Hatch v. Optum Services Inc

IN THE UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF ARKANSAS

CENTRAL DIVISION

TAQUILLA HATCH PLAINTIFF

v. Case No. 4:21-CV-1097-LPR

OPTUM SERVICES, INC. DEFENDANT

ORDER

Plaintiff Taquilla Hatch has filed this lawsuit against her former employer, Optum

Services, Inc. She alleges that Optum racially discriminated against her in violation of Title VII

of the Civil Rights Act of 1964 and breached an oral contract to hire her full-time after six to nine

months of satisfactory job performance.1 Optum filed a Motion to Compel Arbitration and to

Dismiss or Stay this Case.2 For the reasons provided below, Optum’s Motion is DENIED.3

BACKGROUND

Maxim Healthcare Services, Inc. acts as a staffing agency for multiple corporate clients in

need of employees.4 Optum is one of Maxim’s clients.5 In September of 2018, Maxim hired Ms.

1 Compl. (Doc. 1) ¶¶ 16, 36–48.

2 Def.’s Mot. to Compel Arb. (Doc. 7).

3 Optum filed its Motion to Compel Arbitration on March 24, 2022. Id. Under Local Rule 7.2(b), Ms. Hatch’s

Response was due by April 7, 2022. Ms. Hatch did not request an extension of time. Instead, she filed her Response

on April 12, 2022. Pl.’s Resp. to Mot. to Compel Arb. (Doc. 9); Pl.’s Br. in Supp. of Pl.’s Resp. to Mot. to Compel

Arb. (Doc. 10). The next day, Ms. Hatch filed a Motion asking the Court to accept her untimely Response. Pl.’s Mot.

to Accept Belated Resp. (Doc. 11). Because the Motion failed to provide a sufficient reason for the late Response,

the Court denied the Motion and struck Ms. Hatch’s Response from the record. Order (Doc. 13). At the June 2, 2022

hearing, however, after it became fairly apparent that both parties had briefed the crucial issue in the Motion using the

wrong state’s law, the Court ordered supplemental briefing. Clerk’s Mins. (Doc. 15). Ms. Hatch timely filed her

supplemental brief on June 15, 2022. Pl.’s Resp. in Opp’n to Mot. to Compel Arb. (Doc. 16). Thus, for the purposes

of this Order, the Court has considered Ms. Hatch’s June 15, 2022 brief, but not her April 12, 2022 submission.

4 Compl. (Doc. 1) ¶¶ 9–10; see also June 2, 2022 Hr’g Tr. (Rough) at 15.

5 Compl. (Doc. 1) ¶ 10.

Hatch to work as a temporary Community Health Worker at Optum.6

As part of the hiring process, Maxim and Ms. Hatch entered into a Mutual Agreement to

Arbitrate (“Agreement”).7 The Agreement is signed by Ms. Hatch and Maxim.8 Optum is not a

signatory to the Agreement. The specific language of the Agreement is important to the resolution

of the pending Motion. So the Court attaches the full Agreement to this Order. The Agreement

opens as follows:

In return for the mutual agreement to arbitrate contained herein and my application

for and/or my employment with MAXIM HEALTHCARE SERVICES, INC. or

any affiliated company and/or any of its parents, subsidiaries, affiliates, agents,

officers, directors, successors, agents, assigns, employees (hereinafter referred to

as “MAXIM”), Employee (referred to in this Agreement as “EMPLOYEE”, “me”,

or “my”) and MAXIM (collectively, “the parties”) agree that:

Any disputes, claims, complaints or controversies (“Claim(s)”) between me and

MAXIM arising out of and/or directly or indirectly related to my application for

employment with MAXIM, my employment with MAXIM, the terms and

conditions of my employment with MAXIM, and/or the termination of my

employment with MAXIM, will be resolved by arbitration and NOT by a court or

jury as set forth herein.

MAXIM believes that it is in the best interest of both EMPLOYEE and MAXIM to

resolve Claim(s) without litigation. Most Claims are resolved internally through

MAXIM’s grievance and complaint processes. When such Claims are not resolved

internally, EMPLOYEE and MAXIM agree to resolve through final and binding

arbitration as described below.9

The Agreement then identifies the “Claims covered by [the] Mutual Agreement to Arbitrate.”10

6 Id. ¶¶ 9–10, 14. Although Maxim called Ms. Hatch a Community Health Worker, Optum called her a Mental Health

Assessor. Compare id. ¶ 9 (“The plaintiff was hired by Maxim . . . working as a . . . Community Health Worker for

Optum . . . .”), with id. ¶ 19 (“When the plaintiff was hired by [Optum], she was hired in as a mental health assessor.”).

It appears these are simply different names for the same job.

7 Ex. A to Def.’s Mem. in Supp. of Mot. to Compel Arb. (Doc. 8-1).

8 Id. at 8. This exhibit has two sets of page numbers that do not align with each other. One set is the numbering of

the original document (at the bottom of the pages). The other is the set assigned by the Court’s e-filing system (at the

top of the pages). The Court will use the numbers at the top of the pages, assigned by the e-filing system, when

referencing specific pages of the Agreement.

9 Id. at 2.

10 Id. (emphasis omitted).

Specifically, the Agreement provides:

EMPLOYEE and MAXIM mutually agree to arbitrate before a neutral arbitrator

exclusively on an individual basis (and not on a class, collective or representative

basis) any and all Claims between EMPLOYEE and MAXIM, that arise out of or

relate to EMPLOYEE’s recruitment, application, employment or separation from

employment with MAXIM, including Claims involving any current or former

officer, director, shareholder, agent or employee of MAXIM, whether the Claims

arise under common law, or in tort, contract, or pursuant to a statute, regulation, or

ordinance now in existence or which may in the future be enacted or recognized.

Including, but not limited to, the following Claims . . . .11

A long (but non-exhaustive) list of claims follows, including “Claims for . . . breach of contract” and

“Claims for discrimination . . . under any and all federal, state, or local statutes . . . .”12

In a later section of the Agreement—titled “Class, collective or representative action

waiver”—the parties agree that “[t]he arbitrator’s authority to resolve disputes and make awards

under this Agreement to arbitrate is limited to disputes between: (i) EMPLOYEE and MAXIM;

and (ii) EMPLOYEE and any current or former officers, directors, employees and agents, if such

individual is sued for conduct arising out of the[] scope of his/her employment with MAXIM.”13

They further agree that “[n]o arbitration award or decision will have any preclusive effect as to

issues or Claims in any dispute with anyone who is not a named party to the arbitration.”14

Closer to the end of the document, the Agreement also notes that it “supersedes any prior

agreement between the parties concerning the subject matter of Claims resolution, including any

disputes, claims, complaints or controversies arising between EMPLOYEE and MAXIM, arising

out of and/or directly or indirectly related to [the EMPLOYEE’S] employment with MAXIM, the

11 Id.

12 Id.

13 Id. at 4. The Agreement reads: “if such individual is sued for conduct arising out of their scope of his/her

employment . . . .” Id. (emphasis added). The Court finds that the drafters must have intended to write “the” where

they erroneously wrote “their.” Thus, the Court chalks “their” up to a scrivener’s error.

14 Id.

terms and conditions of [that] employment, [the EMPLOYEE’S] application for employment

and/or termination of [that] employment.”15

One does not have to be clairvoyant to see the $64,000 question coming down the pike

here. The Agreement is replete with specific references to Maxim.16 It is also replete with specific

references to claims between an employee and Maxim.17 But Maxim is not a defendant in our

case. Optum is. And Optum is (therefore) the one seeking to force arbitration based on the

Agreement. Can Optum do so? That is a harder question than it seems. In any event, before

turning to that question, a little more background is necessary.

During her time at Optum, Ms. Hatch worked as a Mental Health Assessor.18 In that

capacity, she performed mental health assessments on patients in “homes, hospitals, and juvenile

detention facilities . . . .”19 Ms. Hatch alleges in her Complaint that “Optum dictated [her] work

schedule, and . . . provided [her] with . . . a computer, cell phone, and internet hot spot.”20 If Ms.

Hatch needed time off or to arrive to work tardy, she would coordinate with Optum officials.21

According to Ms. Hatch, she only dealt with Maxim “to receive her paycheck[,] to take a

[tuberculosis] skin test once per year,” and when Optum notified Maxim of performance issues.22

15 Id. at 6–7.

16 See, e.g., id. at 2.

17 Id.

18 Compl. (Doc. 1) ¶¶ 9, 19. As far as the Court can tell, Optum and Ms. Hatch did not have a written employment

agreement. See June 2, 2022 Hr’g Tr. (Rough) at 17. For that matter, it is not apparent that Maxim and Ms. Hatch

had a written employment agreement (to be distinguished from their agreement to arbitrate) either.

19 Compl. (Doc. 1) ¶ 21.

20 Id. ¶ 11.

21 Id. ¶ 12.

22 Id. ¶¶ 13, 15. Optum does not dispute these alleged facts. Indeed, Optum embraces them in its argument in support

of its Motion to Compel Arbitration. Def.’s Suppl. Mem. in Supp. of Mot. to Compel Arb. (Doc. 17) at 6–7. Based

on these alleged facts, Optum argues that Ms. Hatch must be making an assertion that Optum and Maxim “act[ed]

jointly and interdependently,” and thus were joint employers. Id. at 7. According to Optum, if Maxim and Optum

Ms. Hatch alleges that, at the beginning of her work with Optum, an Optum manager or

supervisor told her that she would be converted from a part-time temporary employee to a full-

time employee within six to nine months of her hire.23 Conversion to full-time employment would

have brought with it enhanced benefits, including a pay raise, bonuses, new insurance benefits,

paid time off, holiday time off, and a 401(k).24 Understandably, after nine months, Ms. Hatch

sought conversion to a full-time employee position. But she was not successful.

According to Ms. Hatch, she spoke multiple times with her first Optum supervisor, Mr.

David Eidt, about obtaining full-time employee status.25 She alleges that Mr. Eidt told her that she

had “exemplary” performance and that he would “submit her name for recommendation to move

to a full-time position.”26 Sometime later, in February of 2021, Ms. Hatch’s new supervisor, Ms.

Wanda Collins, allegedly told her similar things.27 Still, she was not hired (i.e., converted to) full-

time. Because of this, Ms. Hatch resigned her position with Optum on April 1, 2021.28

Ms. Hatch maintains that she was not hired full-time because she is black. She notes that

her white female colleague, Ms. Jennifer Richards, was converted to a full-time employee within

were Ms. Hatch’s joint employers, then either should be able to enforce the Agreement that governs claims arising out

of the employment contemplated by the Agreement. Id. at 6, 9.

23 Compl. (Doc. 1) ¶ 16. The Complaint is not crystal clear on whether an Optum employee or a Maxim employee

made this statement. The Complaint alleges only that “plaintiff was told that within a period of six (6) to nine (9)

months of her hire, she would be hired as a full-time employee of Optum.” Id. At the hearing on the Motion to

Compel Arbitration, however, counsel for Ms. Hatch clarified that the Complaint was alleging that a manager or

supervisor from Optum made the statement. See June 2, 2022 Hr’g Tr. (Rough) at 24–26. Optum does not expressly

deny the existence of an oral contract. And it implicitly recognizes in its briefing that Ms. Hatch was “eligible for

conversion” to a full-time position after a certain period of time as a temporary worker. Def.’s Mem. in Supp. of Mot.

to Compel Arb. (Doc. 8) at 5–6.

24 Compl. (Doc. 1) ¶¶ 31–32.

25 Id. ¶¶ 24–25.

26 Id.

27 Id. ¶ 34.

28 Id. ¶ 35.

nine months of employment.29 She further notes that this occurred despite (1) what Ms. Hatch saw

as Ms. Richards’s “substandard work performance” and (2) Ms. Richards’s husband “call[ing] and

curs[ing] out [an Optum] management official.”30

Ms. Hatch filed a Charge of Discrimination with the Equal Employment Opportunity

Commission on April 9, 2021.31 The EEOC issued a Dismissal and Notice of Rights letter on

August 16, 2021.32 Ms. Hatch filed this lawsuit on November 15, 2021.33

DISCUSSION

Optum’s Motion to Compel Arbitration implicates the Federal Arbitration Act. Under that

Act, and controlling Eighth Circuit precedent, the general rule for the Court to follow in resolving

this Motion is clear: “[W]hen reviewing an arbitration clause, [the Court] ask[s] only (1) whether

there is a valid arbitration agreement and (2) whether the particular dispute falls within the terms

of that agreement.”34 Neither party argues that the Agreement is invalid. And there is nothing on

the face of the Agreement or in the record that in any way suggests the Agreement is invalid.35

Accordingly, for purposes of this Order, the Court assumes that the Agreement is valid. The real

question is “whether the particular dispute falls within the terms of that agreement.”36

29 Id. ¶¶ 26, 28.

30 Id. ¶¶ 28–30.

31 Ex. A to Compl. (Doc. 1) at 9–10.

32 Ex. B to Compl. (Doc. 1) at 11.

33 Compl. (Doc. 1).

34 Faber v. Menard, Inc., 367 F.3d 1048, 1052 (8th Cir. 2004).

35 This is true regardless of whether Arkansas law (the law of the forum state) or Maryland law (the law designated in

the parties’ Agreement) is applied to analyze the validity of the Agreement. See Alltel Corp. v. Rosenow, 2014 Ark.

375, at 6 (2014) (“[T]he essential elements for an enforceable arbitration agreement are (1) competent parties, (2)

subject matter, (3) legal consideration, (4) mutual agreement, and (5) mutual obligation.”); Holmes v. Coverall N. Am.,

Inc., 336 Md. 534, 544, 649 A.2d 365, 370 (1994) (“Once a court determines that the making of the agreement to

arbitrate is not in dispute, its inquiry ceases, as the agreement to arbitrate has been established as a valid and

enforceable contract.”).

36 Faber, 367 F.3d at 1052.

One aspect of that question is easy to decide. The Agreement is quite clear that Title VII

discrimination and breach-of-contract claims fall within its scope.37 But there is another aspect of

the question that is more difficult. The Agreement is between only Maxim and Ms. Hatch.

Moreover, the Agreement only expressly covers claims “between” Maxim and Ms. Hatch.38 Does

a claim between Optum and Ms. Hatch “fall[] within the terms of [such an] agreement”?39 To

answer this query, the Federal Arbitration Act instructs courts to look to state law.40 In this case,

the arbitration agreement at issue includes a choice-of-law provision.41 Such a provision is

“binding, unless it can be shown that the enforcement of the clause would be unreasonable and

unfair.”42 Neither party has alleged the Agreement’s choice-of-law clause is unreasonable or

unfair.43 So the Court will follow the choice-of-law clause.44 That clause calls for the application

of Maryland law in the “interpretation, . . . construction, enforcement and performance” of the

Agreement.45

37 Ex. A to Def.’s Mem. in Supp. of Mot. to Compel Arb. (Doc. 8-1) at 2.

38 Id.

39 Faber, 367 F.3d at 1052.

40 “Neither [§ 2 or § 3 of the FAA] purports to alter background principles of state contract law regarding the scope

of [arbitration] agreements . . . .” Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630 (2009). “State law . . . is

applicable to determine which contracts are binding under § 2 [of the FAA] and enforceable under § 3 [of the FAA]

if that law arose to govern issues concerning the validity, revocability, and enforceability of contracts generally.” Id.

at 630–31 (cleaned up).

41 Ex. A to Def.’s Mem. in Supp. of Mot. to Compel Arb. (Doc. 8-1) at 7.

42 Provence v. Nat’l Carriers, Inc., 2010 Ark. 27, at 8, 360 S.W.3d 725, 729 (2010); see also Nelms v. Morgan Portable

Bldg. Corp., 305 Ark. 284, 287, 291, 808 S.W.2d 314, 315, 318 (1991) (finding that a contract clause designating

Texas law as governing when interpreting the contract was enforceable because it was “fair and reasonable”); Nat’l

Glass, Inc. v. J.C. Penney Props., Inc., 336 Md. 606, 610, 650 A.2d 246, 248 (1994) (holding that “parties to a contract

may agree as to the law which will govern their transaction” subject to the reasonableness and fundamental public

policy limitations set forth in the Restatement (Second) Conflict of Laws § 187(2) (1971)) (citation omitted).

43 See Def.’s Suppl. Mem. in Supp. of Mot. to Compel Arb. (Doc. 17) at 1–2; Pl.’s Resp. in Opp’n to Mot. to Compel

Arb. (Doc. 16) at 6–8.

44 Cf. Donaldson Co., Inc. v. Burroughs Diesel, Inc., 581 F.3d 726, 731–32 (8th Cir. 2009) (applying Mississippi law

to a similar question “based on the choice-of-law provision in the” agreement containing the arbitration provision).

45 Ex. A to Def.’s Mem. in Supp. of Mot. to Compel Arb. (Doc. 8-1) at 7.

Optum argues that, under Maryland law, it can essentially step into the shoes of Maxim

and force Ms. Hatch to arbitrate pursuant to the Agreement—even though Optum itself did not

sign the Agreement. To support its position, Optum invokes two judicial doctrines that allow (in

limited circumstances) a non-signatory to enforce an arbitration agreement against a signatory to

that agreement.46 As explained below, neither doctrine applies to the facts of this case. Moreover,

even if one did, all that would mean is that Optum could theoretically enforce the Agreement.

Given the express language of the Agreement—specifically limiting claims to those between Ms.

Hatch and Maxim—Ms. Hatch’s claims against Optum do not fall within the Agreement’s scope.

I. The Ability of a Non-Signatory to Enforce an Arbitration Agreement

Optum argues that it can enforce the Agreement for two reasons. First, Optum contends

that it was an intended third-party beneficiary of the Agreement.47 Second, Optum argues that Ms.

Hatch is equitably estopped from refusing to arbitrate her claims against Optum.48 As alluded to

above, the ability of a non-signatory like Optum to enforce the arbitration agreement at issue here

is governed by Maryland state law.49 Under Maryland law, both of Optum’s arguments fail.

Optum has not shown that it is an intended third-party beneficiary of the Agreement between Ms.

46 Def.’s Suppl. Mem. in Supp. of Mot. to Compel Arb. (Doc. 17) at 3, 9.

47 Def.’s Mem. in Supp. of Mot. to Compel Arb. (Doc. 8) at 8–9; Def.’s Suppl. Mem. in Supp. of Mot. to Compel Arb.

(Doc. 17) at 9–11.

48 Def.’s Suppl. Mem. in Supp. of Mot. to Compel Arb. (Doc. 17) at 3–9. In its first Memorandum in Support of its

Motion to Compel Arbitration, Optum argued (among other things) that Ms. Hatch must arbitrate because of Optum

and Maxim’s close relationship and because she has treated the two companies as a “single unit.” Def.’s Mem. in

Supp. of Mot. to Compel Arb. (Doc. 8) at 9–12. These arguments were tailored to Arkansas law—because at that

point the parties had not yet realized that Maryland law applied. The arguments are not independently raised in the

supplemental briefs addressing Maryland law. In any event, they are sufficiently close to Optum’s equitable-estoppel

arguments under Maryland law that the Court will address them under the equitable-estoppel rubric.

49 “Chapter 1 of the Federal Arbitration Act (FAA) permits courts to apply state-law doctrines related to the

enforcement of arbitration agreements. . . . The ‘traditional principles of state law’ that apply under Chapter 1 include

doctrines that authorize the enforcement of a contract by a nonsignatory.” GE Energy Power Conversion France SAS,

Corp. v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637, 1643 (2020); see also PRM Energy Sys., Inc. v. Primenergy,

L.L.C., 592 F.3d 830, 833 (8th Cir. 2010) (“[S]tate contract law governs the ability of nonsignatories to enforce

arbitration provisions.”) (citations and quotation marks omitted).

Hatch and Maxim. Nor has Optum shown what it must for equitable estoppel—namely, that Ms.

Hatch is alleging “substantial[] interdependent and concerted misconduct” by Optum and

Maxim.50

A. Intended Third-Party Beneficiary

To determine whether a party is a third-party beneficiary to a contract under Maryland law,

“the controlling issue is whether the contract’s terms, in light of the surrounding circumstances,

reveal an intent to make the promise to the third party in fact if not in form.”51 The crucial factor

is thus “whether the pertinent provisions in the contract were inserted to benefit the third party.”52

Optum argues that the signatories to the Agreement intended to benefit Optum by including

the “broad language, covering ‘any and all’ disputes that might arise from Plaintiff’s

employment.”53 But this argument ignores important neighboring language in the Agreement—

language that comes immediately after (but in the same sentence as) the “any and all” language

quoted by Optum. The fuller quote from the Agreement reads, “[A]ny and all Claims between

50 Griggs v. Evans, 205 Md. App. 64, 83, 43 A.3d 1081, 1092 (Md. Ct. Spec. App. 2012). Griggs is from Maryland’s

intermediate court of appeals. This Court is cognizant that “the State’s highest court is the best authority on its own

law.” C.I.R. v. Bosch’s Est., 387 U.S. 456, 465 (1967). The parties have not provided, and the Court has not found,

a case from Maryland’s highest court (the Maryland Court of Appeals) discussing the application of equitable estoppel

in the relevant arbitration-enforcement context. See, e.g., Schuele v. Case Handyman & Remodeling Servs., LLC, 412

Md. 555, 560, 989 A.2d 210, 213 (2010) (“In this case, we are asked to decide whether under Maryland law a non-

signatory to a contract may invoke equitable estoppel to enforce an arbitration provision contained within the contract.

We are precluded from answering that question . . . .”). In the absence of a Maryland Court of Appeals decision, the

Court looks to Maryland’s “intermediate appellate state court [as] a datum for ascertaining [Maryland] state law . . .

.” C.I.R., 387 U.S. at 465 (ellipses and quotation marks omitted). This Court will follow the lead of the Fourth Circuit

and District Court for the District of Maryland, and thus will apply the rules laid down in Griggs. See Lomax v.

Weinstock, Friedman & Friedman, P.A., 583 F. App’x 100, 101 (4th Cir. 2014); Felix v. Richard D. London & Assocs.,

P.C., No. GLR-19-2795, 2020 WL 4933632, at *2 n.4 (D. Md. Aug. 24, 2020); Dennie v. MedImmune, Inc., No. PX

16-3643, 2017 WL 2930462, at *4 (D. Md. July 10, 2017).

51 Thompson v. Witherspoon, 197 Md. App. 69, 88, 12 A.3d 685, 696 (Md. Ct. Spec. App. 2011) (citation and internal

quotation marks omitted); see also 120 W. Fayette St., LLLP v. Mayor of Balt., 426 Md. 14, 36, 43 A.3d 355, 368

(2012) (“An individual is a third-party beneficiary to a contract if the contract was intended for his or her benefit and

it clearly appears that the parties intended to recognize him or her as the primary party in interest and as privy to the

promise.”) (cleaned up).

52 CR-RSC Tower I, LLC v. RSC Tower I, LLC, 429 Md. 387, 457, 56 A.3d 170, 212 (2012) (cleaned up).

53 Def.’s Suppl. Mem. in Supp. of Mot. to Compel Arb. (Doc. 17) at 10.

[Ms. Hatch] and MAXIM . . . .”54 Unless the contractual term “Maxim” is read to include

“Optum,” it is impossible to conclude (from the Agreement itself) that Optum was an intended

beneficiary. And there is no way to read “Maxim” so broadly. That is especially true because the

Agreement sets out a specific definition for the term Maxim: “[Maxim Healthcare Services, Inc.]

or any affiliated company and/or any of its parents, subsidiaries, affiliates, agents, officers,

directors, successors, agents, assigns, employees . . . .”55

Optum is Maxim’s client and admits that the Agreement’s language “does not expressly

apply to MAXIM’s customers/clients . . . .”56 Optum’s best argument on this point—and best does

not mean good—is that the term “affiliates” and the phrase “any affiliated company” were intended

to include Maxim’s clients. But Optum has provided no evidence to support that position, and no

known definition of “affiliates” or “affiliated company” extends so far.57 Optum’s position runs

54 Ex. A to Def.’s Mem. in Supp. of Mot. to Compel Arb. (Doc. 8-1) at 2.

55 Id.

56 Def.’s Suppl. Mem. in Supp. of Mot. to Compel Arb. (Doc. 17) at 10; see also Def.’s Mem. in Supp. of Mot. to

Compel Arb. (Doc. 8) at 4. At oral argument, Optum’s counsel all but conceded that this is a serious problem for his

client’s position. See June 2, 2022 Hr’g Tr. (Rough) at 5 (“To be frank, would we prefer it said clients in the arbitration

agreement, of course . . . .”); see also CR-RSC Tower I, LLC, 429 Md. at 457, 56 A.3d at 212 (holding that another

“‘factor to consider’ . . . is whether the third party is named in the contract . . .”) (citation omitted).

57 See Def.’s Suppl. Mem. in Supp. of Mot. to Compel Arb. (Doc. 17) at 9–11. The Court’s exchange with counsel

for Optum at oral argument is illustrative of the point:

THE COURT: But [Optum is] not alleging an affiliate status, at least under any definition that I

have seen. I guess what I’m trying to figure out is what is the definition -- what is your definition

of affiliate that you think applies here?

MR. MAGNUS: I don’t have -- I am using a common sort of lay understanding of affiliate.

THE COURT: Let me stop you there. When you say you are using the common lay understanding

of affiliate, if you pointed me to a dictionary, if you pointed me to -- I mean let’s even say if you

used corpus linguistics to show me that is what it means, if you pointed me to a news article, those

are things maybe you could then say you are using a common definition. I guess what I’m trying to

ask you is where have you come up with this common definition other than your head in a fancy

legal argument.

MR. MAGNUS: Obviously, if I had done that it would have been in the brief. So I did not research

that.

June 2, 2022 Hr’g Tr. (Rough) at 5.

counter to the textbook definition and judicial use of the word “affiliate.”58 Black’s Law

Dictionary defines “affiliate” as “[a] corporation that is related to another corporation by

shareholdings or other means of control; a subsidiary, parent, or sibling corporation.”59 And as

best the Court can tell, Maryland courts use the term “affiliate” nearly exclusively in the way

Black’s Law Dictionary defines it.60 In short, it is clear to the Court that the definition of Maxim

in the Agreement does not include Optum.

Optum’s “intended beneficiary” theory is not limited to the actual words of the Agreement.

Optum also argues that it must have been an intended beneficiary of the Agreement because the

parties knew, when they entered the Agreement, that Ms. Hatch was going to work at Optum. This

logic is flawed. Even if we assume that both parties contemplated that Ms. Hatch would be

working exclusively with Optum, that doesn’t mean that the Agreement was meant to cover (and

thereby benefit) Optum. The more natural reading of the Agreement is that Maxim wanted to

ensure it (and it alone) would not be haled into court for anything that happened to Ms. Hatch

while she was an employee of Maxim—regardless of whether Maxim or one of its clients was the

alleged wrongdoer. There’s no reason to think Maxim particularly cared whether its client was

haled into court. And there’s certainly no reason to think Ms. Hatch wanted the Agreement to

extend to claims against Optum.

It is of course true that the Maxim-Hatch relationship (which included the Agreement)

operated to benefit Optum. After all, Maxim placed Ms. Hatch to work for Optum. But that’s not

58 See Rourke v. Amchem Prods., Inc., 153 Md. App. 91, 125–26, 835 A.2d 193, 212–13 (Md. Ct. Spec. App. 2003)

(using Black’s Law Dictionary and “[j]udicial use” to discern the meaning of a word in a contract), aff’d 384 Md. 329,

863 A.2d 926 (2004).

59 Affiliate, Black’s Law Dictionary (11th ed. 2019).

60 See, e.g., Gore Enter. Holdings, Inc. v. Comptroller of Treasury, 437 Md. 492, 500, 515, 87 A.3d 1263, 1267, 1275

(2014) (referring to two “wholly-owned subsidiary” companies as “affiliates” of their parent company).

conclusive of anything. “It is not enough that [a] contract merely operates to an individual’s

benefit . . . .”61 Ms. Hatch and Maxim must have entered into the Agreement with the intention of

the Agreement benefiting Optum. The Agreement’s language and the circumstances surrounding

it do not establish the necessary intent.62 So Optum’s third-party beneficiary theory fails.

B. Equitable Estoppel

Under Maryland law, “[t]he doctrine of equitable estoppel permits non-signatories to

enforce an arbitration provision” in two instances.63 The first is “when a signatory must rely on

the terms of the written agreement containing the arbitration clause in asserting its claims . . . .”64

Nearly always, this estoppel theory comes into play when the arbitration clause is part of a broader

61 CR-RSC Tower I, LLC, 429 Md. at 457, 56 A.3d at 212 (quoting 120 W. Fayette St., 426 Md. at 35–36, 43 A.3d at

368).

62 Globally, Optum emphasizes what it considers to be an indirect admission from Ms. Hatch that the Maxim-Hatch

Arbitration Agreement covers employment-related claims against Optum. Def.’s Suppl. Mem. in Supp. of Mot. to

Compel Arb. (Doc. 17) at 6. This so-called admission allegedly took place in a previous lawsuit—a wage-and-hour

complaint against Optum. Id. Ms. Hatch was initially a named plaintiff in that case. See Traylor v. Optum Gov. Sols.,

Inc., et al., No. 4:21-CV-274-LPR (E.D. Ark.), Compl. (Doc. 1). The Amended Complaint in that case removed her

from the action, explaining that “[t]he purpose of [the] amendment [was] to remove Taquilla Hatch as a Plaintiff, as

she entered a binding arbitration agreement with a third-party staffing company and was assigned to work by that

staffing company to Optum Government Solutions, Inc. . . . .” Traylor, Am. Compl. (Doc. 17) ¶ 3; Ex. B to Def.’s

Mem. in Supp. of Mot. to Compel Arb. (Doc. 8-2) at 3. Optum seizes on this language for its present arguments that

arbitration is in order in the instant case. However, while the statement in the previous lawsuit gives Optum a good

rhetorical point, that is all it does. The Amended Complaint in the prior case came before an Answer, so leave of the

Court was not required for any amendment. Thus, judicial estoppel is not applicable here. In short, the reasons Ms.

Hatch was dropped from the prior lawsuit are legally irrelevant to the instant lawsuit. Optum conceded as much in

the hearing on the Motion to Compel Arbitration. The exchange between Optum’s counsel and the Court went as

follows:

THE COURT: That strikes me as a tonal and atmospheric argument, as opposed to an argument

having kind of legal implications. Am I right about that or wrong about that?

MR. MAGNUS: You are most definitely right about that.

THE COURT: That doesn’t mean it’s unimportant. I’ll take it for what it’s worth, but that is not

sort of a smoking gun . . . .

MR. MAGNUS: Oh, no. The truth of the matter is it created an expectation from my client that this

was going to be arbitrated because she had done it once before, which put me in the position of

having to move. And that is as atmospheric as it gets.

June 2, 2022 Hr’g Tr. (Rough) at 18.

63 Griggs, 205 Md. App. at 82–83, 43 A.3d at 1092 (footnote omitted).

64 Id. (cleaned up).

employment contract that the employee is suing under. That’s not the case here. The Agreement

is a standalone agreement. It is not part of some broader written employment contract. It should

be no surprise, then, that Ms. Hatch’s claims do not invoke the terms of the Agreement. She does

not rely on the Agreement in making her Title VII and state common law breach-of-contract

claims. So Optum can’t rely on this theory of equitable estoppel to compel arbitration. Optum

concedes this point.65

The second theory of estoppel is closer to the mark. It applies “when the signatory to the

contract containing an arbitration clause raises allegations of substantially interdependent and

concerted misconduct by both the non-signatory and one or more of the signatories to the contract

. . . .”66 Optum argues that this estoppel theory fits the bill because (1) Ms. Hatch’s claims “directly

relate to her employment with [Maxim],” and (2) Ms. Hatch has based her claims “on facts that

allege interdependent, concerted misconduct by Optum and [Maxim].”67

Optum relies heavily on MS Dealer Service Corp. v. Franklin.68 Optum correctly notes

that this is “the case that informed Maryland’s adoption of equitable estoppel in the arbitration

context . . . .”69 In MS Dealer, the plaintiff was forced to arbitrate her claims against a non-

signatory defendant because her claims were “inherently inseparable” from those that she brought

against a signatory defendant.70 Of course, there is an obvious difference between MS Dealer and

our case. Ms. Hatch is not suing Maxim (the signatory to the Agreement). That difference may

65 Def.’s Suppl. Mem. in Supp. of Mot. to Compel Arb. (Doc. 17) at 2.

66 Griggs, 205 Md. App. at 83, 43 A.3d at 1092 (cleaned up).

67 Def.’s Suppl. Mem. in Supp. of Mot. to Compel Arb. (Doc. 17) at 4.

68 177 F.3d 942 (11th Cir. 1999), abrogated on other grounds by Arthur Andersen LLP, 556 U.S. at 631.

69 Def.’s Suppl. Mem. in Supp. of Mot. to Compel Arb. (Doc. 17) at 4; see also Griggs, 205 Md. App. at 85, 43 A.3d

at 1093 (referring to MS Dealer as “[i]llustrative of [the second] application of equitable estoppel”).

70 MS Dealer, 177 F.3d at 948. The plaintiff in the case asserted that the signatory and non-signatory defendants

“improperly cooperated, conspired and otherwise colluded . . . in a scheme to defraud her . . . .” Id. at 945.

not be automatically fatal to Optum’s position under Maryland law.71 But, at the very least, it calls

for caution in employing equitable estoppel. The cases that the Court has reviewed from Maryland,

the Fourth Circuit, and the federal district court in Maryland suggest that allegations of concerted

wrongdoing on the part of the signatory and non-signatory must be made to trigger this type of

equitable estoppel.72

Ms. Hatch is not alleging that Maxim engaged in any wrongdoing. For example, Ms.

Hatch is not alleging that Maxim discriminated against her or breached a contract. Ms. Hatch is

not alleging that Maxim helped Optum discriminate against her or breach a contract. Ms. Hatch

is not alleging that Maxim knew of Optum’s alleged discrimination or contractual breach, let alone

that Maxim knew about those things and failed to take corrective action. In short, there’s no

71 See generally Int’l Paper Co. v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411, 416–17 (4th Cir.

2000) (“Well-established common law principles dictate that in an appropriate case a nonsignatory can enforce, or

be bound by, an arbitration provision . . . .”) (emphasis added).

72 Optum appears to concede this—at least to some extent—when it “acknowledges that . . . the Fourth Circuit has

produced divergent holdings in applying the equitable estoppel grounds . . . .” Def.’s Suppl. Mem. in Supp. of Mot. to

Compel Arb. (Doc. 17) at 9. Optum cites Brantley v. Republic Mortgage Insurance Co., 424 F.3d 392, 396 (4th Cir.

2005) as an example, noting that, in that case, the “defendant could not invoke [the] arbitration agreement because . .

. [plaintiff’s] claims were not part of [the] underlying contract, and [plaintiff made] allegations only as to one

defendant.” Def.’s Suppl. Mem. in Supp. of Mot. to Compel Arb. (Doc. 17) at 9. Brantley is the tip of the iceberg.

“[A]t a minimum, there must be allegations of ‘coordinated behavior between a signatory and a nonsignatory’

defendant . . . .” Aggarao v. MOL Ship Mgt. Co., Ltd., 675 F.3d 355, 374 (4th Cir. 2012) (citation omitted) (holding

that plaintiff was equitably estopped from avoiding arbitration with both signatory and non-signatory defendants

where “[t]he conduct of [all three defendants, signatory and non-signatory,] was coordinated by virtue of each

defendant’s alleged involvement . . . .”); see also Long v. Silver, 248 F.3d 309, 317–20 (4th Cir. 2001) (compelling

arbitration of claims against signatory corporation and non-signatory shareholders because the claims against both

were “closely intertwined” and arose out of the agreement); J.J. Ryan & Sons, Inc. v. Rhone Poulenc Textile, S.A., 863

F.2d 315, 320 (4th Cir. 1988) (compelling arbitration of claims against signatory subsidiary company and non-

signatory parent company because the claims were “based on the same facts and [were] inherently inseparable”);

Griggs, 205 Md. App. at 90, 43 A.3d at 1096 (holding that equitable estoppel was not applicable where “the

[plaintiffs’] complaint [did] not allege any wrongdoing by . . . the signatory . . .”); Horneffer v. St. Joseph Med. Ctr.,

No. MJG-11-410, 2012 WL 983782, at *5–6 (D. Md. Mar. 21, 2012) (compelling arbitration of claims against non-

signatories where plaintiff alleged that the non-signatories and signatories “act[ed] in concert to interfere with his

rights” under the signed agreement); Dennie, 2017 WL 2930462, at *4 (holding that plaintiff was equitably estopped

from avoiding arbitration of claims against non-signatory where plaintiff’s “complaint [pleaded] concerted conduct

between the” signatory and non-signatory); Mangani-Kashkett v. Bouquet, No. PWG-13-1215, 2013 WL 3146939, at

*5–6 (D. Md. June 18, 2013) (requiring plaintiff to arbitrate her claim against non-signatory because she “allege[d]

that [the] non-signatory, and its employee, . . . a signatory, breached the [agreement] . . .”).

allegation of concerted action that comes anywhere close to the type of concerted action that has

qualified for equitable estoppel in Maryland.

Optum’s “concerted action” hypothesis is entirely dependent on the idea that a joint-

employer relationship on its own is enough to trigger this type of equitable estoppel. That’s a

highly dubious proposition, and Optum provides no Maryland caselaw for it. In any event, for its

joint-employer theory, Optum points to Ms. Hatch’s allegations that Maxim issued her paycheck,73

assisted her in taking a tuberculosis test once per year,74 assigned her to work for Optum,75 and

was notified by Optum of concerns regarding Ms. Hatch’s performance.76 Optum also points out

that Ms. Hatch admits that she was “hired by” and “worked for” Maxim.77 Optum argues that Ms.

Hatch is obviously alleging the existence of a joint-employer relationship. But even if she is, the

“jointness” is far removed from the allegations of discrimination or contractual breach. Indeed,

the discrimination and contractual breach alleged here is solely about Optum’s decision not to hire

her as a full-time employee. There is no allegation that Maxim was involved in any way in that

decision.78 And that is the missing ingredient.

II. Scope of the Arbitration Agreement

Optum faces an additional problem in this case. To explain it, let us assume

(counterfactually) that either the intended-beneficiary theory or the equitable-estoppel theory

applied to this case. All that means is that Optum could enforce the Agreement despite being a

73 Compl. (Doc. 1) ¶ 15.

74 Id.

75 Id. ¶ 9.

76 Id. ¶ 13.

77 Id. ¶¶ 9–10.

78 See Griggs, 205 Md. App. at 90, 43 A.3d at 1096 (concluding that compelling arbitration was inappropriate where

the plaintiffs’ allegations did “not allege any wrongdoing by . . . the signatory to the arbitration” agreement).

non-signatory.79 In many situations, that’s the whole ball game—because whatever arbitration

agreement is at issue is written very broadly to cover “all employment-related claims” with no

qualifications. So the employee’s claim against a non-signatory tends to fall within the scope of

the broadly worded agreement. However, the arbitration agreement in the instant case is different.

As explained above in the Background Section, the Agreement specifically and repeatedly limits

the scope of arbitrable claims to those “between” Maxim and Ms. Hatch.

Optum seeks not only to enforce the Agreement as a non-signatory, but to broaden the

internal limitations of the Agreement’s scope. It’s not clear that any judge-made doctrine does or

should allow that type of violence to the plain language of a private contract. It is true, as Optum

says, that “the FAA was designed to promote arbitration.”80 But that doesn’t mean courts are

supposed to tilt the scales in favor of arbitration. It means courts should read arbitration contracts

like other contracts, without the judicial hostility toward arbitration that marked a bygone

jurisprudential era. The Supreme Court has made a similar point, clarifying that the FAA’s policy

favoring arbitration “is to make arbitration agreements as enforceable as other contracts, but not

more so.”81 And the Eighth Circuit has made clear that “a party cannot be compelled to arbitrate

unless it has contractually agreed to be bound by arbitration.”82 Here, Ms. Hatch agreed to arbitrate

claims “between” her and Maxim. She did not agree to anything more.

79 See Hagerstown Block Co. v. Durbin, No. 0737, 2015 WL 5926086, at *5, *11 (Md. Ct. Spec. App. July 15, 2015)

(affirming trial court’s order compelling arbitration where non-signatories invoked doctrine of equitable estoppel and

the claims “fell within the scope of the broadly-worded arbitration clause . . .”); cf. Am. Bankers Ins. Grp., Inc. v.

Long, 453 F.3d 623, 630 (4th Cir. 2006) (“[E]stoppel does not preclude a party from making the quite different

argument that its claims do not fall within the scope of the arbitration clause.”).

80 AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 345 (2011).

81 Morgan v. Sundance, Inc., 142 S. Ct. 1708, 1713 (2022) (internal quotation marks omitted); see also Volt Info. Scis.,

Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 478 (1989) (“[The FAA] simply requires courts to

enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms.”).

82 Duncan v. Int’l Mkts. Live, Inc., 20 F.4th 400, 402 (8th Cir. 2021).

CONCLUSION

Optum’s Motion to Compel Arbitration and to Dismiss or Stay this Case is DENIED.

IT IS SO ORDERED this 11th day of October 2022.

LEE P. RUDOFSKY

UNITED STATES DISTRICT JUDGE

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