- Battaglia v. McKendry, 233 F.3d 720 (3d Cir. 2000) (arbitration clause breadth and scope in contract)