Darrington v. Milton Hershey Sch.

• Decision Date: 06 May 2020
• Docket Number: No. 19-2754,19-2754
• Citation: 958 F.3d 188
• Parties: Bradley G. DARRINGTON; Val Darrington v. MILTON HERSHEY SCHOOL, Appellant
• Court: U.S. Court of Appeals — Third Circuit

958 F.3d 188

Bradley G. DARRINGTON; Val Darrington

v.MILTON HERSHEY SCHOOL, Appellant

No. 19-2754

United States Court of Appeals, Third Circuit.

Argued: April 1, 2020

Filed: May 6, 2020

Casey A. Coyle, Michael D. Jones [Argued], Rachel E. King, Eckert Seamans Cherin & Mellott, 50 South 16th Street. Two Liberty Place, 22nd Floor. Philadelphia, PA 19102, Mark A. Fontana, Eckert Seamans Cherin & Mellott, 213 Market Street, 8th Floor, Harrisburg, PA 17101, Counsel for Appellant Milton Hershey School

Katherine C. Oeltjen [Argued], Fernando I. Rivera, Console Mattiacci Law, 1525 Locust Street, 9th Floor, Philadelphia, PA 19102, Counsel for Appellees Bradley G. Darrington and Val Darrington

Before: GREENAWAY, JR., PORTER, and MATEY, Circuit Judges.

OPINION OF THE COURT

PORTER, Circuit Judge.

Bradley and Val Darrington sued the Milton Hershey School ("MHS"), their former employer, in the District Court for employment discrimination and retaliation. MHS moved to compel arbitration under the collective bargaining agreement ("CBA") it entered into with the Darringtons' Union. The District Court denied the motion. Because the CBA clearly and unmistakably waives a judicial forum for the Darringtons' statutory discrimination claims, we will reverse.

I

MHS is a free, private, non-denominational school that houses and teaches students from diverse social and economic backgrounds. MHS hired the Darringtons to work as full-time houseparents in one of its student homes. While working at MHS, the Darringtons were members of the Bakery, Confectionary, Tobacco Workers & Grain Millers International Local Union 464 ("Union").

A

The Union is "the exclusive collective bargaining representative for all full-time houseparents ... employed by [MHS] ... regarding wages, hours[,] and other terms and conditions of employment." App. 81. Thus, when the Union entered into the CBA with MHS, the CBA bound its members, including the Darringtons.

Section 9.1 of the CBA details the grievances governed by the CBA's arbitration procedure. The CBA's arbitration provision covers "any dispute arising out of [its] terms and conditions," including the "discipline or discharge" of Union members. App. 92. A grievance includes "any dispute alleging discrimination against any [Union members] based upon membership in any protected categories under federal or state law and/or as set forth in Section 10.1 of [the CBA]." Id. Section 10.1 contains the CBA's non-discrimination provision, which states that "[t]he Union and [MHS] will not discriminate against employees or applicants on the basis of race, color, religion, age (40 and above), sex, national origin, disability status, and membership or non-membership in the Union." Id. at 96.

MHS and the Union agreed "that the Union, on behalf of itself and the allegedly aggrieved [Union members], waives, releases[,] and discharges any right to institute or maintain any private lawsuit alleging employment discrimination in any state or federal court regarding the matters encompassed within this grievance procedure." Id. at 93. The CBA "sets forth the exclusive procedure for resolution of disputes arising out of the terms and conditions of [the CBA] or the discipline or discharge of" a Union member. Id.

In short, if aggrieved Union members are unsatisfied with the resolution of their disputes after discussions with MHS officials, "the Union [may seek] further consideration of the grievance" by submitting the grievance to arbitration on their behalf. Id. at 94.

B

In their role as houseparents, the Darringtons attended and participated in religious programming offered by MHS. Throughout their employment, the Darringtons voiced their concern to MHS administrators that some of the programming was discriminatory and offensive. Believing that a chapel service and sermon constituted "child abuse," Bradley Darrington filed a report with the local state agency for children and youth services. App. 24. The Department dismissed the report the next day

Bradley then filed a charge of discrimination with the Equal Employment Opportunity Commission and the Pennsylvania Human Relations Commission alleging that MHS's mandatory religious programming discriminated against him based on his religion. Less than two months after Bradley filed the charges, MHS fired the Darringtons. The Darringtons then filed two more charges of discrimination with the EEOC and the PHRC.

After receiving right-to-sue letters from the EEOC on all three charges, the Darringtons filed a complaint in the District Court alleging discrimination and retaliation in violation of Title VII, 42 U.S.C. § 2000e, et seq. , and the Pennsylvania Human Relations Act, 43 Pa. Stat. §§ 951–63. MHS moved to compel arbitration under the CBA. The District Court denied the motion because it found that the CBA "does not clearly and unmistakably waive [the Darringtons'] right to bring their statutory discrimination [ (including retaliation) ] claims in federal court." App. 10–11. MHS timely appealed.

II

The District Court had subject-matter jurisdiction under 28 U.S.C. §§ 1331 and 1367. We have appellate jurisdiction over orders denying a motion to compel arbitration under the Federal Arbitration Act, 9 U.S.C. § 16(a)(1)(A)–(B). See Harris v. Green Tree Fin. Corp. , 183 F.3d 173, 176 (3d Cir. 1999). We review de novo the arbitrability of the Darringtons' claims. Jones v. Does 1–10 , 857 F.3d 508, 511 n.2 (3d Cir. 2017) (citation omitted).

III

A collective bargaining agreement can waive a judicial forum for union members' statutory claims only if the waiver is clear and unmistakable. See Wright v. Universal Mar. Serv. Corp. , 525 U.S. 70, 79–82, 119 S.Ct. 391, 142 L.Ed.2d 361 (1998). The Supreme Court and this Court have not defined the contours of the clear-and-unmistakable-waiver standard. Using ordinary tools of contract interpretation, we find that the CBA clearly and unmistakably waived the Darringtons' right to a judicial forum for their statutory claims.

A

We must answer "the question of whether the parties agreed to arbitrate." AT&T Tech., Inc. v. Commc'ns Workers of Am. , 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986). And when deciding whether to compel arbitration, we must consider the enforceability and the scope of the contract's arbitration provision. See In re Remicade (Direct Purchaser) Antitrust Litig. , 938 F.3d 515, 519 (3d Cir. 2019) (citation omitted).¹

Thus, we ask "whether the merits-based dispute in question falls within the scope of that valid agreement." Century Indem. Co. v. Certain Underwriters at Lloyd's, London , 584 F.3d 513, 527 (3d Cir. 2009) (citation omitted). The parties dispute only whether the Darringtons' merits-based disputes—their statutory discrimination claims—"fall[ ] within the scope of" the CBA's arbitration provision. See id.²

A federal-statutory-discrimination dispute falls within the scope of a collective bargaining agreement's arbitration provision "when (1) the arbitration provision clearly and unmistakably waives the employee's ability to vindicate his or her federal statutory right in court; and (2) the federal statute does not exclude arbitration as an appropriate forum." Jones , 857 F.3d at 512 (citing 14 Penn Plaza LLC v. Pyett , 556 U.S. 247, 260, 129 S.Ct. 1456, 173 L.Ed.2d 398 (2009) ). Title VII claims are arbitrable. Seus v. John Nuveen & Co. , 146 F.3d 175, 182 (3d Cir. 1998) (collecting cases); see also 14 Penn Plaza , 556 U.S. at 256 n.5, 129 S.Ct. 1456 (suggesting that Title VII claims are arbitrable).

When considering the Darringtons' state-law PHRA claims, we need not consider whether the PHRA excludes arbitration as an appropriate forum. That is so because the FAA preempts "any state rule" that facially or covertly prohibits arbitration. See Kindred Nursing Ctrs. Ltd. P'ship v. Clark , ––– U.S. ––––, 137 S. Ct. 1421, 1426, 197 L.Ed.2d 806 (citing AT&T Mobility LLC v. Concepcion , 563 U.S. 333, 341, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011) ); see also Concepcion , 563 U.S. at 343, 131 S.Ct. 1740 (noting that although the FAA "preserves generally applicable contract defenses, nothing in it suggests an intent to preserve state-law rules that stand as an obstacle to the accomplishment of the FAA's objectives").³

We have not decided whether the clear-and-unmistakable-waiver standard applies to the arbitrability of state law claims—such as those brought under the PHRA. See, e.g. , Maldonado v. SecTek, Inc. , No. 19-693, 2019 WL 3759451, at *6 (E.D. Pa. Aug. 8, 2019). The Supreme Court has said that the FAA preempts state laws that stand "as an obstacle to the accomplishment and execution of the full purposes and objectives" of the FAA. Concepcion , 563 U.S. at 352, 131 S.Ct. 1740. So if a state law for the waiver of a judicial forum provides a more onerous standard than the clear-and-unmistakable-waiver standard, then it is preempted by the FAA.

To answer the question of whether the FAA preempts Pennsylvania law regarding the standard for assessing the waiver of a judicial forum for state statutory rights, we first look to Pennsylvania court decisions in that realm. Based on this Court's review, however, Pennsylvania has not explained what standard governs the waiver of a judicial forum for state statutory claims in a CBA.

Because of the Supreme Court's FAA preemption decisions, we know that Pennsylvania could adopt the clear-and-unmistakable-waiver standard, the most exacting standard possible. As we explain below, even under this standard, the Darringtons waived a judicial forum for their state claims under the PHRA.

The Supreme Court's discussion in Wright supports this conclusion. Wright articulated the clear-and-unmistakable-waiver standard while talking about "statutory claims" generally and not just federal statutory rights. See generally Wright , 525 U.S. at 79–81, 119 S.Ct. 391. We see no reason to review the waiver of a judicial forum for state statutory claims under a standard different from that for the waiver of a judicial...