Sloat v. Active Day
Active Day is a Medicaid provider that operates the country’s largest network of daytime care services for adults with developmental disabilities. The company provides these services in accordance with the Intellectual Disability/Related Disabilities Medicaid Waiver (ID/RD)—a program that permits states to offer an array of home and community-based services that an individual with intellectual disabilities may need to avoid institutionalization. This service is not only critically important for those with intellectual disabilities, many of whom also have severe physical disabilities, but it is also important for their caregivers and guardians who need this daytime care service in order to work a job, run errands, take care of other household members, or focus on their own health.
In March 2023, Active Day told recipients of its adult daytime care service that if they wanted to continue to receive this critical government benefit, they had to sign an arbitration agreement—and it was no ordinary arbitration agreement. Active Day’s mandatory binding arbitration agreement strips its vulnerable clients and their families of any meaningful recourse to hold the company accountable for future misconduct. For example, the agreement not only bars clients from bringing actions against Active Day in court, it requires that all disputes be arbitrated in Pennsylvania, even though these clients live in South Carolina (many of Active Day’s clients live in other states) and have severe physical disabilities that make such travel very difficult and expensive for the clients and their families.
Public Justice, Disability Rights South Carolina, and Sowell Durant represent two adults, PJ Sloat and SS, who relied on Active Day’s daytime care service and were then faced with Active Day’s ultimatum: sign away your rights or lose services. PJ is a twenty-year-old woman with an intellectual disability and Cerebral Palsy. She is also quadriplegic, legally blind, and has significant hearing loss. She requires around-the-clock support and cannot be left alone. Her mother provides most of her care, and works an outside job while PJ attends Active Day. When faced with the ultimatum, PJ’s mother signed the arbitration agreement so that PJ could continue to receive services; she felt she had no choice as there were no alternative daytime services that could provide the level of nursing care PJ required.
SS is a twenty-six-year-old man with autism who had been receiving Active Day’s daytime services for around two years. For SS, these services were essential to receiving appropriate supervision, support, and socialization with peers at his level of intellectual disability, which he cannot readily receive elsewhere. But when faced with the ultimatum, SS’s guardian, his mother, refused to sign the agreement. As a result, SS lost Active Day’s service and denied the critical government benefit he qualified for.
SS and PJ filed suit in the U.S. District Court of South Carolina, challenging Active Day’s unlawful ultimatum. They allege that the arbitration agreement is unconscionable and unenforceable under South Carolina law, that it curtails their First Amendment rights, and that requiring Active Day clients to sign the agreement in order to keep receiving services violates the unconstitutional conditions doctrine by conditioning the receipt of a public benefit on the forfeiture of fundamental rights.
