Document: 482 U.S. 483 107 S.Ct. 2520 96 L.Ed.2d 426 Barclay PERRY and James Johnston, Appellantsv.Kenneth Morgan THOMAS. No. 86-566. Argued April 28, 1987. Decided June 15, Syllabus Appellee brought suit in California Superior Court against his former employer appellants, two of its employees, alleging breach contract related causes action arising from a dispute over commissions on securities sales. After appellee refused to arbitrate, appellants filed petition compel arbitration under §§ 2 4 the Federal Arbitration Act, which respectively provide that contractual provisions are valid enforceable mandate their judicial enforcement. The demand for was based provision form executed connection with employment application, whereby he agreed arbitrate any employer. opposed ground authorized by Labor Code § 229, provides wage collection actions may be maintained without regard existence private agreement arbitrate. court arbitration, characterizing as "controlling authority" Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Ware, 414 117, 94 383, 38 348 upheld 229 face Supremacy Clause preemption challenge premised an requirement New York Stock Exchange rule, promulgated pursuant 6 Securities Act 1934 (1934 Act). State Appeals affirmed. Both lower courts consider appellee's argument lacked "standing" enforce since they were not parties it. Held: 1. Under Clause, pre-empts Code. In enacting 2, Congress declared national policy favoring withdrew States' power require forum resolution claims contracting resolve arbitration. Ware is distinguishable language policies regulations thereunder evidenced no clear federal intent oblique reference footnote 15 cannot fairly read definitive holding does pre-empt concerned federally created rights did address issue pre-emption state-created rights. Pp. 489-491. 2. Appellee's contention resolving appellants' favor question prerequisite Article III Constitution maintenance this appeal rejected. argument—which reach because it—simply presents straightforward interpretation whether inures benefit construed cover present dispute. That resolved remand, status alternative denying prevent reviewing courts' holdings question. P. 492. Reversed remanded. MARSHALL, J., delivered opinion Court, REHNQUIST, C.J., BRENNAN, WHITE, BLACKMUN, POWELL, SCALIA, JJ., joined. STEVENS, post, p. ----, O'CONNOR, dissenting opinions. Peter Brown Dolan, Los Angeles, Cal., appellants. Bruce Gelber, Beverly Hills, appellee. Justice MARSHALL Court. 1 we decide 9 U.S.C. et seq., mandates enforcement agreements, Code, wages "without arbitrate." Cal.Lab.Code Ann. (West 1971). * Appellee, Kenneth Thomas, employer, Kidder, Peabody Co. (Kidder, Peabody), Perry Johnston. His complaint arose sale securities. Thomas alleged contract, conversion, civil conspiracy commit fiduciary duty, sought compensatory punitive damages. submit defendants stay further proceedings Johnston arbitration; invoked diversity jurisdiction similar District petitions authority Act.1 3 demands found Uniform Application Industry Registration form, completed application Peabody. states: "I agree dispute, claim or controversy arise between me my firm, customer, other person, required arbitrated rules, constitutions by-laws organizations I register. . ." App. 33a. 5 Rule 347 Exchange, (1975), registered, "[a]ny registered representative member organization out termination such shall settled at instance party. 34a. 7 (NYSE). relied Thomas' allegation had acted course scope argued that, agents employees Peabody, beneficiaries agreement. 8 both him maintain wages, defined include commissions,2 despite He principally Court's decision (1973), also considered validity Const., Art. VI, cl. stood proposition State's interest protecting earners outweighs uniform resolution. denied arbitration.3 Kidder Co., Civ.Action C529105 (Los Angeles County, Apr. 23, 1985) (reprinted 128a-129a). characterized held "in accordance Section collect pursued agreements." Id., 129a. It concluded conspiracy, duty ancillary differed only terms remedies sought, should tried severed 128a-129a. "not parties" agreement, id., 78a, therefore basis asserting right characterizes one "standing."4 10 Before Appeal, narrow pre-empted 347's given promulgation NYSE Act), 48 Stat. 885, amended, 78f, Commission (SEC) review modify Rules 19 78s.5 See U.S., 135. indirect opinion, pre-emptive effect case. 11 unpublished Appeal Perry, 2d Civ. B014485 (2d Dist., Div. 5, 10, 1986) 139a-142a). single imply hold litigants' disputes 347. Thus, unpaid subject compulsory notwithstanding 140a-141a. Like rejected argument, Dean Witter Reynolds Byrd, 470 213, 105 1238, 84 158 (1985), severable breach-of-contract arbitrated. 142a. Finally, raised first time appeal.6 140a, n. 12 Supreme review. 144a. We noted probable jurisdiction,7 479 982, 567, 93 572 (1986), now reverse. II 13 "Section congressional declaration liberal state substantive procedural contrary. section create body law arbitrability, applicable within coverage Act." Moses H. Cone Memorial Hospital Mercury Construction Corp., 460 1, 24, 103 927, 941, 74 765 (1983). Enacted Commerce I, 8, 3, courts. Southland Corp. Keating, 465 11-12, 104 852, 858-859, 79 (1984) (§ Franchise Investment Law interpreted consideration law). As stated "[i]n states arbitration." S.Ct., 858. "Congress intended foreclose legislative attempts undercut enforceability 16, 861 (footnote omitted). therefore, embodies requiring unless part evidencing interstate commerce revocable "upon grounds exist equity revocation contract." "We see nothing indicating broad principle additional limitations law." supra, 11, 14 involved broker empowered promulgate rules SEC these bound matter law, laws court. But emanated specific regulatory statute governing industry—the Act. examined "no rule regulation specifie[d] favored means employer-employee disputes," 135, 393, revealed necessity "nationwide uniformity exchange's housekeeping affairs." 136, 394. fact outside SEC's militated finding 135-136, 393-94. Absent finding, could conclude California's would interfere scheme. 139-140, 395-96. By contrast, addresses Congress' agreements full Clause. Its general applicability reflects "[t]he preeminent concern passing into entered. 221, 1242. have accordingly must "rigorously enforce[d]." Ibid.; Shearson/American Express McMahon, 220, 226, 2332, 185 (1987); Mitsubishi Motors Soler Chrysler-Plymouth, Inc., 473 614, 625-626, 3346, 3353, 87 444 (1985). This places unmistakable conflict litigants provided disputes. Therefore, give way. 16 decision, There, number decisions having "endorsed suitability rights." Ibid. (emphasis added). Footnote Rather, import reasoning—and perhaps result—in might been different if "itself ha[d] Ibid.8 17 Our preempts obviates need our 1242, severance claim. likewise decline lack claims, below refusing However, do reject questions standing before perceive it, simply interpretation: construed, light circumstances surrounding has arisen them. remand; us exclusively upon below.9 18 judgment reversed, case remanded inconsistent opinion. so ordered. 20 dissenting. 21 Despite striking similarity correctly concludes precise presented decided Ware. Even though books almost 50 years 1973, apparently neither nor even possibility last few effectively rewritten it certainly intend. 18-21, 862-864, (STEVENS, concurring part). dicta some recent cases admittedly enough case, ante, 489-491, but none prior point, doctrine stare decisis controlling. Cf. (1987) Accordingly, share O'CONNOR's except certain categories preserved decides otherwise, affirm Appeal. 22 23 today holds (Act), requires (1984), applies well proceedings. Because continue believe "unfaithful intent, unnecessary, [Act's] antecedents intervening contraction power, inexplicable," 36, 871 (O'CONNOR, dissenting), respectfully dissent. 24 adhere position inapplicable proceedings, however, still can limit preclude waiver forum, will deduced statute's text history, "from inherent underlying purposes." 227, (1987). STEVENS observed, explained why legislatures able forum: 25 refuse exercise independent concerning conditions generally invalid contrary public source attaches rather than Government. find evidence double standard apply, lightly impute 1925 enacted 21, 863. 26 standards most recently applied there little doubt Legislature forum; clear, moreover, important policy. specifically thereby "to protect worker exploitative who prospective employee sign away advance resort system redress grievance," "manifested itself through courts." Smith 131, 132-133, 391, 392, (1973). 27 view, choice waivers entitled respect. provides, relevant part: "A written transaction involving settle thereafter transaction, refusal perform whole thereof, valid, irrevocable enforceable, save where party failed, neglected, 4. 200(a) defines "wages" amounts earned "commission basis." fall statutory definition. 128a, 140a. gave ruling preclusive entered final order dismissing Peabody's parallel proceeding. 85-1257RJK (CD Sept. 29, 245a); 235a. Having dispositive, constitutes unconscionable, unenforceable adhesion "(a) selection arbitrators made presumptively biased management; (b) denial meaningful discovery unduly oppressive frustrates employee's relief." 74a. amendments removed theoretical underpinnings expanding rules. 78s(c). Appellants make distinguishing Brief 17-20 (citing S.Rep. 94-75, pp. 22-38 U.S.Code Cong. Admin.News 1975, 179; Drayer Krasner, F.2d 348, 356-359 (CA2), cert. denied, 436 948, 98 2855, 56 791 (1978)). rest amended relates Objecting request formal Statement Decision following summary motion compel, standing" seek compelling 120a. replied inhered Thomas. 124a. response, submitted supporting show 132a. amend Proposed Decision, 128a-129a, arguments, formally adopted appealed. 135a. "squarely Ware," declined arbitration: adhesion. 141a, 3; 4, supra. Jurisdiction 28 1257(2). 6-8, 856-857, (1984). First among cited Wilko Swan, 346 427, 182, L.Ed. 168 (1953), 1933 prevailed latter, invalid. No presented. Only unexplained citation Prima Paint Flood Conklin Mfg. 388 395, 1801, 1270 (1967), principles pre-emption. support position. containing clause asserted fraud inducement contract. while determination procured fraud, induced making performance fell 404, 1806. dismissed adhered sitting follow Erie R. Tompkins, 304 64, 58 817, 82 1188 (1938). reasoned instead pursuant, part, constitutional regulate commerce, 404-405, 1806, distinction endows force below, nn. 6, remand. note, choice-of-law arises when defenses so-called unconscionability arguments asserted. instances these, touchstone choosing state-law common envisioned passage statute: An irrevocable, (1983), "save Thus origin, govern issues validity, revocability, contracts generally. A takes meaning precisely comport Paint, 1806; 16-17, 861, 11. not, then, assessing construe manner otherwise construes nonarbitration law. Nor rely uniqueness enable what legislature cannot.

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