Source: https://m.openjurist.org/948/f2d/305/willis-v-dean-witter-reynolds-inc
Timestamp: 2019-11-22 13:04:32
Document Index: 375294600

Matched Legal Cases: ['§ 1', '§ 621', '§ 10', '§ 1', '§ 2', '§ 1', '§ 1', '§ 2', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 2', '§ 1', '§ 1']

948 F2d 305 Willis v. Dean Witter Reynolds Inc | OpenJurist
948 F. 2d 305 - Willis v. Dean Witter Reynolds Inc
948 F2d 305 Willis v. Dean Witter Reynolds Inc
948 F.2d 305
57 Fair Empl.Prac.Cas. (BNA) 386,
57 Empl. Prac. Dec. P 41,079, 60 USLW 2335
Linda WILLIS, Plaintiff-Appellee,
No. 91-5100.
Willis responded to Dean Witter's motion and filed a motion for leave to amend her complaint to add a claim under Title VII. The issue of the arbitrability of all claims, including the tendered Title VII claim, was briefed by both parties and a hearing was held on December 21, 1990. On the same day the court entered its memorandum and order granting Willis leave to amend her complaint, granting Dean Witter's motion to compel arbitration on Willis' contract claims, and denying the motion to compel arbitration of Willis' claims under Title VII and Kentucky civil rights provisions. 753 F.Supp. 206. This timely appeal followed.
The sole issue before the court is whether the district court erred in denying Dean Witter's motion to compel arbitration of Willis' civil rights claims based upon the arbitration clause in the securities registration form and relevant New York Stock Exchange Rules. The parties' briefs and the amicus brief submitted by the Equal Employment Opportunity Commission ("EEOC") in support of the plaintiff were all written prior to the Supreme Court's decision in Gilmer v. Interstate/Johnson Lane Corp., --- U.S. ----, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). In Gilmer, the Supreme Court held that the same arbitration clause, contained in the same securities registration form and New York Stock Exchange rule, was enforceable under the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-15 (1988), and that an action brought by a securities dealer for age discrimination under the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. §§ 621-634, was subject to mandatory arbitration. Gilmer, 111 S.Ct. at 1657. As will be elucidated below, we find Gilmer to be dispositive of every argument presented by the plaintiff and the EEOC in this appeal. Cf. Alford v. Dean Witter Reynolds, Inc., 905 F.2d 104 (5th Cir.1990), vacated, --- U.S. ----, 111 S.Ct. 2050, 114 L.Ed.2d 456 (1991) (decision finding Title VII claims non-arbitrable under the FAA vacated and remanded for reconsideration in light of Gilmer ).
Gilmer involved a suit by a former registered securities representative for discrimination under the ADEA. Like Willis, the plaintiff in Gilmer was required to register as a securities representative with several stock exchanges, including the NYSE, as a condition of employment. The plaintiff's registration application, the Uniform Application for Securities Industry Registration or Transfer, provided that the plaintiff, among other things, " 'agree[d] to arbitrate any dispute, claim or controversy' arising between him and [his employer] 'that is required to be arbitrated under the rules, constitutions or by-laws of the organizations with which [he] register[s].' " Gilmer, 111 S.Ct. at 1650 (quoting Securities Registration Form). Under NYSE Rule 347, quoted above, the plaintiff was required to arbitrate any controversy " 'arising out of the employment or termination of employment of such representative.' " Id. at 1651 (quoting Rule 347).
The defendant in Gilmer claimed that the arbitration agreement in the Securities Registration Form and the FAA required that the plaintiff's claim under the ADEA be submitted to arbitration. The district court below denied the defendant's motion for arbitration based upon the Supreme Court's decision in Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974), "and because it concluded that 'Congress intended to protect ADEA claimants from the waiver of a judicial forum.' " Gilmer, 111 S.Ct. at 1651.
415 U.S. at 45, 47, 94 S.Ct. at 1018, 1019. Willis argues that Alexander precludes a finding that employees can waive their right to court adjudication of their Title VII claims by signing an agreement with an arbitration clause contained therein. See Swenson v. Management Recruiters Int'l, Inc., 858 F.2d 1304 (8th Cir.1988), cert. denied, 493 U.S. 848, 110 S.Ct. 143, 107 L.Ed.2d 102 (1989) (relying on Alexander to find that Title VII not subject to waiver through arbitration clause); Utley v. Goldman Sachs & Co., 883 F.2d 184 (1st Cir.1989). But see Alford, 905 F.2d at 104 (relying on Alexander to find Title VII not subject to arbitration, but vacated for reconsideration in light of Gilmer ).
Although the Supreme Court does not overrule Alexander in Gilmer, it does reject a reading of Alexander as prohibiting the arbitration of employment discrimination claims. Gilmer, 111 S.Ct. at 1656. Specifically, in response to the arguments based upon Alexander, the Court in Gilmer states:
Gilmer, 111 S.Ct. at 1657 (citation omitted). Given the Court's plain exposition here on its view of the meaning of Alexander and the Court's decision vacating Alford which took exactly the position put forward by the plaintiff in the instant case, we find reliance on Alexander in this context to be foreclosed.
In Gilmer the Court begins its discussion of the FAA with a recognition of its broad scope and a summary of recent statutory rights which have been held to be arbitrable under the FAA. See, e.g., Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985) (finding claims under the Sherman Act arbitrable); Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987) (finding claims under the civil provisions of RICO and § 10(b) of the Securities Exchange Act arbitrable); Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989) (finding claims under the Securities Act of 1933 arbitrable). After summarizing its recent cases regarding the scope of the FAA, the Court states:
In these cases we recognized that '[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum.' Mitsubishi, 473 U.S. at 628, 105 S.Ct. at 3354.
Gilmer, 111 S.Ct. at 1652. The Court goes on to state that
[a]lthough all statutory claims may not be appropriate for arbitration, '[h]aving made the bargain to arbitrate, the party should be held to it unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue.'Id. (quoting Mitsubishi, 473 U.S. at 628, 105 S.Ct. at 3354-55).
The plaintiff in Gilmer attempted to demonstrate that Congress had meant to exempt the ADEA from arbitration by references to the statutory scheme, the statute's purposes and public importance of the rights protected under the ADEA. See Gilmer, 111 S.Ct. at 1652-53. Further, just as Willis and the EEOC argue in the present case, the plaintiff in Gilmer argued that the scheme of EEOC enforcement of the ADEA evidenced that the ADEA was ill-suited to settlement proceedings through arbitration. Id. at 1653. In response to these arguments, the Court stated:
Gilmer, 111 S.Ct. at 1653. As there is no relevant difference between the EEOC's role under the ADEA and the agency's role under Title VII, we also find this avenue to be foreclosed.
Congress ... did not explicitly preclude arbitration or other non-judicial resolution of claims, even in its recent amendments to the ADEA. '[I]f Congress intended the substantive protection afforded [by the ADEA] to include protection against waiver of the right to a judicial forum, that intention will be deducible from text or legislative history.'
Gilmer, 111 S.Ct. at 1654 (quoting Mitsubishi, 473 U.S. at 628, 105 S.Ct. at 3354). As described above, the Supreme Court in Alexander had found such an intent expressed by Congress with regard to a preference for a judicial forum for Title VII. The Court in Gilmer limited, however, the scope of Alexander to circumstances in which the agreement to arbitrate did not include a waiver of statutory rights independent of the collective-bargaining agreement. See Gilmer, 111 S.Ct. at 1657. Thus, we find that the Court has rejected the argument that Title VII precludes an arbitral forum from handling such claims if a party agrees to submit all statutory claims to arbitration. See Alford, 905 F.2d 104.
As Gilmer contends, the ADEA is designed not only to address individual grievances, but also to further important social policies. We do not perceive any inherent inconsistency between those policies, however, and enforcing agreements to arbitrate age discrimination claims. It is true that arbitration focuses on specific disputes between the parties involved. The same can be said, however, of judicial resolution of claims. Both of these dispute resolution mechanisms nevertheless also can further broader social purposes. The Sherman Act, the Securities Exchange Act of 1934, RICO, and the Securities Act of 1933 all are designed to advance important social public policies, but, as noted above, claims under those statutes are appropriate for arbitration. '[S]o long as the prospective litigant effectively may vindicate [his or her] statutory cause of action in the arbitral forum, the statute will continue to serve both its remedial and deterrent function.' Mitsubishi, 473 U.S. at 637, 105 S.Ct. at 3359.
Gilmer, 111 S.Ct. at 1653. This passage, particularly the last quotation from Mitsubishi, indicates a rejection of the assertion that employment discrimination claims are inappropriate for arbitration because they involve or impact public rights and policies. Thus, we find this argument also to be foreclosed.
In arguing that arbitration is inconsistent with the ADEA, Gilmer also raises a host of challenges to the adequacy of arbitration procedures. Initially, we note that in our recent arbitration cases we have already rejected most of these arguments as insufficient to preclude arbitration of statutory claims. Such generalized attacks on arbitration 'res[t] on suspicion of arbitration as a method of weakening the protections afforded in the substantive law to would be complainants,' and as such, they are 'far out of step with our current strong endorsement of the federal statutes favoring this method of resolving disputes.' Rodriguez de Quijas, 490 U.S. at 481, 109 S.Ct. at 1920.
Gilmer, 111 S.Ct. at 1654. The Court then went on to interpret the same NYSE arbitration rule at issue in this case to reject all of the plaintiff's remaining procedural objections to arbitration of his claims under the ADEA. See id. at 1654-55. As the same procedural safeguards are at issue in this case under the NYSE rules, we are compelled to reject those arguments based upon alleged procedural deficiencies in the arbitral process as a basis for finding Willis' Title VII claim non-arbitrable.
9 U.S.C. § 1. In holding that the FAA was based upon the broad power of Congress to regulate commerce, the Court suggested in Southland Corp. v. Keating that Congress' use of the term "commerce" in the FAA was meant to extend the applicability of the Act and its exclusions to the scope of Congress' power under the commerce clause. 465 U.S. 1, 11-16, 104 S.Ct. 852, 858-61, 79 L.Ed.2d 1 (1984); see also Foster v. Turley, 808 F.2d 38, 40 (10th Cir.1986) (with respect to the FAA, the "requirement that the underlying transaction involve commerce is to be broadly construed so as to be coextensive with congressional power to regulate under the Commerce Clause"); Mesa Operating Limited Partnership v. Louisiana Intrastate Gas Corp., 797 F.2d 238, 243 (5th Cir.1986) (commerce under the FAA includes all contracts "relating to interstate commerce"). While the cases just mentioned interpreted the term "involving commerce" in relation to § 2 of the FAA, courts have held that the same meaning for "commerce" was meant to apply throughout the entire Act, including § 1. See United Elec., Radio, & Mach. Workers v. Miller Metal Prods., Inc., 215 F.2d 221, 224 (4th Cir.1954) (declining to adopt a narrow construction of § 1 because the inclusionary language in § 2 was intended to exercise the full extent of the commerce power and reading the exclusionary clause using similar language narrowly would be inconsistent); see also A. Cox, Grievance Arbitration in the Federal Courts, 67 Harv.L.Rev. 591, 599 (1954) ("One should not rely on one policy in interpreting the phrases relating to commerce and an opposite conception in reading 'contract of employment' ").
A review of the legislative history of the FAA confirms that the FAA was never meant to incorporate employment contracts with the requisite effects on interstate commerce within its scope. The Act was originally drafted by a committee of the American Bar Association to overturn a common-law rule which precluded enforcement of agreements to arbitrate in commercial contracts. See Gilmer, 111 S.Ct. at 1659 (Stevens, J., dissenting); see also Southland Corp., 465 U.S. at 14, 104 S.Ct. at 860 (1984) ("The problems Congress faced [when passing the Act] were therefore twofold: the old common-law hostility toward arbitration and the failure of state arbitration statutes to mandate enforcement of arbitration agreements"). At a hearing of the Senate Judiciary Committee, the chairman of the ABA committee responsible for drafting the bill stated that the bill "is not intended [to] be an act referring labor disputes, at all. It is purely an act to give the merchants the right or privilege of sitting down and agreeing with each other as to what their damages are, if they want to do it. Now that is all there is in this." Hearings on S. 4213 and S. 4214 Before the Subcomm. on the Judiciary, 67th Cong. 4th Sess. 9 (1923) (emphasis added). Therefore, the plain language of the exclusion, taken with the description of its meaning by the chairman of the committee that drafted the FAA, suggests an intent to create a mechanism through which businesses might agree to resolve disputes without recourse to the courts. Thus, although Congress passed the FAA to ensure that courts honor the contractual agreement of parties who choose to resolve their disputes by arbitration, Mitsubishi, 473 U.S. at 625-26, 105 S.Ct. at 3353, it limited the scope of the Act by creating a category of contracts not subject to the Act's strictures. Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983) (the Act only mandates enforcement of arbitration clauses in contracts covered by the Act). Among this category of excluded contracts are "contracts for employment." 9 U.S.C. § 1.
Consistent with this reading of § 1 of the FAA, this court has held that collective bargaining agreements are "contracts of employment" and therefore outside the scope of the FAA. See, e.g., Bacashihua v. USPS, 859 F.2d 402, 404-05 (6th Cir.1988) (finding collective bargaining agreements are "contracts of employment" within the meaning of § 1 of the FAA and thus excluded from the coverage of the Act); Occidental Chem. Corp. v. Local 820, Int'l Chem. Workers Union, 853 F.2d 1310, 1315 (6th Cir.1988); accord United Paperworkers Int'l Union v. Misco, 484 U.S. 29, 108 S.Ct. 364, 372 n. 9, 98 L.Ed.2d 286 (1987) ("The Arbitration Act does not apply to 'contracts of employment of ... workers engaged in foreign or interstate commerce.' "). We can see no reason to conclude that individual employment contracts involving employers engaged in interstate commerce should be treated differently. Had Congress intended to limit the meaning of the phrase "contracts of employment" in § 1 of the FAA to encompass only collective bargaining agreements, it surely would have said so.
Several amici curiae ... argue that [§ 1 of the FAA] excludes from the coverage of the FAA all 'contracts of employment.' ... In any event, it would be inappropriate to address the scope of the § 1 exclusion because the arbitration clause being enforced here is not contained in a contract of employment. The FAA requires that the arbitration clause being enforced be in writing. See 9 U.S.C. §§ 2, 3. The record before us does not show, and the parties do not contend, that Gilmer's employment agreement with Interstate [the employer] contained a written arbitration clause. Rather, the arbitration clause at issue is in Gilmer's securities registration application, which is a contract with the securities exchanges, not with Interstate. The lower courts addressing the issue uniformly have concluded that the exclusionary clause in § 1 of the FAA is inapplicable to arbitration clauses contained in such registration applications. We implicitly assumed as much in Perry v. Thomas [482 U.S. 483, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987) ], where we held that the FAA required a former employee of a securities firm to arbitrate his statutory wage claim against his former employer, pursuant to an arbitration clause in his registration application. Unlike the dissent, we choose to follow the plain language of the FAA and the weight of authority, and we therefore hold that § 1's exclusionary clause does not apply to Gilmer's arbitration agreement. Consequently, we leave for another day the issue raised by the amici curiae.
Gilmer, 111 S.Ct. at 1651 n. 2 (emphasis added) (citations omitted). Willis and the EEOC argue that, despite Gilmer, we should construe the arbitration provision contained in Willis' registration application as part of her contract of employment. This position is clearly foreclosed, however, by the plain language of Gilmer.