Margaret Palcko v. Airborne Express, Inc.

372 F.3d 588, 2004 U.S. App. LEXIS 12025, 85 Empl. Prac. Dec. (CCH) 41,681, 93 Fair Empl. Prac. Cas. (BNA) 1775, 2004 WL 1366971
CourtCourt of Appeals for the Third Circuit
DecidedJune 18, 2004
Docket03-2227
StatusPublished
Cited by135 cases

This text of 372 F.3d 588 (Margaret Palcko v. Airborne Express, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Margaret Palcko v. Airborne Express, Inc., 372 F.3d 588, 2004 U.S. App. LEXIS 12025, 85 Empl. Prac. Dec. (CCH) 41,681, 93 Fair Empl. Prac. Cas. (BNA) 1775, 2004 WL 1366971 (3d Cir. 2004).

Opinion

SLOVITER, Circuit Judge.

The principal questions before us on this appeal are the scope of the exclusion from the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16 (2004), for a “class of workers engaged in foreign or interstate commerce” and the preemptive effect, if any, of the statutory exclusion.

I.

Defendant Airborne Express, Inc. (“Airborne”) appeals from the District Court’s order dated April 23, 2003 denying Airborne’s motion to compel arbitration of ■plaintiff Margaret Palcko’s claims under Title VII of the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e (2004), and the Pennsylvania Human Relations Act, 43 Pa. Cons.Stat. Ann. §§ 951-963 (2004). Airborne contends that Palcko is required to arbitrate her claims pursuant to a contractual arbitration agreement based on the FAA and Washington state law. Its appeal challenges the District Court’s rulings that Palcko, as a transportation worker engaged in interstate commerce, is excluded from the FAA’s coverage, and that this FAA exemption preempts enforcement of Palcko’s arbitration agreement with Airborne under Washington state law.

II.

Airborne is a package transportation and delivery company that engages in intrastate, interstate, and international shipping. It began employing Palcko as a Field Services Supervisor in Philadelphia in 1998. Palcko’s duties included supervising between thirty and thirty-five drivers who delivered packages from Airborne’s facility near the Philadelphia International Airport to their ultimate destinations in the Philadelphia area, and picked up packages from customers in the Philadelphia area and brought them back to Airborne’s facility for shipment. Palcko monitored and improved the performance of the drivers under her supervision to ensure timely and efficient delivery of packages.

When Palcko was hired, she agreed to enter into a “Mutual Agreement to Arbitrate Claims” with Airborne. The relevant portions of the Agreement, which covers “all claims,” provides:

Except as provided in this Agreement, the Federal Arbitration Act shall govern the interpretation, enforcement and all proceedings pursuant to this Agreement. To the extent that the Federal Arbitration Act is inapplicable, Washington law pertaining to agreements to arbitrate shall apply.

App. at 19.

According to Palcko, once she began performing her duties at Airborne she encountered immediate resistance and hostility from the drivers under her supervision. She alleges that other Airborne employees falsely accused her of sexual misconduct, verbally and physically intimidated her during work, created a hostile work environment through sexist remarks, spread offensive rumors about her sex life and moral character through Airborne’s internal communications system, and generally discriminated against her because of her gender. Pl.’s Compl. at 3-7. Palcko con *591 tends that Airborne did not meaningfully investigate and address these incidents, which she reported to the company management. According to Palcko, when her immediate supervisor, Michael Matey, told her in the presence of others during a March 5, 2001 meeting that “[m]aybe you don’t belong in this industry” and “[m]aybe you should just leave,” she left the meeting and never returned to her position at Airborne. Pl.’s Compl. at 7. Airborne denies all Palcko’s factual allegations of company wrongdoing. Def.’s Answer at 3-6.

Palcko filed a charge against Airborne with the Equal Employment Opportunity Commission on May 31, 2001, seeking administrative remedies for her allegations under Title VII, 42 U.S.C. § 2000e-5. After 180 days elapsed without a finding by the Commission on Palcko’s charge against Airborne, she requested a Dismissal and Notice of Rights from the Commission. 42 U.S.C. § 2000e — 5(f)(1). The Commission issued the Dismissal and Notice, thereby exhausting Palcko’s administrative remedies and allowing her to seek judicial recourse.

Palcko filed a complaint against Airborne in the District Court for the Eastern District of Pennsylvania on May 20, 2002 under Title VII and the Pennsylvania Human Relations Act. After the parties resolved issues unrelated to this appeal pertaining to the service of process, Airborne filed a motion to compel arbitration of Palcko’s claims under the parties’ arbitration agreement. The District Court denied Airborne’s motion on April 24, 2003, holding that Palcko’s employment contract is “excluded from the coverage of the FAA because of the nature of her work.” App. at 14, 17-18. The court also found that the exclusionary effect of the FAA preempts alternative enforcement of the arbitration contract under Washington state law, as such enforcement “would directly conflict with Congress’s express purpose” of exempting a certain class of workers “from a federal law otherwise favoring arbitration.” App. at 18. Airborne now appeals from the District Court’s order.

III.

A. The Federal Arbitration Act

1. Jurisdiction

The District Court had subject matter jurisdiction over Palcko’s Title VII claim under 28 U.S.C. §§ 1331, 1343. The FAA, 9 U.S.C. § 16(a), provides for appellate jurisdiction over Airborne’s appeal from the District Court’s order denying its motion to compel arbitration. 1 Brayman Constr. Corp. v. Home Ins. Co., 319 F.3d 622, 624-25 (3d Cir.2003). Palcko contends, however, that because the District Court found Palcko’s employment contract to be exempt from the FAA, we have no jurisdiction to review that court’s denial of Airborne’s motion to compel arbitration under 9 U.S.C. § 16(a), which is a section of the FAA. Appellee’s Br. at 1.

Palcko’s contention is without merit. We have held in Sandvik AB v. Advent International Corporation, 220 F.3d 99 (3d Cir.2000), that the FAA’s provision for *592 interlocutory appeals of orders denying motions to compel arbitration clearly endows us with appellate jurisdiction even in instances when the validity of the underlying contract to arbitrate is in doubt, as in Palcko’s case with respect to the arbitration agreement’s reference to the FAA. See id.

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372 F.3d 588, 2004 U.S. App. LEXIS 12025, 85 Empl. Prac. Dec. (CCH) 41,681, 93 Fair Empl. Prac. Cas. (BNA) 1775, 2004 WL 1366971, Counsel Stack Legal Research, https://law.counselstack.com/opinion/margaret-palcko-v-airborne-express-inc-ca3-2004.