Seattle Partner Sarah Turner and Senior Counsel Daniel Culicover prevailed in the Washington State Court of Appeals, which affirmed the trial court’s ruling granting a motion to compel arbitration in favor of their client.
The plaintiff, an anesthesiologist, contracted with a third-party staffing agency to provide physicians, also known as locums tenens physicians. Her employment agreement with the third-party staffing company contained an arbitration provision.
GRSM's client, a medical practice group in the Tacoma area, contracted with the staffing company for short-term staffing needs, and the plaintiff was placed with the client. The client then assigned the plaintiff to work in a hospital in Tacoma. After several weeks, the client decided that it would not renew the plaintiff’s assignment.
After her assignment was not renewed, the plaintiff sued the client and the hospital, claiming she had been wrongfully terminated and that the defendants tortiously interfered with her contractual rights. However, the plaintiff did not sue the third-party staffing company.
The defendants moved to compel arbitration. While the defendants did not contract with the plaintiff directly, they argued that they could compel her to arbitrate her claims using the doctrine of equitable estoppel, relying on the arbitration provision in the plaintiff’s contract with the third-party staffing company. The trial court agreed with the defendants and granted the motion to compel arbitration. The plaintiff appealed the trial court's decision.
Turner and Culicover successfully argued the appeal before the Court of Appeals, Division II. The Court of Appeals issued a reported decision that unanimously affirmed the trial court decision. It found that the plaintiff’s claims against the defendants were intertwined with her agreement with the third-party staffing company. As a result, the defendants could rely on the arbitration provision of the plaintiff’s contract with the third-party staffing company to compel her to arbitrate her claims against the defendants, even though the defendants were not parties to this agreement.
This decision marks a significant win for businesses that rely on staffing agencies. It also serves as a reminder to companies that rely on staffing agencies to investigate whether their staffing agreements contain arbitration provisions.