Assent to Two‑Page Employment Arbitration Agreements and the Narrow Scope of Judicial Review of Arbitral Awards: Commentary on McMasters v. Restaurant Brands International, Inc. (3d Cir. 2025)

Assent to Two‑Page Employment Arbitration Agreements and the Narrow Scope of Judicial Review of Arbitral Awards: Commentary on McMasters v. Restaurant Brands International, Inc. (3d Cir. 2025)

I. Introduction

This Third Circuit opinion, though explicitly marked “NOT PRECEDENTIAL” and therefore not binding under the Court’s Internal Operating Procedures, offers a rich and concrete application of several recurring themes in modern employment and arbitration law:

  • How courts determine whether an employee assented to an arbitration agreement, particularly when the employee signed only part of a multi‑page document and later disclaims having seen the entire agreement.
  • The stringent limits the Federal Arbitration Act (“FAA”) places on courts’ power to vacate an arbitration award, even where the arbitrator may have made questionable factual or legal statements.
  • The interaction between arbitration law and substantive employment discrimination law, here under the Pregnancy Discrimination Act (Title VII) and the Pennsylvania Human Relations Act (“PHRA”).

The case arises from tragic personal circumstances. While working a closing shift at a Burger King restaurant operated by Carrols LLC, plaintiff Susan McMasters experienced severe cramping and vaginal bleeding. She attempted to find someone to relieve her so she could leave work and seek medical attention. Unable to secure coverage, and fearing she would lose her job if she left, she completed her shift and only then went to the hospital, where she learned she had suffered a miscarriage.

McMasters later resigned from her position, alleging that her working environment had become “not very pleasant” and that co‑workers and management were unresponsive or unsupportive after her loss. She brought suit asserting, among other claims:

  • Pregnancy discrimination and failure to accommodate under Title VII’s Pregnancy Discrimination Act and the PHRA; and
  • Constructive discharge premised on pregnancy‑based discrimination and hostile work environment.

The defendant employer (various Carrols/Burger King entities) moved to compel arbitration under an employment arbitration agreement that McMasters had signed when hired. The District Court (W.D. Pa.) granted the motion (McMasters I), arbitration proceeded, and the arbitrator granted summary judgment for Carrols on the remaining discrimination and constructive discharge claims. The District Court later confirmed the award and refused to vacate it (McMasters II).

On appeal, McMasters challenged two sets of orders:

  1. The order compelling arbitration (formation/assent issues under Pennsylvania contract law and federal arbitration law); and
  2. The order denying vacatur and confirming the arbitration award (standards under FAA § 10(a)(4)).

Judge Shwartz, writing for a unanimous panel (Judges Shwartz, Matey, and Scirica), affirmed across the board.

II. Summary of the Opinion

A. Compelling Arbitration: Assent to the Agreement

The Court first addressed whether the District Court properly compelled arbitration. The relevant facts:

  • At hiring, McMasters signed the second page of a two‑page arbitration agreement (the “Agreement”).
  • The signed page contained an “Employee Acknowledgment” where she agreed to arbitrate “Claims, as described above,” acknowledged she had read and understood the agreement, was informed of applicable rules and where to access them, and had the opportunity to ask questions.
  • The page she signed was labeled “2 of 2.”
  • The first page (which she claimed she never received) contained, among other things, the detailed definition of “Claims,” including Title VII and analogous state law claims.
  • McMasters admitted that signing the Agreement was a “condition of employment” and that she did not read it or ask questions, despite having the opportunity.
  • The employer presented evidence that its regular business practice was to provide both pages of the agreement, along with other onboarding documents and the employee handbook, at the time of hiring. Arbitration information was also available on a workplace poster and in the handbook, which McMasters admitted receiving.

Applying Pennsylvania contract law, the Third Circuit held that:

  • McMasters’ signature on the second page manifested assent to be bound by the entire Agreement, including the first page, regardless of whether she read the terms.
  • The fact that the signed page clearly referenced “Claims, as described above” and was marked “2 of 2” undermined her assertion she had no notice of a first page.
  • The employer’s evidence of its regular business practice of distributing both pages sufficed to support the District Court’s finding that she received the first page.
  • Her contention that page one was added later or not provided was rejected as creating no genuine dispute of material fact.

The panel consequently affirmed the order compelling arbitration.

B. Vacatur of the Arbitration Award: Narrow FAA Standards

The Court then turned to McMasters’ challenge to the order denying her motion to vacate the award and granting Carrols’ motion to confirm it.

Following arbitration, the arbitrator had:

  • Granted summary judgment to Carrols on:
    • Her Title VII/PHRA pregnancy discrimination claim (including failure to accommodate); and
    • Her constructive discharge claim.
  • Found that:
    • Carrols had articulated non‑discriminatory reasons for its inability to send coverage the night of the miscarriage (manager in hospital, manager on medical leave, employee had been drinking, etc.).
    • McMasters had not shown these reasons were pretextual.
    • The record contained no direct evidence of pregnancy discrimination to bypass the McDonnell Douglas burden‑shifting framework.
    • The working conditions after her return — including a peer’s refusal to speak with her and management’s failure to intervene — were not so “intolerable” that a reasonable person would have felt forced to resign, so constructive discharge was not established.

McMasters sought vacatur under the FAA, arguing, in substance, that:

  • The arbitrator’s statement that the company “could not have been responsible for her miscarriage” was irrational, particularly as wrongful death and survival claims were already dismissed; and
  • The arbitrator’s comment that “direct evidence” analysis applied only to disability claims reflected a serious legal error showing the arbitrator exceeded his powers or acted in “manifest disregard” of the law.

The Third Circuit held that none of these contentions justified vacatur under 9 U.S.C. § 10(a)(4):

  • The challenged comment about responsibility for the miscarriage was a stray remark that the arbitrator did not actually rely on in denying her discrimination claims; there remained “sufficient substance” in the legal and factual analysis to meet the “rationality threshold.”
  • Even assuming the arbitrator’s statement about “direct evidence” and disability law was mistaken, the arbitrator in fact correctly applied the McDonnell Douglas burden‑shifting framework to the pregnancy discrimination claim because there was no direct evidence of discriminatory intent.
  • On the full record, the arbitrator’s analysis was “rationally derived” from the submissions and evidence, and did not amount to a “completely irrational” award or a manifest disregard for governing legal principles.

Accordingly, the Court affirmed the District Court’s decision confirming the arbitration award.

III. Detailed Analysis

A. Precedents and Authorities Cited

1. Arbitration Agreement Formation and Compulsion

  • Flintkote Co. v. Aviva PLC, 769 F.3d 215 (3d Cir. 2014)
    Cited for two propositions:
    • The standard of review for orders compelling arbitration is plenary (de novo) when issues of contract formation are raised.
    • To compel arbitration, a court must confirm the existence of a “valid agreement to arbitrate between the parties.”
  • White v. Sunoco, Inc., 870 F.3d 257 (3d Cir. 2017)
    Used to explain that when matters outside the pleadings are considered on a motion to compel arbitration, the court applies the summary judgment standard of Federal Rule of Civil Procedure 56. Thus, arbitration may be compelled only if there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law.
  • Blair v. Scott Specialty Gases, 283 F.3d 595 (3d Cir. 2002)
    Emphasizes that under Pennsylvania law, formation of a contract, including an arbitration agreement, requires both parties to manifest an intention to be bound.
  • Simeone v. Simeone, 581 A.2d 162 (Pa. 1990)
    A leading Pennsylvania Supreme Court case affirming the rule that a person who signs a contract is “normally bound by [the] agreement” regardless of whether he or she read or fully understood the terms. This principle underlies the panel’s core conclusion: by signing page 2, McMasters manifested assent to the full agreement, including the terms described on page 1.
  • Denlinger, Inc. v. Dendler, 608 A.2d 1061 (Pa. Super. Ct. 1992)
    Reinforces Simeone: one who signs a document and has the capacity to understand it is bound by the signature.
  • Tinder v. Pinkerton Sec., 305 F.3d 728 (7th Cir. 2002)
    The Third Circuit uses this as an analogy. In Tinder, employees challenged receipt of an arbitration agreement; employers proved dissemination through manager testimony about standard practice. The Seventh Circuit accepted that proof despite plaintiffs’ denials. Similarly, here Carrols’ evidence of its habitual practice of furnishing both pages of the agreement supported the District Court’s factual finding that McMasters received the entire agreement.
  • Federal Rule of Evidence 406 – Habit; Routine Practice
    The Court cites Rule 406 to support reliance on habit and routine practice evidence. For proof of document delivery, an employer’s properly substantiated regular practice can show that what is normally done was done in a specific instance, even if the employee denies it.
  • Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967)
    A foundational arbitration case distinguished between:
    • Challenges to the validity of the contract as a whole (for the arbitrator); and
    • Challenges to the formation or existence of the arbitration agreement itself (for the court).
    Here, McMasters challenged contract formation (i.e., whether she assented) at the motion-to-compel stage, which is an issue for the court. The panel notes this to explain that her failure to re‑raise those formation arguments in arbitration did not waive them for appellate review.

2. Review and Vacatur of Arbitration Awards

  • Federal Arbitration Act, 9 U.S.C. § 10(a)(4)
    Provides that a court may vacate an award 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.” This is the central statutory basis for McMasters’ vacatur attempt.
  • CPR Mgmt., S.A. v. Devon Park Bioventures, L.P., 19 F.4th 236 (3d Cir. 2021)
    Clarifies that arbitrators “overstep” § 10(a)(4) limits when they:
    • Grant relief that cannot be rationally derived from the parties’ agreement and submissions; or
    • Issue an award that is so completely irrational that it lacks any support.
    This standard frames the panel’s review of whether the award in this case was rationally connected to the issues and evidence.
  • Sutter v. Oxford Health Plans LLC, 675 F.3d 215 (3d Cir. 2012), aff’d, 569 U.S. 564 (2013)
    Cited for the concept that an award is valid so long as it is “rationally derived” from the agreement and submissions. Sutter stresses that courts do not ask whether the arbitrator’s interpretation is correct, only whether it can be reasonably justified.
  • Whitehead v. Pullman Grp., LLC, 811 F.3d 116 (3d Cir. 2016)
    Cited for the appellate standard of review: legal conclusions are reviewed de novo, factual findings for clear error in appeals from orders denying vacatur.
  • Metromedia Energy, Inc. v. Enserch Energy Servs., Inc., 409 F.3d 574 (3d Cir. 2005)
    Emphasizes that vacatur is inappropriate when an arbitrator “merely erroneously interprets[] the law.” This connects to the “manifest disregard of law” gloss: not every legal error by an arbitrator justifies vacatur.
  • Brentwood Med. Assocs. v. United Mine Workers of Am., 396 F.3d 237 (3d Cir. 2005)
    Used for the proposition that where an arbitrator’s decision includes some questionable or arguably improper reasoning, vacatur is not required if there remains “sufficient substance in the remainder of the discussion to pass the minimum rationality threshold.”
  • Sutter v. Oxford Health Plans LLC, 675 F.3d 215, 220 n.2 (3d Cir. 2012)
    Footnote 2 is cited for the idea that “manifest disregard of law” is best understood not as an independent non‑statutory ground but as a judicial gloss on § 10(a)(4) and other statutory grounds, reinforcing the narrowness of judicial review.

3. Substantive Employment Discrimination Law

  • Doe v. C.A.R.S. Prot. Plus, Inc., 527 F.3d 358 (3d Cir. 2008), clarified, 543 F.3d 178 (3d Cir. 2008)
    Cited for the elements and framework of Title VII pregnancy discrimination claims, and specifically the application of the McDonnell Douglas burden‑shifting analysis when direct evidence is absent.
  • Mandel v. M & Q Packaging Corp., 706 F.3d 157 (3d Cir. 2013)
    Provides the standard for constructive discharge: an employer allows discriminatory conditions to exist that are “so intolerable that a reasonable person subject to them would resign.” The arbitrator applied this, and the panel agreed that the post‑incident environment described by McMasters did not meet that threshold.
  • Qin v. Vertex, Inc., 100 F.4th 458 (3d Cir. 2024)
    Quoted to define direct evidence of discrimination as evidence “so revealing of discriminatory animus” that the McDonnell Douglas burden-shifting is unnecessary.

B. The Court’s Legal Reasoning

1. Formation and Assent to the Arbitration Agreement

The threshold question was whether McMasters was bound by the arbitration agreement. The court applied ordinary Pennsylvania contract principles to determine whether there was a valid agreement to arbitrate.

Key aspects of the Court’s reasoning:

  1. Signature as Manifestation of Assent
    The Court emphasized that McMasters’ undisputed signature on the second page of the Agreement is powerful evidence of assent:
    • Under Simeone and Denlinger, a party who signs a document is normally bound by its terms, whether or not she has read or fully understood them.
    • The signed page contained explicit language that she:
      • Agreed to arbitrate “Claims, as described above,” directly incorporating the description on page one;
      • Had read and understood the Agreement;
      • Had the chance to ask questions (and answered them); and
      • Was told the applicable arbitration rules and where to access them.
    These acknowledgements strongly suggest an informed decision to accept the arbitration terms as part of the employment relationship. Even if she did not in fact read the documents, Pennsylvania law does not reward wilful ignorance where a party has the opportunity to do so.
  2. Evidence of the First Page and Business Practice
    McMasters argued that she never received the first page, or that it was added after she signed. The panel treated this as both a factual challenge and a legal argument for lack of assent.
    • The Court noted compelling circumstantial indicators that a first page existed and was intended to accompany the second:
      • The second page explicitly refers to “Claims, as described above.”
      • The bottom of the signed page is labeled “2 of 2.”
    • Carrols submitted evidence that as a routine practice, it provided both pages of the agreement as part of standard onboarding, alongside the employee handbook, which also addressed arbitration.
    • Under Fed. R. Evid. 406 and cases like Tinder, such evidence of regular business practice is admissible, and courts may rely on it to infer that the same procedure was followed for a particular employee.
    • The District Court found that Carrols’ version of events was credible and that McMasters did receive both pages. On appeal, the Third Circuit agreed that this factual finding was adequately supported and that McMasters’ contrary assertion did not create a genuine issue of material fact sufficient to derail a motion to compel.
  3. Objective vs. Subjective Assent
    The Court applied an objective theory of assent. Even if McMasters subjectively did not notice “2 of 2” or did not understand that she was agreeing to arbitrate Title VII claims, her:
    • Signature,
    • Acknowledgment of understanding,
    • Recognition that the agreement was a condition of employment,
    • Access to related notices (handbook, poster),
    together mean that a reasonable person in her position would understand she was entering into an arbitration agreement covering employment‑related statutory claims.
  4. No Legal Defect in the Agreement’s Scope
    McMasters did not dispute that, if an agreement existed, its scope covered her Title VII/PHRA claims. The Agreement defined “Claims” to include Title VII and similar state law claims, and there was no ambiguity on that point. Thus, once assent was established, compelling arbitration of these claims was straightforward.

2. Judicial Review of the Arbitration Award

Having confirmed that McMasters was properly required to arbitrate, the Court then examined whether the District Court correctly refused to vacate the arbitrator’s award.

Key steps in the panel’s analysis:

  1. FAA’s Narrow Vacatur Standard
    Under 9 U.S.C. § 10(a)(4), vacatur is available only where arbitrators:
    • Exceed their powers; or
    • So imperfectly execute them that no mutual, final, and definite award was made.
    The Court reiterated the well‑established reality that:
    “An arbitrator ‘oversteps’ these limits by granting relief in a form that cannot be ‘rationally derived’ from the parties’ submissions or issues an award that is so completely irrational that it lacks support altogether.” (citing CPR Mgmt.)
    In practice, this means:
    • Courts do not review the correctness of the arbitrator’s legal or factual conclusions.
    • Vacatur is warranted only where the arbitrator’s decision is effectively arbitrary, ignores the contract and issues, or betrays a deliberate disregard for clearly controlling law.
  2. Arbitrator’s Application of the Law
    The Court determined that the arbitrator:
    • Correctly identified and applied the legal standards for:
      • Pregnancy discrimination under Title VII/PHRA, using Doe v. C.A.R.S. and McDonnell Douglas; and
      • Constructive discharge under Mandel.
    • Considered the relevant factual record concerning McMasters’ efforts to obtain coverage, the reasons colleagues or managers could not step in, the actual employee who did come in, and the post‑incident workplace environment.
    • Rationally concluded that:
      • Carrols’ reasons for failing to send additional coverage were legitimate operational constraints, not pretext for discrimination; and
      • The post‑incident treatment — though undoubtedly distressing in a human sense — did not reach the legal threshold of “intolerable” conditions necessary for constructive discharge.
    None of this demonstrated that the arbitrator strayed outside the issues submitted or that the award was irrational.
  3. Alleged Erroneous Statements and Their Effect
    The Court acknowledged two statements criticized by McMasters:
    • The arbitrator’s comment that Carrols “could not have been responsible for her miscarriage.”
    • The suggestion that the “direct evidence” framework applies only to disability claims.
    The panel treated these as follows:
    • Miscarriage responsibility remark: The panel found this remark irrelevant to the core legal analysis of the remaining discrimination and constructive discharge claims. Those wrongful death and survival claims were already dismissed. Crucially, the arbitrator did not rest the decision denying her discrimination and constructive discharge claims on a finding about physical causation of the miscarriage. Drawing on Brentwood, the Court held that, even if that sentence were removed, the remainder of the analysis would still comfortably exceed the minimum rationality threshold.
    • Direct evidence remark: Even if the arbitrator misunderstood the doctrinal reach of “direct evidence” by suggesting it applied only in disability cases, any such mistake was harmless for vacatur purposes:
      • The arbitrator correctly stated and applied the McDonnell Douglas standard because McMasters displayed no evidence that met the Qin-level test for direct evidence — i.e., evidence “so revealing of discriminatory animus” that burden-shifting is unnecessary.
      • The arbitrator’s application of law thus reflected no manifest disregard of controlling Title VII doctrine, only a possible doctrinal misstatement that did not affect the choice of analytical framework.
  4. “Manifest Disregard of Law” as Judicial Gloss
    By referencing Sutter and Metromedia, the panel confirmed that:
    • “Manifest disregard of the law” is not an independent, free‑floating ground for vacatur, but a way of describing the rare case in which the award truly falls within § 10(a)’s scope (e.g. where the arbitrator knew the controlling law and deliberately ignored it).
    • Here, nothing indicated such deliberate flouting of the law; at most, any errors were ordinary legal mistakes, which are insufficient to disturb an arbitration award under the FAA.

IV. Impact and Practical Significance

A. Impact on Arbitration Agreement Drafting and Enforcement

Although non‑precedential, this opinion reinforces several practical lessons for employers and employees:

  1. Multi‑Page Agreements: Clear Cross‑References Matter
    Where a signed page clearly references other pages (e.g., “Claims, as described above,” and page numbering such as “2 of 2”), courts are likely to treat the entire document as integrated and binding. Employees cannot easily avoid arbitration simply by claiming they did not see earlier pages.
  2. Importance of Standardized Onboarding Processes
    Employers gain a significant evidentiary advantage by having clear, consistent onboarding procedures (checklists, training, signed receipts, etc.) and by documenting that process. As this opinion and Tinder suggest, evidence of such a routine practice can be used to prove that an employee received an arbitration agreement, even if the employee denies it years later.
  3. Employee Acknowledgements Are Powerful
    The “Employee Acknowledgment” language — confirming receipt, understanding, opportunity to ask questions, and knowledge of where to find rules — is highly influential. It undercuts later claims that the employee was unaware of the arbitration obligation or misled about its scope.
  4. Handbooks and Posters as Supplemental Notice
    The Court notes that arbitration information was also available in the employee handbook and on a workplace poster. While these may not by themselves constitute binding agreements, they reinforce the argument that the employee had multiple sources of notice about arbitration and thus that her signature was an informed part of a broader scheme.

B. Impact on Challenges to Arbitration Awards

The opinion underscores how difficult it is to overturn an adverse arbitration award:

  1. Ordinary Legal or Factual Errors Are Not Enough
    Even if an arbitrator:
    • Makes stray or ill‑considered remarks;
    • Makes arguable doctrinal mistakes; or
    • Reaches a debatable conclusion on pretext or constructive discharge,
    a court will not vacate the award so long as the overall decision can be traced rationally to the legal standards and the record.
  2. Manifest Disregard Is a Narrow Doctrine
    This case reinforces a consistent theme in Third Circuit practice following Sutter and Metromedia: “manifest disregard” is not an invitation to re‑try the case in federal court. It describes a high threshold usually involving:
    • Clear controlling law;
    • An arbitrator’s explicit awareness of that law; and
    • A conscious decision to ignore it.
    None of that was present here.
  3. Employment Discrimination Claims Are Not Treated Differently Once Arbitrated
    The panel shows no inclination to carve out special review rules for civil rights or discrimination claims in arbitration. Once the parties validly agree to arbitrate such claims:
    • The same narrow FAA standards apply; and
    • The reviewing court defers to the arbitrator’s application of Title VII and similar statutes, absent the rare § 10(a) grounds.

C. Substantive Employment Law: Pregnancy Discrimination and Constructive Discharge

On the merits of the discrimination claim, the case illustrates several substantive employment‑law points, even though these came through the lens of arbitral review:

  • Pregnancy Discrimination Claims under Title VII/PHRA
    The arbitrator (and the panel) treated pregnancy discrimination claims under the PHRA as coextensive with Title VII claims under federal law — a well‑established doctrinal alignment.
  • Failure to Accommodate vs. Operational Constraints
    The night of the miscarriage, several would‑be replacements were indisposed:
    • One had left work and consumed alcohol (triggering a “no alcohol before work” policy).
    • A manager was in the hospital; another on medical leave.
    • One crew member did come in to assist.
    The arbitrator credited these reasons as non‑discriminatory operational constraints rather than evidence of animus or unlawful failure to accommodate.
  • Constructive Discharge is a High Bar
    That McMasters found the post‑incident workplace “not very pleasant,” faced a colleague who stopped communicating with her, and experienced management indifference was insufficient under Mandel. The conditions, although distressing, were not so objectively “intolerable” that a reasonable person would feel compelled to resign.

V. Complex Concepts Simplified

1. Arbitration Agreements in Employment

An arbitration agreement is a contract clause where parties agree that instead of going to court, disputes will be resolved before a private arbitrator. In employment, this often means claims like discrimination, harassment, or wage disputes must be arbitrated.

Important features:

  • Arbitration is typically binding and final.
  • Appeals are extremely limited under the FAA.
  • By signing an arbitration agreement, an employee often gives up the right to have such claims decided by a jury in court.

2. “Assent” and Contract Formation

“Assent” is the legal term for agreeing to be bound by a contract. Courts look to objective signs of assent, not private thoughts. A signature is the most common objective sign.

Key point from this case: If you sign the last page of a two‑page contract that clearly refers to the first page and says “2 of 2,” you are generally considered to have agreed to everything on both pages, even if you did not read the first page.

3. Summary Judgment

“Summary judgment” is a way for a court (or arbitrator) to decide a case without a trial when there is:

  • No genuine dispute about the key facts; and
  • One party is entitled to win as a matter of law.

In arbitration, the arbitrator can apply a similar concept to dispose of claims when, even taking the evidence in the light most favorable to the non‑moving party, no reasonable factfinder could rule in that party’s favor.

4. McDonnell Douglas Burden‑Shifting

In many discrimination cases (including pregnancy discrimination where there is no direct evidence), courts and arbitrators use the McDonnell Douglas burden‑shifting framework:

  1. Plaintiff’s Prima Facie Case — the plaintiff must show:
    • She is in a protected class (here, pregnant or recently pregnant);
    • She suffered an adverse employment action (e.g., termination, failure to accommodate, constructive discharge); and
    • Circumstances suggest discrimination (e.g., more favorable treatment of non‑pregnant employees in similar situations).
  2. Employer’s Legitimate, Non‑Discriminatory Reason — the employer must then articulate a facially legitimate reason for its action (e.g., genuine staffing limitations).
  3. Pretext — the burden returns to the plaintiff to prove that the employer’s stated reason is not the true reason but a cover (pretext) for discriminatory intent.

5. Direct Evidence vs. Circumstantial Evidence

Direct evidence of discrimination is evidence that, if believed, shows discriminatory intent without inference or presumption, e.g., “We’re not promoting you because you’re pregnant.”

Circumstantial evidence requires the factfinder to infer intent from surrounding facts, such as patterns of differential treatment or timing.

If a plaintiff has strong direct evidence, she might be able to bypass the McDonnell Douglas framework. Here, the panel agreed that McMasters had no such direct evidence; her evidence was circumstantial and thus properly analyzed under McDonnell Douglas.

6. Constructive Discharge

“Constructive discharge” occurs when an employee resigns because conditions are so bad that a reasonable person in her position would feel she has no choice but to quit. The bar is high:

  • Merely unpleasant, stressful, or unfair conditions are often not enough.
  • The environment must be objectively, not just subjectively, intolerable.

7. Manifest Disregard of Law

“Manifest disregard of the law” is a term courts formerly used to explain when an arbitration award could be vacated because the arbitrator knew the correct law and deliberately ignored it.

Post‑Hall Street and in Third Circuit practice, this concept is treated as a way of describing an award that falls within the statutory grounds of § 10(a) (particularly § 10(a)(4)), rather than a freestanding basis for vacatur. It remains an extremely narrow doctrine.

8. “Not Precedential” Opinions

The Court begins by noting that this disposition is “NOT PRECEDENTIAL” under I.O.P. 5.7 and does not constitute binding precedent. That means:

  • The decision is not binding on future panels of the Third Circuit or district courts in the circuit.
  • It can still be cited as persuasive authority, offering guidance on how the court may approach similar issues, especially when no binding precedent squarely addresses them.

VI. Conclusion: Key Takeaways and Broader Significance

This opinion in McMasters v. Restaurant Brands International, Inc. illustrates, in a concrete and fact‑sensitive way, several enduring principles of arbitration and employment law in the Third Circuit:

  • Assent to Arbitration via Signature: An employee’s signature on a page that clearly references another page of a two‑page agreement, combined with evidence of the employer’s standard practice and supplemental written notices, will almost invariably be treated as assent to the entire arbitration agreement, even if the employee later denies reading or seeing every page.
  • FRE 406 and Business Practice Evidence: Employers can use evidence of their consistent, habitual onboarding practices to show that employees received arbitration materials. This can defeat factual challenges to arbitration formation at the motion‑to‑compel stage.
  • Narrow Review of Arbitral Awards: Once an employment dispute is properly submitted to arbitration, the FAA tightly circumscribes judicial review. Courts will not vacate awards for mere legal or factual error, or for isolated, arguably misguided remarks, so long as the outcome is rationally connected to the agreement, the submissions, and applicable law.
  • Pregnancy Discrimination and Constructive Discharge: The case reaffirms that pregnancy discrimination under the PHRA is analyzed under the same framework as Title VII, and that constructive discharge remains a demanding standard, requiring truly intolerable conditions from an objective standpoint.

Though non‑precedential, this decision serves as a practical roadmap for:

  • How courts in the Third Circuit are likely to handle formation challenges to employment arbitration agreements that are partially signed or disputed in hindsight; and
  • How stringently courts will confine themselves to the narrow vacatur grounds in § 10(a)(4), even when precipitous personal facts and arguable arbitral misstatements are present.

For employers, the opinion underscores the importance of clear, well‑documented onboarding processes and acknowledgement language. For employees and their counsel, it underscores the urgency of understanding arbitration agreements at the point of hiring and the difficulty of undoing them after the fact, as well as the limited prospects for setting aside arbitration awards even in emotionally powerful cases involving pregnancy loss.

Case Details

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

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