## Facts

- Janice Quilloin worked as a registered nurse at Hahnemann University Hospital, operated by Tenet entities.
- When hired in 2006 and rehired in 2009, Quilloin signed Employee Acknowledgment forms confirming receipt of Tenet’s Fair Treatment Process (FTP) materials.
- The FTP established an internal dispute-resolution process that culminated in binding arbitration for employment-related disputes, including statutory claims.
- The FTP did not state that challenges to the arbitration agreement’s validity must be decided by an arbitrator.
- Quilloin sued Tenet seeking an FLSA collective action and related Pennsylvania wage-and-hour relief for unpaid overtime.
- Tenet moved to compel arbitration based on the FTP and signed acknowledgments.

## Issues

1. Whether the district court properly denied, without prejudice, Tenet’s motion to compel arbitration based on purported factual disputes about unconscionability.
2. Whether the FTP arbitration agreement was unenforceable under Pennsylvania law due to procedural and/or substantive unconscionability.
3. Whether the court or an arbitrator should decide the validity of the arbitration agreement where the FTP did not expressly delegate that question to arbitration.

## Decision

- The Third Circuit reversed the denial of Tenet’s motion to compel arbitration and remanded with instructions to compel arbitration.
- The court held there were no genuine disputes of material fact requiring a hearing on unconscionability.
- The court determined the arbitration agreement was enforceable under the FAA and Pennsylvania contract law.
- Because the FTP did not provide that validity challenges must be arbitrated, the court (not an arbitrator) decided unconscionability.

## Legal Principles

- The FAA favors enforcement of arbitration agreements, subject to generally applicable state-law contract defenses.
- Under Pennsylvania law, unconscionability requires both: (1) procedural unfairness showing lack of meaningful choice, and (2) substantively unfair terms that unreasonably favor the drafter; adhesion alone is insufficient.
- A party opposing arbitration bears the burden to prove unconscionability.
- A cost-based challenge requires evidence showing a likelihood that arbitration costs would be prohibitively expensive; speculative assertions are inadequate.
- Arbitration of statutory wage-and-hour claims is enforceable where the claimant can effectively vindicate statutory rights in the arbitral forum.

## Conclusion

The Third Circuit required arbitration of the nurse’s FLSA and related state wage claims, concluding that the record did not support procedural or substantive unconscionability and that no material factual dispute justified denying arbitration under the FAA.


Quilloin v. Tenet HealthSystem Phila., Inc., 673 F.3d 221 (3d Cir. 2012)