Assent to Two‑Page Arbitration Agreements and the High Bar for Vacating Employment Arbitration Awards: Commentary on McMasters v. Restaurant Brands International Inc. (3d Cir. 2025)

Assent to Two‑Page Arbitration Agreements and the High Bar for Vacating Employment Arbitration Awards: Commentary on McMasters v. Restaurant Brands International Inc. (3d Cir. 2025)

Note: The underlying Third Circuit opinion is designated “NOT PRECEDENTIAL” and, under I.O.P. 5.7, does not constitute binding precedent. It is, however, instructive as a persuasive authority and as an illustration of how the Court applies established arbitration and employment discrimination principles.

I. Introduction

This commentary examines the Third Circuit’s decision in Susan McMasters v. Restaurant Brands International Inc., et al., Nos. 23‑2764 & 24‑1701 (3d Cir. Nov. 17, 2025), in which the Court affirmed:

  • an order compelling arbitration of a pregnancy discrimination and constructive discharge lawsuit brought by a Burger King employee, and
  • a subsequent order confirming the arbitrator’s award of summary judgment in favor of the employer.

The case sits at the intersection of three important areas of federal and Pennsylvania law:

  1. Contract formation and assent under Pennsylvania law, particularly in the context of arbitration agreements presented as a condition of employment.
  2. The Federal Arbitration Act (FAA) and the stringent limits it places on judicial review and vacatur of arbitration awards.
  3. Substantive employment discrimination law, specifically pregnancy discrimination and constructive discharge under Title VII’s Pregnancy Discrimination Act (PDA) and the Pennsylvania Human Relations Act (PHRA).

The plaintiff, Susan McMasters, suffered a miscarriage after being unable to leave her Burger King shift due to staffing issues. She claimed that:

  • the employer’s failure to accommodate her need for immediate medical care constituted pregnancy discrimination and;
  • the subsequent workplace conditions amounted to constructive discharge.

The Third Circuit’s opinion does two main things:

  1. It reaffirms that an employee’s signature on the second page of a two‑page arbitration agreement—where that page explicitly references the first page and is labeled “2 of 2”—is sufficient assent to the full agreement, even if the employee later asserts she did not see the first page.
  2. It reiterates the very high bar for vacating an arbitration award under FAA § 10(a)(4), emphasizing that even arguably imperfect legal reasoning by the arbitrator will not justify vacatur so long as the award is “rationally derived” from the submissions and applicable law.

II. Summary of the Opinion

A. Parties and Claims

  • Plaintiff–Appellant: Susan McMasters, a former Burger King employee, suing individually and as Administratrix of the Estate of “Baby Doe.”
  • Defendants–Appellees: Restaurant Brands International Inc. (Burger King’s parent) and several related Carrols entities operating Burger King restaurants. Only the Carrols entities remained relevant on appeal; claims against Restaurant Brands International and certain wrongful death/survival and other claims had been dismissed or withdrawn.

McMasters alleged that Carrols:

  • Discriminated against her on the basis of pregnancy in violation of Title VII (as amended by the Pregnancy Discrimination Act, 42 U.S.C. §§ 2000e, 2000e‑2(k)) and the PHRA, by failing to accommodate her need to leave work when she was suffering cramping and vaginal bleeding that turned out to be a miscarriage.
  • Constructively discharged her due to the discriminatory and hostile conditions she experienced after the incident.

She initially filed suit in the Western District of Pennsylvania. The District Court:

  • compelled arbitration pursuant to an employment arbitration agreement (McMasters I), and
  • later confirmed an arbitration award granting summary judgment to Carrols (McMasters II).

B. Issues on Appeal

The Third Circuit addressed two principal questions:
  1. Arbitration Agreement / Assent: Did the District Court err in compelling arbitration on the ground that there was no valid agreement to arbitrate, because McMasters claims she never received or assented to the first page of the two‑page agreement?
  2. Vacatur / Confirmation of Award: Did the arbitrator exceed his powers or act in “manifest disregard” of the law so as to justify vacatur of the award under the FAA, particularly in his analysis of:
    • pregnancy discrimination / pretext, and
    • constructive discharge?

C. Holdings

  1. Assent to Arbitration: The Court held that McMasters validly assented to the arbitration agreement:
    • Her signature on page 2, which:
      • contained an “Employee Acknowledgment,”
      • expressly referred to “Claims, as described above” (on page 1), and
      • was marked “2 of 2,”
    • combined with evidence of the employer’s routine practice of giving employees both pages and an employee handbook describing the arbitration program,

    was sufficient to establish mutual assent under Pennsylvania law. The Court rejected her argument that she could avoid arbitration by claiming she did not receive or read page 1.

  2. Confirmation of Arbitration Award / No Vacatur: The Court affirmed the District Court’s refusal to vacate and its decision to confirm the award:
    • The arbitrator applied the correct general legal framework to both the pregnancy discrimination and constructive discharge claims.
    • Any problematic or stray statements in the arbitrator’s reasoning (e.g., that Carrols “could not have been responsible for her miscarriage,” or a misstatement about the scope of “direct evidence” analysis) did not form the basis of the decision and did not render the award “completely irrational” or in “manifest disregard of the law.”
    • Accordingly, there was no ground under FAA § 10(a)(4) to vacate the award.

III. Detailed Analysis

A. Factual and Procedural Background

While working a closing shift at a Burger King restaurant operated by Carrols LLC, McMasters experienced severe cramping and vaginal bleeding. She attempted to contact her restaurant manager and multiple coworkers to obtain coverage so she could leave for the hospital. Her attempts were largely unsuccessful:

  • Some coworkers did not answer.
  • One coworker who had already finished his shift had gone to a bar and, under the employer’s “no alcohol before work” policy, could not return.
  • Another manager was hospitalized, and another was on medical leave.
  • One crew member did ultimately come in to assist.

According to McMasters, she believed that leaving mid‑shift without coverage would endanger her job. Although her manager told her she “needed to get to the hospital” and (according to the manager) instructed her multiple times to shut down the store and leave, McMasters remained until the end of her shift before going to the hospital. There she learned she had suffered a miscarriage.

After returning to work:

  • One peer allegedly stopped communicating with her,
  • her managers did not intervene to remedy this behavior, and
  • she described the workplace as “not very pleasant.”

She resigned and filed suit alleging pregnancy discrimination, hostile work environment, and constructive discharge claims under Title VII (via the Pregnancy Discrimination Act) and the PHRA. Other claims—such as retaliation and disability discrimination—were later withdrawn, and her wrongful death/survival claims relating to the unborn child were dismissed and not pursued on appeal.

Crucial to this appeal, when she was hired, McMasters signed an arbitration agreement. She signed the second page, which:

  • contained an “Employee Acknowledgment” stating she agreed to arbitrate “Claims, as described above,”
  • affirmed that she had read and understood the arbitration agreement and had any questions answered, and
  • stated that she had been informed about the applicable arbitration rules and where to access them.

The second page was labeled “2 of 2.” McMasters later claimed that:

  • she had not received the first page,
  • she did not realize she was signing the second page of a two‑page document, and
  • she did not read the agreement despite understanding it was a condition of employment.

The District Court granted Carrols’ motion to compel arbitration and stayed the litigation (McMasters I, 2021 WL 11728156 (W.D. Pa. 2021)). The arbitrator later granted summary judgment to Carrols on the remaining discrimination and constructive discharge claims. McMasters moved to vacate the award; the District Court denied that motion and confirmed the award (McMasters II, 724 F. Supp. 3d 391 (W.D. Pa. 2024)).

McMasters appealed both orders to the Third Circuit.

B. Standards of Review and Legal Framework

1. Jurisdiction and Review of the Arbitration Order

  • The District Court had federal question jurisdiction under 28 U.S.C. § 1331 because the action included Title VII claims.
  • The Third Circuit exercised appellate jurisdiction under 28 U.S.C. § 1291 and the FAA, 9 U.S.C. § 16(a)(1)(D), (3), which allows appeals from orders compelling arbitration and confirming arbitration awards.

As to the motion to compel arbitration:

  • The Court applies plenary review (de novo) to an order compelling arbitration. Flintkote Co. v. Aviva PLC, 769 F.3d 215, 219 (3d Cir. 2014).
  • When the court considers evidence beyond the pleadings (as here, with affidavits and documents about the hiring process), it uses the summary judgment standard under Fed. R. Civ. P. 56(a). White v. Sunoco, Inc., 870 F.3d 257, 262 (3d Cir. 2017).
  • Thus, the motion to compel should be granted only if there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law.

2. Review of Denial of Vacatur / Confirmation of Award

For the order confirming the arbitration award and denying vacatur:

  • The Court reviews questions of law de novo and factual findings for clear error. Whitehead v. Pullman Group, LLC, 811 F.3d 116, 119 n.23 (3d Cir. 2016).

Under the FAA, courts may vacate an award only on narrow statutory grounds, including where:

  • “the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made[.]” 9 U.S.C. § 10(a)(4).

The Third Circuit has construed this standard to mean that an arbitrator exceeds her powers if she:

  • grants relief that cannot be “rationally derived” from the parties’ agreement and submissions, or
  • issues an award that is “so completely irrational that it lacks support altogether.” CPR Mgmt., S.A. v. Devon Park Bioventures, L.P., 19 F.4th 236, 246 (3d Cir. 2021) (quoting Sutter v. Oxford Health Plans LLC, 675 F.3d 215, 219–20 (3d Cir. 2012), aff’d, 569 U.S. 564 (2013)).

The Court also addressed the concept of “manifest disregard of law,” which it has treated as a “judicial gloss” on the statutory vacatur grounds rather than a freestanding basis. Sutter, 675 F.3d at 220 n.2; Metromedia Energy, Inc. v. Enserch Energy Servs., Inc., 409 F.3d 574, 578 (3d Cir. 2005).

C. Precedents Cited and Their Role

This opinion is built on a substantial body of Third Circuit and Pennsylvania precedent. Some of the key authorities and their roles are as follows:

1. Contract Formation and Assent

  • Blair v. Scott Specialty Gases, 283 F.3d 595 (3d Cir. 2002)
    • Establishes that under Pennsylvania law, both parties must manifest an intention to be bound to form a contract, including an agreement to arbitrate.
    • The McMasters panel relies on Blair to frame the question of whether a valid arbitration agreement exists.
  • Simeone v. Simeone, 581 A.2d 162 (Pa. 1990)
    • Holds that parties who sign written agreements are normally bound by them, “without regard to whether the terms thereof were read and fully understood.”
    • Used here to support the principle that a party’s signature is a manifestation of assent, even if the signer did not read the entire document.
  • Denlinger, Inc. v. Dendler, 608 A.2d 1061 (Pa. Super. Ct. 1992)
    • Reiterates that one who signs a document, and has the capacity to understand it, is bound by what they sign.
    • Cited to reinforce the binding nature of McMasters’ signature on page 2.

2. Evidence of Routine Business Practice

  • Fed. R. Evid. 406 (Habit; Routine Practice)
    • Allows evidence of an organization’s routine practice to prove that its conduct on a particular occasion was in accordance with that routine.
    • The Court notes that Carrols’ evidence of its standard onboarding process (providing both pages of the agreement and an employee handbook) was properly relied upon as proof that McMasters likely received the complete agreement.
  • Tinder v. Pinkerton Security, 305 F.3d 728 (7th Cir. 2002)
    • The Seventh Circuit upheld enforcement of an arbitration agreement where managers testified that they routinely distributed agreements with paychecks, even though the plaintiff denied receiving the agreement.
    • The Third Circuit cites Tinder analogously: evidence of consistent distribution practices can outweigh an employee’s contrary recollection.

3. Who Decides Formation Challenges?

  • Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967)
    • Distinguishes between:
      • challenges to the contract as a whole (for the arbitrator), and
      • challenges to the very existence or formation of the arbitration agreement (for the court).
    • The Third Circuit relies on this to hold that McMasters did not waive her formation challenge by not raising it again in arbitration, because contract‑formation questions are for the court, and she had already raised the issue at the motion to compel stage.

4. FAA Vacatur and Deference to Arbitrators

  • CPR Mgmt., S.A. v. Devon Park Bioventures, L.P., 19 F.4th 236 (3d Cir. 2021)
    • Restates the standard that an arbitrator exceeds her powers if the award is not “rationally derived” from the parties’ agreement and submissions or is “completely irrational.”
    • Forms the key standard for assessing McMasters’ vacatur arguments.
  • Sutter v. Oxford Health Plans LLC, 675 F.3d 215 (3d Cir. 2012), aff’d, 569 U.S. 564 (2013)
    • Emphasizes extreme deference to arbitrators: as long as they are “even arguably construing or applying the contract and acting within the scope of their authority,” serious legal error alone is not enough to vacate.
    • Cited to support the “rationally derived” standard and the narrowness of § 10(a)(4).
  • Brentwood Medical Assocs. v. United Mine Workers of America, 396 F.3d 237 (3d Cir. 2005)
    • Held that even if an arbitrator added language to a contract, vacatur was not warranted where the overall reasoning met a “minimum rationality threshold.”
    • Cited to show that stray or arguably incorrect statements by an arbitrator are not fatal if the core decision is rationally supported.
  • Metromedia Energy, Inc. v. Enserch Energy Servs., Inc., 409 F.3d 574 (3d Cir. 2005)
    • Clarifies that vacatur is inappropriate when an arbitrator “merely erroneously interprets the law” as opposed to willfully ignoring it.
    • Used to reject McMasters’ “manifest disregard” argument.
  • Whitehead v. Pullman Group, LLC, 811 F.3d 116 (3d Cir. 2016)
    • Provides the standard of appellate review over denial of motions to vacate: de novo for legal issues; clear error for factual findings.

5. Substantive Employment Law: Pregnancy Discrimination & Constructive Discharge

  • Doe v. C.A.R.S. Protection Plus, Inc., 527 F.3d 358 (3d Cir. 2008)
    • Articulates the elements of a Title VII pregnancy discrimination claim and applies the McDonnell Douglas burden‑shifting framework.
    • Relied upon to confirm that the arbitrator used the correct model in analyzing McMasters’ pregnancy discrimination claim.
  • Mandel v. M & Q Packaging Corp., 706 F.3d 157 (3d Cir. 2013)
    • Defines constructive discharge as occurring when discriminatory conditions are “so intolerable that a reasonable person subject to them would resign.”
    • Provides the legal bar against which McMasters’ constructive discharge claim is measured.
  • Qin v. Vertex, Inc., 100 F.4th 458 (3d Cir. 2024) (as cited)
    • Clarifies that “direct evidence” of discrimination is evidence “so revealing of discriminatory animus that” the usual burden‑shifting framework is unnecessary.
    • Supports the conclusion that McMasters’ evidence regarding the employer’s inability to find coverage was not “direct evidence” of pregnancy discrimination.

D. The Court’s Legal Reasoning

1. Assent to the Arbitration Agreement

The central formation issue was whether McMasters truly agreed to arbitrate, given her claim that she never received the first page of the two‑page agreement.

The Court’s reasoning unfolded as follows:

  1. Signature as Manifestation of Assent.
    • There was no dispute that McMasters’ signature appeared on the second page.
    • Under Pennsylvania law, a signature generally signals assent to the contract’s terms. The Court invoked Simeone and Denlinger to emphasize that, ordinarily, a person is bound by what they sign, regardless of whether they read or fully understood it.
  2. Text of the Signed Page.
    • The second page explicitly contained an “Employee Acknowledgment” affirming that the employee agreed to arbitrate “Claims, as described above,” and acknowledged:
      • reading and understanding the agreement,
      • having the opportunity to ask questions and receive answers, and
      • being informed about the applicable arbitration rules and where to find them.
    • The page was labeled “2 of 2,” unmistakably indicating that this was the second part of a longer agreement.
    • These internal references undercut McMasters’ assertion that she thought she was signing a standalone single page.
  3. Evidence of Carrols’ Routine Onboarding Practice.
    • Carrols introduced evidence that its standard practice was to provide both pages of the arbitration agreement, along with other onboarding documents and an employee handbook.
    • Under Fed. R. Evid. 406 and authorities such as Tinder, the District Court was entitled to credit this evidence of routine practice over McMasters’ contrary assertion.
    • The Third Circuit agreed that it was reasonable to infer that she had been provided with both pages.
  4. Additional Notice of Arbitration.
    • The arbitration requirement was also posted in the restaurant and described in an employee handbook that McMasters acknowledged receiving. She argued that the handbook did not, in fact, mention arbitration, but the Court characterized that assertion as inaccurate.
    • These additional sources of notice undercut any suggestion that she was unaware of the arbitration program.
  5. No Relief from Agreement Based on Not Reading or Not Receiving Page 1.
    • The Court rejected McMasters’ claim that she should be excused from arbitration because she allegedly never saw page 1.
    • Given the clear “2 of 2” notation and the reference to “Claims, as described above,” a reasonable person would be alerted that there was a preceding page containing the substantive description of what was being agreed to.
    • Per Simeone and related cases, her failure to read or question the document, despite this obvious indication, did not negate her assent.
  6. Formation Challenge Properly Preserved.
    • Citing Prima Paint, the Court noted that questions about whether an arbitration agreement was ever formed are for the court, not the arbitrator.
    • Because McMasters raised the formation issue when Carrols moved to compel arbitration, she did not waive it by not re‑raising it before the arbitrator.

On this record, the Third Circuit held that there was no genuine dispute of material fact regarding McMasters’ assent, and Carrols was entitled to judgment as a matter of law on the motion to compel arbitration.

2. Denial of Vacatur and Confirmation of the Arbitration Award

The second part of the opinion addresses whether the arbitrator’s award could be vacated under FAA § 10(a)(4).

a. Pregnancy Discrimination Claim

McMasters argued that the arbitrator:

  • misapplied the law governing pregnancy discrimination by improperly rejecting her argument that she had “direct evidence” of discrimination, and
  • made an irrational statement that Carrols “could not have been responsible” for her miscarriage, which she claimed showed the arbitrator misunderstood the basis of her claims.

The Court’s analysis:

  1. Application of Correct Legal Framework.
    • The arbitrator recognized that:
      • Title VII pregnancy discrimination claims, and corresponding PHRA claims, are analyzed under the McDonnell Douglas burden‑shifting framework, as explained in Doe v. C.A.R.S. Protection Plus, Inc.
    • Under that framework:
      1. The plaintiff must first make out a prima facie case (e.g., that she is pregnant, was qualified, suffered an adverse action, and that circumstances give rise to an inference of discrimination).
      2. The employer then articulates a legitimate, non‑discriminatory reason for its actions.
      3. The burden shifts back to the plaintiff to show that the employer’s reason is a pretext for discrimination.
    • The arbitrator concluded that Carrols had provided non‑discriminatory reasons for being unable to send additional coverage on the night in question (e.g., unavailable coworkers, medical leave of managers, no‑alcohol policy), and that McMasters had not produced sufficient evidence that these reasons were pretextual.
  2. “Direct Evidence” vs. Circumstantial Evidence.
    • McMasters argued she had “direct evidence” of pregnancy discrimination and thus should not be required to proceed under the McDonnell Douglas framework.
    • The arbitrator apparently stated that “direct evidence” analysis applied only in disability cases—a misstatement of law, since direct evidence can exist in any discrimination context.
    • However, the Third Circuit deemed this misstatement harmless because:
      • There was no direct evidence in the technical sense. Per Qin v. Vertex, Inc., direct evidence must be so revealing of discriminatory animus that burden‑shifting is unnecessary (e.g., explicit discriminatory statements by decisionmakers).
      • McMasters’ evidence—that managers did not send coverage and she felt pressured not to leave—was at most circumstantial; it did not show explicit pregnancy‑based animus.
    • Accordingly, it was proper for the arbitrator to proceed under the McDonnell Douglas framework and conclude that she had not proven pretext.
  3. Miscarriage Causation Comment.
    • The arbitrator stated that Carrols “could not have been responsible for her miscarriage.”
    • McMasters argued this was irrational because her already‑dismissed wrongful death and survival claims (for which miscarriage causation might be critical) were no longer at issue; the remaining Title VII/PHRA claims did not require proof that the employer physically caused the miscarriage.
    • The Third Circuit treated this as a stray, unnecessary comment. Crucially, the arbitrator did not rely on this statement to resolve the discrimination claim. The award rested on:
      • the absence of evidence that Carrols’ actions were motivated by pregnancy‑based animus, and
      • her failure to show pretext.
    • Under Brentwood Medical and CPR Mgmt., such an isolated remark does not render an otherwise rational award “completely irrational.”
  4. No “Manifest Disregard” or Exceeding of Powers.
    • The Court noted that “manifest disregard of law” is at most a gloss on § 10(a) and not an independent ground.
    • Even assuming it applies, the arbitrator did not:
      • ignore clear binding precedent, or
      • refuse to apply controlling law.
    • At worst, the arbitrator “merely erroneously interprets[] the law,” which Metromedia holds is not a basis for vacatur.
b. Constructive Discharge Claim

On constructive discharge, the arbitrator applied the standard articulated in Mandel: an employee must show that the employer permitted discrimination “so intolerable that a reasonable person subject to them would resign.”

The arbitrator concluded that:

  • the uncomfortable social interactions after McMasters’ return (a coworker ceasing communication, managers not intervening, the workplace being “not very pleasant”) were insufficient to meet the “intolerable” threshold, and
  • there was no evidence that the conditions were so severe or pervasive as to force a reasonable person to resign.

The Third Circuit held that this conclusion was rationally grounded in the record and correctly applied the legal standard. It therefore did not warrant vacatur under § 10(a)(4).

c. Summary: Award Rationally Derived from Law and Record

Stepping back, the Court emphasized the core FAA principle: as long as the arbitrator:

  • understood the record,
  • applied the correct general legal frameworks, and
  • reached an award that could be rationally derived from the parties’ submissions and applicable law,

courts cannot vacate the award simply because they might have weighed evidence differently, or even because the arbitrator’s reasoning contained misstatements or unnecessary remarks.

IV. Simplifying Key Legal Concepts

A. Arbitration Agreements and the FAA

An arbitration agreement is a contract in which parties agree to have certain disputes resolved by a private arbitrator rather than by a court. The Federal Arbitration Act:

  • strongly favors enforcement of arbitration agreements, and
  • severely limits the grounds on which courts may refuse to enforce or may overturn arbitration awards.

To compel arbitration, the court must find:

  1. a valid agreement to arbitrate, and
  2. that the dispute falls within the scope of that agreement.

B. Contract Formation and Assent

Under Pennsylvania law:

  • A valid contract requires that both parties manifest an intention to be bound. Signing a contract is usually the clearest form of such manifestation.
  • A party generally cannot avoid a contract by later claiming:
    • they did not read it, or
    • they did not fully understand every term,
    so long as they had capacity and a reasonable opportunity to do so.
  • Routine business practices can be used to show what likely occurred in a particular instance (e.g., onboarding procedures).

C. Summary Judgment (Including in Arbitration)

Summary judgment is a procedural mechanism for resolving claims without a full trial when:

  • there is no genuine dispute about any material fact, and
  • the moving party is entitled to judgment as a matter of law.

Arbitrators often apply an analogous standard when deciding summary judgment motions in arbitration, examining evidence and inferences in the light most favorable to the non‑moving party.

D. Pregnancy Discrimination under Title VII / PHRA

Title VII, as amended by the Pregnancy Discrimination Act (PDA), prohibits discrimination “because of pregnancy, childbirth, or related medical conditions.” The PHRA is interpreted similarly in this context.

To prove pregnancy discrimination, a plaintiff typically must show:

  1. She was pregnant or experienced a pregnancy‑related condition.
  2. She was qualified for her position.
  3. She suffered an adverse employment action (e.g., termination, demotion, denial of a reasonable work accommodation, or severe harassment).
  4. The circumstances give rise to an inference that the action was taken because of her pregnancy.

In the absence of explicit discriminatory statements, courts use the McDonnell Douglas burden‑shifting framework to evaluate whether the employer’s stated reasons were pretextual and whether pregnancy actually motivated the adverse action.

E. Direct vs. Circumstantial Evidence

  • Direct evidence of discrimination is evidence that, if believed, proves discriminatory motive without the need for inference (e.g., “We’re firing you because you’re pregnant.”).
  • Circumstantial evidence requires inferential reasoning (e.g., suspicious timing, inconsistent stories, comparative treatment of similarly situated non‑pregnant employees).
  • If direct evidence exists, the burden‑shifting framework is often unnecessary. If not, McDonnell Douglas applies.

F. Constructive Discharge

Constructive discharge occurs when an employer does not formally fire an employee but allows or creates working conditions so intolerable that a reasonable person in the employee’s position would feel compelled to resign.

Key points:

  • The standard is objective: would a reasonable person in that situation feel forced to quit?
  • The bar is high; mere dissatisfaction, unpleasantness, or coworker friction usually does not suffice.
  • Constructive discharge usually requires either ongoing severe harassment or a significant, discriminatory change in working conditions.

G. Vacating an Arbitration Award: “Manifest Disregard” and § 10(a)(4)

Courts can vacate an arbitration award only in rare circumstances, such as:

  • corruption, fraud, or undue means,
  • evident partiality,
  • misconduct that prejudices a party’s rights, or
  • arbitrators exceeding their powers (9 U.S.C. § 10(a)).

“Exceeding powers” (§ 10(a)(4)) generally means that the arbitrator:

  • decided an issue not submitted,
  • granted relief unrelated to the contract or submissions, or
  • reached an award that is irrational or cannot be reconciled with the contract and evidence.

“Manifest disregard of the law” is a phrase some courts use to describe a situation where an arbitrator:

  • knew the applicable law,
  • understood it, and
  • deliberately chose to ignore it.

It is not enough that the arbitrator simply got the law wrong; the disregard must be obvious and intentional. The Third Circuit here emphasizes that mere legal error—even serious—will not justify vacatur where the arbitrator is at least “arguably” applying the law.

V. Implications and Potential Impact

A. For Employers and Drafting of Arbitration Agreements

Even though non‑precedential, the opinion gives employers in the Third Circuit (Pennsylvania, New Jersey, Delaware, and the Virgin Islands) several practical lessons:

  1. Clarity of Multi‑Page Agreements.
    • Label pages clearly (e.g., “Page 2 of 2”).
    • Ensure cross‑references are explicit (“Claims, as described above”).
    • Include an acknowledgment that the employee has been given and has read the entire agreement.
  2. Documented Onboarding Practices.
    • Maintain consistent procedures for distributing arbitration agreements and handbooks.
    • Be able to testify or provide affidavits about routine practices, which can overcome later denials of receipt.
    • Consider training HR staff to document the provision of multi‑page documents to employees.
  3. Redundant Notice of Arbitration.
    • Posting notices in the workplace and summarizing arbitration provisions in employee handbooks can bolster the inference that employees had notice of, and assented to, arbitration.

B. For Employees and Employee‑Side Counsel

From the employee perspective, the case underscores:

  • The difficulty of avoiding arbitration based on assertions of not reading or not receiving part of the agreement, especially where:
    • the page signed obviously indicates it is part of a multi‑page document, and
    • there is evidence that the employer’s standard practice is to provide complete copies.
  • The importance of scrutinizing onboarding paperwork and seeking clarification at the time of hiring.
  • The limited value of formation challenges that conflicts with clear documentary indications and routine practices evidence.

C. For Litigation Strategy: Vacatur of Employment Arbitration Awards

The FAA’s deference to arbitrators is on full display:

  • Even facially troubling or irrelevant remarks by an arbitrator (“could not have been responsible for her miscarriage”) will generally not suffice for vacatur if they are not the basis for the award.
  • Errors regarding doctrinal nuances (such as an incorrect statement about where “direct evidence” analysis applies) will not justify vacatur when the arbitrator nonetheless applies an accepted framework (McDonnell Douglas) and the outcome is supported by the record.
  • To succeed on a § 10(a)(4) challenge, counsel must show more than disagreement with the arbitrator’s reasoning; they must demonstrate that the arbitrator:
    • went beyond the submission, or
    • issued an award that cannot be rationally reconciled with the law and facts.

D. Substantive Employment Law: Pregnancy Discrimination and Emergency Situations

The underlying facts are sympathetic, but the opinion illustrates a fundamental feature of U.S. discrimination law:

  • Title VII and the PHRA do not guarantee optimal or even fair treatment in all circumstances; they prohibit discrimination because of protected characteristics.
  • Even where an employer’s actions (or inactions) correlate with serious harm (here, a miscarriage), the plaintiff must still tie those actions to discriminatory motive or differential treatment compared to non‑pregnant employees.
  • Failure to accommodate an emergent medical need without evidence that the denial was tied to pregnancy status often will not, by itself, establish pregnancy discrimination.

For future pregnancy discrimination litigation:

  • Plaintiffs will need to marshal evidence of:
    • disparate treatment (e.g., how non‑pregnant employees with medical crises were treated),
    • explicit or implicit pregnancy‑based comments or policies, or
    • patterns of disadvantage to pregnant workers in scheduling or leave practices.
  • Constructive discharge claims will continue to face a high bar where post‑incident hostility or isolation is not extreme or pervasive.

E. Persuasive Value Despite Non‑Precedential Status

Although not binding, the opinion is:

  • Persuasive in subsequent district court litigation within the Third Circuit on:
    • how to evaluate assent to multi‑page arbitration agreements, and
    • how to apply FAA § 10(a)(4) in employment discrimination arbitrations.
  • Illustrative of the Third Circuit’s ongoing adherence to a robust pro‑arbitration stance while still demanding that arbitrators engage with the proper legal frameworks.

VI. Conclusion

McMasters v. Restaurant Brands International Inc. provides a detailed snapshot of how the Third Circuit approaches:

  • contract formation and assent in the employment arbitration context, and
  • judicial review of arbitration awards under the Federal Arbitration Act.

On the formation side, the opinion highlights that:

  • An employee’s signature on the second page of a clearly two‑page agreement, where that page references terms “described above” and is integrated into a documented onboarding process, will generally bind the employee to arbitrate—even if she later asserts she never saw the first page or did not read the document.
  • Pennsylvania law strongly enforces the principle that competent adults are bound by what they sign, and courts may rely on routine practice evidence to resolve factual disputes.

On the vacatur side, the case underscores:

  • the extraordinary deference courts owe to arbitrators,
  • the narrowness of the § 10(a)(4) “exceeded powers” ground, and
  • that “manifest disregard of law,” to the extent it exists at all as a distinct concept, requires far more than arguable misapplication or misunderstanding of legal doctrine.

Substantively, the decision reaffirms:

  • the continued centrality of the McDonnell Douglas framework in pregnancy discrimination cases where only circumstantial evidence is presented,
  • the demanding standard for proving constructive discharge, and
  • the distinction between tragic or unfair outcomes and legally actionable discrimination.

Taken together, the opinion is a useful—if non‑precedential—guide for practitioners on:

  • drafting and administering employment arbitration agreements,
  • litigating contract formation challenges,
  • framing and defending FAA vacatur motions, and
  • structuring and proving pregnancy discrimination and constructive discharge claims in the shadow of arbitration.

While it does not change the law in any formal sense, it reinforces and concretizes key principles that will shape how similar disputes are handled in the Third Circuit and beyond.

Case Details

Year: 2025
Court: Court of Appeals for the Third Circuit

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