Blair v. Scott Specialty Gases

• Citation: 283 F.3d 595
• Decision Date: 13 March 2002
• Docket Number: No. 01-1096.,01-1096.
• Parties: Diane BLAIR, Appellant, v. SCOTT SPECIALTY GASES; Thomas Barford; Jerry Stump.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 595

283 F.3d 595

Diane BLAIR, Appellant, v. SCOTT SPECIALTY GASES; Thomas Barford; Jerry Stump.

No. 01-1096.

United States Court of Appeals, Third Circuit.

Argued November 1, 2001.

Filed March 13, 2002.

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Martha Sperling, Silver & Sperling, Doylestown, PA, Ralph E. Lamar, IV (Argued), Doylestown, PA, for Appellant.

Thomas J. Barton (Argued), James G. Fannon, Drinker, Biddle & Reath, Philadelphia, PA, for Appellees.

Elisabeth S. Shuster, Pennsylvania Human Relations Commission, Harrisburg, PA, for Amicus-Appellant Pennsylvania Human Relations Commission.

Robert J. Gregory (Argued), Senior Attorney, Gwendolyn Young Reams, Associate General Counsel, Philip B. Sklover, Associate General Counsel, Lorraine C. Davis, Assistant General Counsel, Equal Employment Opportunity Commission, Washington, D.C., for Amicus-Appellant Equal Employment Opportunity Commission.

Before: SLOVITER, NYGAARD and CUDAHY,^* Circuit Judges.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Diane Blair brought suit in the United States District Court for the Eastern District of Pennsylvania against Scott Specialty Gases ("Scott"), her former employer, alleging sexual harassment and discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (2001), the Pennsylvania Human Relations Act (PHRA), 43 Pa. Cons. Stat. § 951 et seq. (2001), the Equal Rights provision of the Pennsylvania Constitution, Pa. Const. art. I, § 28, and other state claims. The District Court order on appeal dismissed Blair's complaint without prejudice pursuant to the Federal Arbitration Act (FAA), 9 U.S.C. § 4 (2001), and directed the parties to arbitrate the claims pursuant to the terms of their arbitration agreement, Blair argues on appeal that the arbitration agreement is invalid and unenforceable, and that the agreement violates public policy by requiring the employee to pay one-half of the arbitrator's fees.

I. FACTS AND PROCEDURAL BACKGROUND

Blair was employed by Scott, a producer and supplier of specialty gas products, from January 1995 through March 1999. In April 1997, she became the Plant Manager at the Plumstead Medical Products Division. Blair alleges that during the course of her employment she was subjected to discrimination and harassment based on her gender.

Blair alleges that during her initial interview with one of the Vice-Presidents of Scott, Tom Barford, he told her he would "rather employ a male plant manager, with a couple of kids who lived nearby and wouldn't leave him high and dry in a few months to marry a lawyer or doctor." App. at 66. Blair further alleges that Barford told her that he could not attend the sensitivity training on sexual discrimination and harassment "because he was a `sexist pig' and that if people knew all the things he had done, he would be fired." App. at 67-68. In fact, Blair alleges that after she was hired, Barford demeaned her suggestions during meetings, as well as those of other female staff members, and routinely made sexist references to her, such as "putting tits on a bull" and "putting people in bed together." App. at 67. He allegedly commented on her appearance and choice of clothing, and suggested, for example, that she wear skirts more often to show her legs.

Blair resigned from her position on March 24, 1999, claiming that she could no longer tolerate the harassing work environment. Blair alleges that sometime after she resigned and reported the sexual harassment to Scott management, Barford and another Scott supervisor began to take retaliatory action by spreading rumors around the plant that Blair had engaged in an affair with a female co-worker.

On September 20, 1999, Blair filed an administrative "Charge of Discrimination" with the Equal Employment Opportunity Commission (EEOC) that was cross-filed with the Pennsylvania Human Relations Commission (PHRC). Both the EEOC and PHRC eventually dismissed her complaint.

On July 31, 2000, Blair filed a complaint in the United States District Court for the Eastern District of Pennsylvania alleging sexual harassment, sex discrimination, and constructive discharge under Title VII, the PHRA, the Pennsylvania Constitution, and state common law claims of intentional infliction of emotional distress, defamation, negligent employment, breach of contract, and breach of the covenant of good faith and fair dealing. Scott filed a motion to dismiss, or in the alternative for summary judgment, on the ground that Blair had agreed to submit all claims relating to her employment to binding arbitration. A mandatory arbitration provision had been placed by Scott in an updated employee handbook that was distributed to all employees in February 1998. Blair, who was given the assignment of making sure that all of the Medical Products' employees signed an "Acknowledgment of Receipt and Reading" of the revised handbook, signed such an acknowledgment on February 27, 1998. That acknowledgment stated that she had read the arbitration provision and agreed to submit any disputes arising out of her employment to a final and binding arbitration.

In response to Scott's motion to dismiss based on the arbitration agreement, Blair argued that the arbitration agreement was not a validly formed contract and thus was not binding and, in the alternative, that the agreement should not be enforced on public policy grounds because it required her to pay one-half of the arbitrator's fees.

The District Court granted summary judgment to Scott, and initially dismissed Blair's complaint with prejudice. On Blair's motion for reconsideration, the District Court modified the order to dismiss the case without prejudice pursuant to 9 U.S.C. § 4, and ordered the parties to arbitrate their claims as directed by the arbitration agreement. Blair filed a timely notice of appeal. On November 30, 2000, she also filed for arbitration before the American Arbitration Association (AAA) as directed by the arbitration agreement but requested that the AAA hold her case in abeyance pending the outcome of these proceedings.

II. JURISDICTION

Scott argues, as a threshold matter, that this court does not have jurisdiction on the ground that the District Court's modified order was not final or appealable because it dismissed Blair's claims without prejudice and ordered the parties to arbitrate. Scott argues that the court's order effectively acted as a stay of the proceedings pending the outcome of the arbitration. Under the FAA, a stay is considered an interlocutory order that may not be appealed. 9 U.S.C. § 16(b)(1).

Scott relies on Smith v. The Equitable, 209 F.3d 268 (3d Cir.2000), where we held, on facts similar to the present case, that the dismissal of an employment discrimination case without prejudice with an order to compel arbitration was not a final appealable order. Smith, an African American, brought suit in federal court alleging that the defendant company's decision not to hire him was based on his race in violation of Title VII and the PHRA. Because he had signed a pre-employment contract that included an agreement to arbitrate any employment-related disputes, the district court dismissed Smith's action without prejudice and compelled arbitration. Id. at 270.

On appeal, we noted that under section 16(b) of the FAA, federal courts are expressly barred from taking an appeal of a district court's interlocutory order compelling arbitration. Id. at 271. Section 16 provides:

(a) An appeal may be taken from —

(1) an order —

(A) refusing a stay of any action under section 3 of this title,

(B) denying a petition under section 4 of this title to order arbitration to proceed,

(C) denying an application under section 206 of this title to compel arbitration,

(D) confirming or denying confirmation of an award or partial award, or

(E) modifying, correcting, or vacating an award;

(2) an interlocutory order granting, continuing, or modifying an injunction against an arbitration that is subject to this title; or

(3) a final decision with respect to an arbitration that is subject to this title.

(b) Except as otherwise provided in section 1292(b) of title 28, an appeal may not be taken from an interlocutory order —

(1) granting a stay of any action under section 3 of this title;

(2) directing arbitration to proceed under section 4 of this title;

(3) compelling arbitration under section 206 of this title; or

(4) refusing to enjoin an arbitration that is subject to this title.

9 U.S.C. § 16.

We dismissed Smith's appeal on the ground that it was an interlocutory order directing arbitration to proceed under section 4, and therefore not appealable under 9 U.S.C. § 16(b). We stated that a district court's order in an independent proceeding, one brought by the plaintiff in order to compel arbitration, is considered final and immediately appealable because it addresses the exact relief sought. Smith, 209 F.3d at 271. We contrasted such an order from an order in an "embedded" proceeding, one where the defendant, rather than the plaintiff, moves to compel enforcement of the arbitration agreement as a defense to claims brought before the court. We noted that the latter traditionally had been considered interlocutory and not immediately appealable. Id.

In Smith, we recognized the apparent anomaly of treating these types of proceedings differently but pointed to the rationale we had previously applied "`that an order directing arbitration is interlocutory and, therefore, not appealable if it is made in a lawsuit, such as a suit for damages, in which in the normal course of judicial procedure there will be a later final order or judgment from which an appeal can be taken by a person aggrieved by the prior order to arbitrate.'" Id. at 271 (quoting Zosky v. Boyer, 856 F.2d 554, 558 (3d Cir.1988) (quoting Rogers v. Schering Corp., 262 F.2d 180, 182 (3d Cir.1959))). We stated that the district court's decision to dismiss the proceedings rather than...