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3rd Circuit: Partner's Discrimination Suit Can Proceed Against Law Firm
The Legal Intelligencer
March 27, 2009
A prominent Pittsburgh law firm has lost its battle to prevent one of its female partners from suing the firm for sex discrimination and sexual harassment now that the 3rd U.S. Circuit Court of Appeals has ruled that the woman cannot be forced to arbitrate her claims (pdf).
In the suit, attorney Alyson J. Kirleis accuses Dickie McCamey & Chilcote of paying female lawyers less than males and claims she has been told by a male partner that a woman with children should relinquish her partnership and work only part-time.
Kirleis, 45, who has worked at Dickie McCamey since 1988, also claims she was told by another male partner that the role of women lawyers was to prepare lawsuits for trials that would be handled by male lawyers.
The suit also includes allegations that Dickie McCamey's annual Christmas party is effectively closed to women "because of the sexually explicit nature of the entertainment including skits, songs, pornographic materials and props."
The firm's first response to the suit was to demand that it be dismissed on the grounds that Kirleis, as a shareholder, is required under the firm's bylaws to arbitrate any dispute.
When U.S. District Judge Gary Lancaster refused, the firm took an immediate appeal and won a stay.
But now a unanimous three-judge panel of the 3rd Circuit has upheld Lancaster's ruling, clearing the way for the case to go into the discovery phase.
In its 20-page opinion in Kirleis v. Dickie McCamey & Chilcote, the court said Lancaster was correct in refusing to order arbitration because Kirleis insists that she was never informed of and never agreed to any arbitration clause in the firm's bylaws.
"Under Pennsylvania law, explicit agreement is essential to the formation of an enforceable arbitration contract," U.S. Circuit Judge Thomas M. Hardiman wrote in an opinion joined by Judges D. Brooks Smith and Richard L. Nygaard.
Hardiman said the appeal presented a question of first impression under Pennsylvania law -- whether a shareholder or director may be compelled to arbitrate her civil rights claims pursuant to corporate bylaws to which she has not explicitly assented.
As a result, the 3rd Circuit asked the Pennsylvania Supreme Court to answer the question, Hardiman said, because it "exposed tension between corporate law principles and arbitration contract principles."
But the Pennsylvania justices ultimately declined to hear the certified question, Hardiman said, forcing the 3rd Circuit to predict Pennsylvania law.
Lawyers for Dickie McCamey argued that Kirleis' status as a shareholder of the firm put her on constructive notice of the arbitration provision in the bylaws and implied her intent to be bound by it.
But Kirleis swore in an affidavit that she was never provided a copy of the bylaws upon becoming a class B shareholder and that she was never informed of or agreed to the arbitration clause.
Hardiman found that, at first blush, the firm's argument had "persuasive force" because it highlighted "the tension between corporate law principles -- which generally impute to members of the corporation knowledge and acceptance of corporate bylaws -- and the law of contracts, which requires consent to be bound."
But in the end, Hardiman said, the contract principles trumped the corporate law so that even a shareholder or director cannot be bound by an arbitration provision to which she has never agreed.
The undisputed evidence, Hardiman said, showed that Kirleis never signed any arbitration agreement or other document that incorporated the arbitration provision in the bylaws.
"Kirleis never received a copy of the only document containing the firm's arbitration provision," Hardiman wrote. "Without this document, Kirleis could not have explicitly agreed to arbitrate her claims."
Kirleis claims in the suit that she was paid less than male colleagues who did similar work and that, when she complained, she suffered retaliation.
The suit also alleges that one male partner told Kirleis that her priorities were not in order because she was not spending enough time with her husband and children. Another partner, the suit says, told her that one of the firm's major clients wanted only "gray-haired guys" trying its cases, and that the "gals" in the office worked on preparing cases for trial so that the male lawyers could try them.
Her lawyers, Edward B. Friedman and Gloria A. Aiello of Friedman & Friedman in Pittsburgh, contend in the suit that Dickie McCamey has "a separate and lower employment track for female attorneys who have taken maternity leave and/or have children."
In her sex discrimination claim, Kirleis accuses Dickie McCamey of engaging in a pattern and practice of discriminating against women lawyers in the terms and conditions of their employment, including pay and quality of assignments.
In a separate claim of sexual harassment, Kirleis claims that the workplace environment at Dickie McCamey is "pervasively hostile towards women."
Female lawyers, the suit alleges, have been "constructively excluded" from the firm's Christmas parties due to the "sexually explicit nature of the entertainment."
After the firm's holiday party, the suit says, male attorneys have gone to topless bars. Once, the suit says, the male lawyers went to a restaurant and held a private "strip show" with hired performers.
Dickie McCamey CEO James R. Miller did not return repeated calls seeking comment on the court's ruling and on Kirleis' allegations.
The firm was represented in the appeal by attorneys Martin J. Saunders, Sunshine R. Fellows and Donna J. Geary of Jackson Lewis in Pittsburgh. Saunders and Fellows also did not return repeated phone calls seeking comment.
