Patrice Kantz v. AT&T Inc ( 2022 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 21-1620
________________
PATRICE KANTZ,
ON BEHALF OF HERSELF
INDIVIDUALLY AND ON BEHALF
OF THOSE SIMILARLY SITUATED
v.
AT&T, INC.; AT&T SERVICES, INC.,
Appellants
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(No. 2-20-cv-00531)
District Judge: Honorable J. Curtis Joyner
________________
Submitted under Third Circuit LAR 34.1(a)
on January 13, 2022
Before: AMBRO, BIBAS, and ROTH, Circuit Judges
(Opinion filed: February 10, 2022)
OPINION *
*
This disposition is not an opinion of the full Court and, under I.O.P. 5.7, is not binding
precedent.
ROTH, Circuit Judge
In 2012, AT&T employee Patrice Kantz became a party to a voluntary arbitration
agreement covering any claims she might have against AT&T. Seven years later, AT&T
reduced its workforce and terminated Kantz. AT&T offered severance benefits to Kantz
in exchange for a release of claims. She accepted these benefits and executed a general
release and waiver. Kantz then brought a putative collective action against AT&T for
violations of the Age Discrimination in Employment Act (ADEA). AT&T asked the
District Court to compel individual arbitration and stay proceedings under the 2012
Arbitration Agreement. The District Court denied AT&T’s request, finding that the 2019
General Release superseded the 2012 Arbitration Agreement.
Because the District Court correctly interpreted the 2019 General Release, we will
affirm its decision denying AT&T’s motion to compel arbitration.
I
In December 2011, AT&T sent Kantz an email titled “Action Required:
Arbitration Agreement.” 1 The email explained, “AT&T has created an alternative
process for resolving disputes between the company and employees. Under this process,
employees and the company would use independent, third-party arbitration rather than
courts or juries to resolve legal disputes.” 2 AT&T made clear that “[t]he decision on
1
Appx. 103.
2
Appx. 88.
2
whether or not to participate [in the arbitration agreement] is yours to make” and that
“[i]f you do not opt out by the deadline, you are agreeing to the arbitration process as set
forth in the [Arbitration] Agreement.” 3 The Agreement applied
to any claim that you may have against any of the following: (1) any AT&T
company, (2) its present or former officers, directors, employees or agents in
their capacity as such or otherwise, (3) the Company’s parent, subsidiary and
affiliated entities, and all successors and assigns of any of them; and this
agreement also applies to any claim that the Company or any other AT&T
company may have against you. 4
The Arbitration Agreement covered, among other claims, ADEA claims and claims
“arising out of or related to your employment or termination of employment with the
Company.” 5 The Arbitration Agreement also purported to “survive[ ] after the
employment relationship terminates.” 6 After receiving a reminder email from AT&T,
Kantz accessed the Arbitration Agreement, clicked the “Review Completed” button, and
never opted out.
In January 2019, AT&T announced a workforce reduction. As part of the
reduction, AT&T decided to let Kantz go. AT&T offered Kantz a severance package,
which included the requirement that “to be eligible to receive benefits . . . you must
acknowledge the provisions of the” General Release and Waiver AT&T provided. 7 The
2019 General Release stated that it
set forth the entire agreement between me and the Companies concerning
termination of my employment. Any other promises or representations,
3
Appx. 88.
4
Appx. 90.
5
Appx. 90–91.
6
Appx. 91.
7
Appx. 164.
3
written or oral, are replaced by the provisions of this document and are no
longer effective unless they are contained in this document. 8
The General Release did not include an arbitration clause. Kantz accepted AT&T’s
severance package and signed the General Release.
Kantz later sued AT&T in federal court for violating the ADEA. AT&T asked the
District Court to compel arbitration under the 2012 Arbitration Agreement. The District
Court denied AT&T’s request. It concluded that it “cannot compel arbitration because
the General Release, which did not include an agreement to arbitrate, superseded the
[Arbitration Agreement].” 9 According to the District Court, this was because “[t]he
[G]eneral Release and the [Arbitration Agreement] are ‘agreements between the same
parties as to the same subject matter,’” Thus, the 2019 general release superseded the
2012 Arbitration Agreement. 10 AT&T appealed.
II
The District Court had subject-matter jurisdiction under 28 U.S.C. § 1331. We
exercise jurisdiction over AT&T’s interlocutory appeal under 28 U.S.C. § 1291 and the
Federal Arbitration Act, which provides that “an appeal may be taken from an order
denying a petition to compel arbitration.” 11
8
Appx. 137.
9
Appx. 13.
10
Appx. 13 (quoting Jaludi v. Citigroup, 933 F.3d 246, 256 (3d Cir. 2019)).
11
O’Hanlon v. Uber Technologies, Inc., 990 F.3d 757, 762 (3d Cir. 2021) (quoting 9 U.S.C.
§ 16(a)(1)(B) (cleaned up)).
4
“We exercise plenary review of the District Court’s order on a motion to compel
arbitration.” 12
We use the standard for summary judgment under Federal Rule of Civil
Procedure 56(a) when reviewing the underlying motion ‘because the district
court’s order compelling arbitration is in effect a summary disposition of the
issue of whether or not there has been a meeting of the minds on the
agreement to arbitrate. Thus, a motion to compel arbitration should only be
granted if there is no genuine dispute as to any material fact and, after
viewing facts and drawing inferences in favor of the non-moving party, the
party moving to compel is entitled to judgment as a matter of law. 13
In support of its position, AT&T argues that Kantz “agreed in 2012 to arbitrate any
claims she may have in the future against AT&T” and that “[n]othing in the 2019 General
Release (which extinguished Kantz’s legal rights) has anything to do with the Arbitration
Agreement (which prescribed the forum in which claims over her rights would be
resolved).” 14 If AT&T were correct, arbitration would be proper.
“Deciding whether arbitration is required is a two-step process: in the first step,
the court determines whether ‘there is an agreement to arbitrate,’ and then in the second
step, the court decides whether ‘the dispute at issue falls within the scope of the
agreement.’” 15 State law governs the first step. 16 Thus, we apply Pennsylvania law to
determine whether the 2019 General Release (with no arbitration provision) superseded
12
White v. Sunoco, Inc., 870 F.3d 257, 262 (3d Cir. 2017) (quoting Flintkote Co. v. Aviva
PLC, 769 F.3d 215, 219 (3d Cir. 2014)).
13
Id.14
Appellants’ Opening Br. at 9.
15
Jaludi, 933 F.3d at 254 (quoting Century Indem. Co. v. Certain Underwriters at
Lloyd’s, London, 584 F.3d 513 523 (3d Cir. 2009)).
16
See id.5
the 2012 Arbitration Agreement. 17 “[T]he question of whether a later agreement
supersedes a prior arbitration agreement is tantamount to whether there is an agreement
to arbitrate.” 18 At the first step, there is no presumption of arbitrability. 19 “Under
Pennsylvania law, the later of two agreements between the same parties as to the same
subject matter generally supersedes the prior agreement.” 20 “This is true even if the first
agreement includes an arbitration clause and the second agreement does not.” 21
We begin with the text. The language of the 2019 General Release states, in
relevant part, that
[t]he provisions of this General Release and Waiver set forth the entire
agreement between me and the Companies concerning termination of
my employment. Any other promises or representations, written or oral,
are replaced by the provisions of this document and are no longer
effective unless they are contained in this document. 22
Here, the two agreements did not concern precisely the same subject matter. The 2012
Arbitration Agreement is much broader than the 2019 General Release. The 2019
General Release, by its own terms, is the parties’ “entire agreement . . .” concerning
17
See id. (“We thus apply ‘ordinary state-law principles that govern the formation of
contracts’ to determine whether the subsequent arbitration agreement supersedes a prior
agreement.”) (quoting Century Indem., 584 F.3d at 524).
18
Id. at 255.
19
See id. at 254 (citing Century Indem., 584 F.3d at 526-27; Dasher v. RBC Bank (USA),
745 F.3d 1111, 1122 (11th Cir. 2014); Applied Energetics, Inc. v. NewOak Capital Mkts.,
LLC, 645 F.3d 522, 526 (2d Cir. 2011)).
20
See id. at 256 (citing In re Klugh’s Estate, 66 A.2d 822, 825 (Pa. 1949)).
21
Id. (citing Collier v. Nat’l Penn Bank, 128 A.3d 307, 311 (Pa. Super. Ct. 2015)).
22
Appx. 137 (emphasis added); see also Applied Energetics, Inc., 645 F.3d at 525 (holding
that a later agreement that is silent on arbitration supersedes an earlier agreement providing
for arbitration because “[b]oth provisions are all-inclusive, both are mandatory, and neither
admits the possibility of the other”).
6
termination.” 23 The 2012 Arbitration Agreement covers termination disputes, too, but it
also covers “claim[s] AT&T . . . may have against [Kantz].” 24
Yet, a complete subject-matter overlap is not a requirement for supersession under
Pennsylvania law. Where just one term in a later contract is “inconsistent with a term
[in] an earlier contract” courts will interpret the later contract “as including a term to
rescind the inconsistent term in the earlier contract.” 25 Further, “the parties may or may
not at the same time agree to rescind all the other provisions of the earlier contract.” 26
Applying that approach here, we conclude that the 2019 General Release
supersedes the 2012 Arbitration Agreement as it relates to termination disputes. The
merger clause in the 2019 General Release confirms that result: it is the “entire
agreement between [Kantz] and the Companies concerning termination.” 27 AT&T could
have included an arbitration provision in the 2019 general release but it did not do so.
So, the District Court was correct that Kantz may litigate her termination-related claims
in federal court. The 2012 Arbitration Agreement, however, remains in place for other
potential disputes between Kantz and AT&T.
The District Court thus properly declined to compel arbitration because the 2019
General Release included no arbitration provision, and the 2019 General Release
superseded the 2012 Arbitration Agreement with respect to Kantz’s termination.
23
Appx. 237.
24
Appx. 90.
25
In re Klugh’s Est., 66 A.2d at 825.
26
Id.
27
Appx. 137.
7
For the foregoing reasons, we will affirm the judgment of the District Court.
8