July 22, 2019

July 22, 2019

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Fifth Circuit Affirms Orde Compelling Arbitration of Employment Discrimination Claims by Physician Against Medical Center

Plaintiff, an emergency room physician, was employed by Defendants, a hospital and its affiliates, pursuant to an employment agreement and subsequent independent contractor agreement, both of which contained an arbitration clause providing for the arbitration of disputes arising out of those agreements. Following the termination of her employment, Plaintiff filed suit in the Northern District of Mississippi alleging claims under Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act, as well as several state law claims including wrongful termination, intentional interference with contract, intentional interference with business relations, and fraud. Defendants filed a motion to compel arbitration, which the district court granted, rejecting Plaintiff’s arguments that the arbitration requirements were unconscionable, that further discovery was required, and that her wrongful termination claims were not subject to arbitration.

On appeal, the Fifth Circuit agreed with the district court and consequently affirmed, compelling arbitration of Plaintiff’s claims. Concerning Plaintiff’s procedural unconscionability allegation, the panel rejected Plaintiff’s claim that the inconsistency between the term sheet (which did not mention the arbitration provision) and the employment agreements (which contained the arbitration provision) rendered the arbitration provision unconscionable, deeming it “an issue that would have been remedied by simply reading the contract.” The panel also rejected Plaintiff’s argument that the arbitration clause was rendered substantively unconscionable due to the fact that the parties conceded that another provision in the employment agreement, the punitive damages waiver, was unconscionable. Instead, the panel found that the punitive damages waiver provision was severable and therefore the arbitration provision was unaffected. In addition, the panel found that Plaintiff’s wrongful termination claim was predicated on her contractual relationship with Defendants and therefore arose “out of” or “under” those contracts and subject to arbitration. Last, the panel rejected Plaintiff’s equitable estoppel argument that her tort claims against her supervising physician were not subject to arbitration because he was a non-signatory to the agreements containing arbitration provisions. The Panel reasoned that those claims similarly centered around interference with her contractual, employment relationship with Defendants. Begole v. North Mississippi Med. Ctr. Inc., Case No. 18-60369 (5th Cir. Feb. 7, 2019).

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About this Author

Gail Jankowski, Carlton Fields, Litigation lawyer

Gail Jankowski’s practice focuses on complex civil litigation and regulatory matters in the insurance and financial services industries in federal and state courts and in arbitration and mediation proceedings.  She has experience with matters involving breach of contract, unfair competition and deceptive trade practices, employment classification, consumer financial protection laws, and cybersecurity and privacy.

Prior to joining the firm, Gail worked as a judicial intern for the Circuit Court of Cook County, Illinois and for the U.S. Department...