South Carolina Federal Court Grants Motion to Compel Arbitration of Claims Brought Under Unsigned Employment Agreement Per “Direct Benefits Estoppel”

In Singh v. Anesthesia Associates of Rock Hill, P.A., the U.S. District Court for the District of South Carolina addressed a motion by defendant Anesthesia Associates of Rock Hill, P.A. to compel arbitration of claims brought by plaintiff Dr. Saket Singh for breach of shareholder and employment agreements, retaliation, discrimination, defamation, and minority shareholder oppression.

Singh, a practicing anesthesiologist, became a shareholder of Anesthesia Associates in April 2021. In March 2024, Singh raised concerns about the clinical abilities of another shareholder physician to the Anesthesia Associates board and, shortly after that, raised concern that approximately $2 million was missing from the company’s books. Singh’s employment was terminated in August 2024, “with cause” but without a specific reason. After his request to inspect the corporate books and records of the practice was denied, Singh filed a state court complaint for an expedited court-ordered inspection of records under the South Carolina Business Corporation Act. Anesthesia Associates filed a motion to compel arbitration in response to Singh’s action. The court granted Singh’s application and denied Anesthesia Associates’ motion to compel, finding that Anesthesia Associates “had failed to produce a copy of a signed arbitration agreement covering Singh’s claim.”

Singh then amended his compliant to add additional claims, including federal race discrimination and retaliation claims under 42 U.S.C § 1981, as well as claims under state law for a judicial appraisal of shares, breach of agreement, minority shareholder oppression and defamation. Anesthesia Associates removed the case to federal court, and Singh filed a motion for remand. Anesthesia Associates filed a motion to compel arbitration relying on a physician shareholder employment agreement (PSEA), which included a mandatory arbitration provision covering, with one exception, “any dispute or controversy arising under, out of, or in connection with, or in relation to this Agreement.” Anesthesia Associates was unable to produce a signed copy of the PSEA in support of its motion.

The magistrate judge issued a report and recommendation granting the motion to compel arbitration and denying the motion to remand, which was adopted by the district court as modified. The district court rejected Singh’s argument that the law-of-the-case doctrine bars consideration of the motion to compel since the state court had previously denied that same motion, finding that a court may revisit an issue in the case under certain circumstances, present here. The court noted that Singh’s amended complaint included a breach of contract claim that Anesthesia Associates breached the PSEA and found that Singh had “injected a new issue into the case  — whether he should be allowed to claim the benefits of the PSEA while simultaneously trying to avoid the arbitration provision.” The court found that because this particular issue was not before the state court, the law-of-the-case doctrine did not preclude the court from reviewing the current motion to compel arbitration. The court then found that Singh is bound by the arbitration provision under the theory of “direct benefits estoppel,” noting that because Singh’s lawsuit included claims for breach of the PSEA, “he is bound by the entire Agreement, including the arbitration provision.” The court also found that the PSEA’s arbitration provision delegated questions of arbitrability to the arbitrator, including “challenges to the scope and enforceability of an arbitration agreement.” Finally, the court denied Singh’s motion to remand as moot and granted Anesthesia Associates’ motion to stay the case pending arbitration.

Singh v. Anesthesia Associates of Rock Hill, P.A., No. 0:25-cv-00696 (D.S.C. May 15, 2025).