Arbitration agreements are common throughout Pennsylvania. They appear in employment contracts, nursing home admission agreements, consumer transactions, construction contracts, financial documents, business agreements, and digital terms of service.
An arbitration clause can fundamentally change a legal dispute. Instead of having a case decided by a judge or jury in a public courtroom, the parties agree to present their claims to a private arbitrator. Thus, a party may want to file suit in court instead and wait for the other side to compel arbitration, typically through Preliminary Objections. See Pa.R.C.P. 1028(a)(6).
However, an important rule is sometimes overlooked: simply having a valid arbitration agreement does not give a party an absolute right to invoke arbitration whenever it chooses.
Pennsylvania law recognizes arbitration agreements and generally favors alternative dispute resolution. Even so, Pennsylvania courts carefully examine three important questions before enforcing an arbitration clause:
- Whether the parties actually formed a valid agreement to arbitrate.
- Whether the specific dispute falls within the scope of that agreement.
- Whether the party seeking arbitration has waived its right to enforce the clause.
That said, a recent decision from the Pennsylvania Superior Court illustrates the last point, waiver, and just how easily the right to arbitrate can be lost.
This is important, because courts generally prefer to enforce an arbitration agreement. This is true for two reasons. First, courts like to effectuate the parties’ agreement. And secondly, granting a motion to compel arbitration takes a case off the court’s docket, i.e., there’s one less case on the court to address (on the judge’s fixed salary that does not pay overtime). Judges do get many perks, but not overtime. In fact, Pennsylvania has a strong public policy favoring arbitration.
So when a court finds “waiver,” it usually means party seeking arbitration did something majorly wrong along the way.
The Recent Case: Estate of Smalling v. 2990 Holme Operating
In Estate of Glendon Smalling v. 2990 Holme Operating, LLC, 2026 PA Super 138 (a precedential opinion), the defendants operated a healthcare facility where the decedent had received care. Following her death, the decedent’s estate filed a wrongful death and survival action alleging negligent treatment.
At first glance, the defendants had a potentially strong contractual argument. The facility’s admission agreement contained a voluntary arbitration provision covering personal injury and medical malpractice claims.
However, a major procedural problem soon arose.
The lawsuit was filed in January 2024. Over the next year, the defendants actively participated in the court proceedings. They filed preliminary objections to the original complaint. They then filed additional preliminary objections after an amended complaint. Eventually, they filed an answer with new matter.
They also participated in discovery. They served written interrogatories and document requests.
But none of those filings or actions mentioned arbitration.
It was not until March 2025—approximately fourteen months after the lawsuit began—that the defendants filed a petition to compel arbitration.
The trial court concluded that the defendants had waived their right to enforce the arbitration clause. They had waited too long and, instead, had chosen to participate in the judicial process. The Pennsylvania Superior Court affirmed.
Significantly, the appellate court did not need to decide whether the underlying arbitration agreement was valid and enforceable. Instead, it assumed that it was and ruled entirely on the basis that the defendants’ extensive delay constituted a waiver.
That distinction is important. A party can have a valid and binding arbitration agreement and still lose the right to enforce it.
How to Ask a Pennsylvania Court to Compel Arbitration
When a plaintiff files a lawsuit despite a binding arbitration clause, the defendant must bring the issue before the court promptly.
Pennsylvania civil procedure provides several mechanisms for doing so, depending on the governing statute.
Under the Pennsylvania Uniform Arbitration Act, 42 Pa.C.S. § 7304, a party may apply directly to the court for an order compelling arbitration. The party must establish the existence of an agreement to arbitrate and the opposing party’s refusal to arbitrate. If the existence of the agreement is disputed, the court must summarily determine that issue.
Pennsylvania Rule of Civil Procedure 1028(a)(6) also permits a defendant to raise a preliminary objection based on an “agreement for alternative dispute resolution.” The Rule specifically recognizes that an arbitration agreement may be asserted through preliminary objections or through a petition to compel.
Meanwhile, the Revised Uniform Arbitration Act, 42 Pa.C.S. §§ 7321.1–7321.31, expressly provides for a motion to compel arbitration. Under that statute, the court must determine whether an enforceable arbitration agreement exists and whether the dispute falls within it.
Thus, the terminology can vary. Depending upon the circumstances, a party may file a petition, preliminary objections, or a motion to compel.
The objective, however, is the same: ask the court to stop the judicial proceedings and require the parties to arbitrate instead.
And, as Smalling demonstrates, that request should generally be made at the outset—not after substantial litigation has already occurred.
What Does the Court Actually Decide?
When a court receives a request to compel arbitration, it must first answer several threshold questions.
1. Is There a Valid Agreement to Arbitrate?
First, the party seeking arbitration must establish that an enforceable agreement exists.
That inquiry can become complicated. For example, the court may consider:
- Did the parties actually sign the agreement?
- Did the person who signed it have authority to bind the party?
- Was the arbitration provision properly incorporated into the contract?
- Was the provision clearly presented?
- Did the parties genuinely assent to the terms?
- Is the provision unconscionable?
- Is the arbitration clause contained in a contract of adhesion?
- In an online transaction, did the consumer receive reasonable and conspicuous notice of the terms?
These questions matter because arbitration is based on contract.
Pennsylvania law generally treats arbitration agreements like other contracts. Therefore, traditional contract defenses can apply. Those defenses can include fraud, duress, coercion, and unconscionability.
Contracts of adhesion—essentially, non-negotiable “take-it-or-leave-it” agreements—are not automatically invalid. Nevertheless, the circumstances surrounding such agreements can be important when a court considers whether there was meaningful assent and whether the arbitration provision is enforceable.
In other words, the mere appearance of an arbitration clause in a contract does not end the inquiry.
2. Does the Dispute Fall Within the Arbitration Clause?
Next, even if a valid agreement exists, the court must determine whether the particular dispute is covered by the agreement.
Some arbitration clauses are extremely broad. They may cover any dispute “arising out of or relating to” the contract.
Other clauses are narrower. They may apply only to particular types of claims or disputes.
Consequently, the language of the arbitration agreement matters. The court must compare that language with the claims actually asserted in the lawsuit.
But there is another question that can arise even before the court reaches those issues:
Has the party seeking arbitration waived the right to enforce the clause?
The Pivotal Hurdle: Waiver of the Right to Arbitrate
Even when a valid arbitration agreement exists and covers the dispute, a court may deny arbitration if the party seeking it has waived the right.
That is the central lesson of Smalling.
Several factors can be important, including:
- Failure to raise the arbitration issue promptly.
- Active participation in discovery.
- Filing pleadings or pretrial motions without mentioning arbitration.
- Waiting for an unfavorable or adverse ruling before seeking arbitration.
- Waiting until the case is approaching trial before seeking to compel arbitration.
The underlying principle is straightforward.
A party cannot use the court system to obtain discovery, learn an opponent’s strategy, pursue favorable rulings, and otherwise litigate the case—and then demand a different forum once the litigation becomes less advantageous.
In that situation, the party may have waived its contractual right to arbitration.
There Is No “Magic Deadline”
Importantly, Smalling does not establish a specific deadline for seeking arbitration.
There is no simple Pennsylvania rule saying that arbitration is waived after 30, 60, or 90 days.
Instead, waiver depends on the circumstances of each case.
For example, a short delay will not usually result in waiver because, as mentioned, the court’s like agreements to arbitrate. Likewise, merely filing an initial pleading does not automatically waive arbitration.
The risk increases, however, as a party becomes more deeply involved in the judicial process.
That is why Smalling is particularly important. The defendants did not simply wait a few weeks before asserting arbitration. They spent approximately fourteen months participating in the litigation. They filed multiple pleadings and engaged in discovery.
By the time they sought arbitration, the litigation was well underway.
The Superior Court concluded that their conduct was enough to constitute waiver.
Why Does Pennsylvania Protect the Right to a Courtroom Trial?
The scrutiny applied to arbitration also has a constitutional foundation.
Article I, Section 6 of the Pennsylvania Constitution provides that:
“Trial by jury shall be as heretofore, and the right thereof remain inviolate.”
Binding arbitration is different from a traditional civil trial. When a person agrees to binding arbitration, that person generally gives up the right to have the dispute decided by a jury.
That does not mean Pennsylvania disfavors arbitration. As noted above, Pennsylvania strongly favors arbitration as an alternative method of resolving disputes.
Nevertheless, the right being surrendered is significant.
For that reason, Pennsylvania courts have developed a substantial body of law examining whether a person actually agreed to arbitration and whether that agreement should be enforced.
In short, courts do not lightly assume that someone knowingly surrendered the constitutional right to a jury trial.
Heightened Scrutiny for Online “Clickwrap” Agreements
This constitutional protection is particularly important in consumer transactions.
We’ve written about this, before.
The recent decision in Duffy v. Tatum, 2026 PA Super 41, provides a great example. There, a moving company attempted to enforce an arbitration provision contained within its online terms of service. The customer had used the company’s website. However, the arbitration provision was buried within the website’s terms, and the circumstances did not establish an unambiguous manifestation of assent to arbitration.
The Superior Court therefore refused to enforce the provision.
Duffy reinforces an important point: simply placing the words “arbitration clause” somewhere in a website or contract is not necessarily enough.
When arbitration is buried in hyperlinks, inconspicuous text, or otherwise presented in a way that makes it unlikely the consumer understood what was being surrendered, courts may refuse to find the required assent.
This is particularly significant because the consequence is not merely the loss of some contractual benefit. The consumer may be giving up the constitutional right to have a dispute decided by a jury.
Tactical Advantages: Immediate Rights of Appeal
There is another important feature of Pennsylvania arbitration law.
Ordinarily, an order entered in the middle of a lawsuit is considered “interlocutory.” Generally, it cannot be appealed until the case reaches a final judgment.
Arbitration is a significant exception.
Under Pennsylvania law, 42 Pa.C.S. § 7320(a)(1), an order denying an application to compel arbitration is immediately appealable as of right. Pennsylvania Rule of Appellate Procedure 311(a)(8) provides the corresponding procedural authority for such an interlocutory appeal.
The Superior Court emphasized this point in Smalling. It has also addressed the issue in Cook v. Philadelphia Federal Credit Union, another 2026 decision.
As a result, if a trial court denies a petition, motion, or preliminary objection seeking arbitration, the party seeking arbitration does not necessarily have to continue litigating the underlying case all the way to trial.
Instead, the party may immediately take the arbitration issue to the appellate court.
This serves an important practical purpose. Otherwise, a party could be forced to spend years and substantial sums litigating a case in court before finally obtaining appellate review of whether the case belonged in arbitration in the first place.
What Happens When Arbitration Is Ordered?
If the court determines that a valid arbitration agreement exists, that the dispute falls within its scope, and that the right to enforce the agreement has not been waived, the court can order the parties to arbitrate.
At that point, the judicial proceeding is generally stayed while the arbitration proceeds.
The court does not decide the underlying merits simply because it has ordered arbitration. Instead, the dispute moves out of the courtroom and into the private arbitration process established by the parties’ agreement and the applicable arbitration rules.
Thus, the court’s role at this stage is primarily to determine whether arbitration is required—not to decide who ultimately wins.
The Practical Lesson: Raise Arbitration Early or Lose It
For defense counsel and businesses, Estate of Smalling provides a clear warning:
Do not wait.
When a complaint is served, the defense should immediately identify any contracts that may govern the dispute. Counsel should then review the arbitration provision, determine whether it applies, consider potential enforceability issues, and decide how and when to raise the issue.
Most importantly, arbitration should not be treated as a backup strategy.
A party that files an answer, serves discovery, participates in case-management proceedings, litigates motions, and otherwise engages in the court process may later find itself unable to insist upon arbitration.
Of course, not every action taken in court results in waiver. Pennsylvania courts examine the circumstances of each case. Still, the longer a party litigates, the greater the risk that a court will conclude that the party chose the judicial forum.
That is the lesson of Smalling.
Arbitration remains an important and often effective alternative to a courtroom trial. However, it is not a right that can always be saved for later.
First, the party seeking arbitration must establish a valid agreement. Second, the dispute must fall within the agreement’s scope. Third, the party must not have waived the right to enforce it.
And when the right to arbitrate is challenged, the issue may be resolved immediately on appeal rather than after years of litigation.
Ultimately, an arbitration clause can be powerful. But it must be valid, it must cover the dispute, and it must be asserted before the right to enforce it is lost.
Let’s Get Started!
Contact our attorneys today!
412.342.0992
Disclaimer: This article is intended for general informational purposes and does not constitute legal advice. Procedural rules and applicable statutes vary depending on the type of arbitration agreement and the facts of each case.
