Case Name: James J. NICHOLSON v. CPC INTERNATIONAL INC., a corporation, and James R. Eiszner, Appellants
Court: United States Court of Appeals for the Third Circuit
Jurisdiction: United States
Decision Date: 1989-06-02
Citations: 877 F.2d 221
Docket Number: No. 88-5588
Parties: James J. NICHOLSON v. CPC INTERNATIONAL INC., a corporation, and James R. Eiszner, Appellants.
Judges: Before SLOVITER and BECKER, Circuit Judges, and FULLAM, District Judge .
Reporter: Federal Reporter 2d Series
Volume: 877
Pages: 221–244

Head Matter:
James J. NICHOLSON v. CPC INTERNATIONAL INC., a corporation, and James R. Eiszner, Appellants.
No. 88-5588.
United States Court of Appeals, Third Circuit.
Argued Dec. 8, 1988.
Decided June 2, 1989.
As Amended June 7, 1989.
Rehearing and Rehearing In Banc Denied July 10, 1989.
Carmine A. Iannaccone (Argued), John M. Simon, Hannoch Weisman, P.C., Rose-land, N.J., Samuel Estreicher, Cahill Gordon & Reindel on the brief, New York City, for appellants.
Walter L. Leib, Gary E. Roth (Argued), Richard M. Cohen, Leib, Kraus, Grispin & Roth, P.C., Scotch Plains, N.J., for appellee.
Charles A. Shanor, Gen. Counsel, Gwendolyn Young Reams, Associate Gen. Counsel, Lorraine C. Davis, Asst. Gen. Counsel, Gale Barron Black (Argued), E.E.O.C., Washington, D.C., for amicus curiae in support of appellee.
Before SLOVITER and BECKER, Circuit Judges, and FULLAM, District Judge .
Hon. John P. Fullam, Chief Judge, United States District Court for the Eastern District of Penn sylvania, sitting by designation.

Opinion:
OPINION OF THE COURT
SLOVITER, Circuit Judge.
The district court certified for interlocutory appeal under 28 U.S.C. § 1292(b) (1982) its order denying the defendants' motion to compel arbitration of the claim of plaintiff, a former employee, alleging that his termination violated the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. § 621 et seq. (1982 & Supp.1986). This court is presented for the first time with the question whether an ADEA suit may be maintained despite a provision in an employment contract to arbitrate disputes arising out of the employment. We conclude, after applying the test of arbitrability devised by the Supreme Court in Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987), and Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985), that Congress did not intend that the right under the ADEA to a judicial forum for protection against age discrimination would be subject to displacement.
I.
The plaintiff in this case, James J. Nicholson, was hired by defendant CPC International, Inc. (CPC) as an attorney in 1957. He rose steadily through the corporate ranks and was appointed Vice-President for Corporate Financial Services in 1981. In January 1986, apparently in anticipation of a possible takeover move, Nicholson and the approximately thirty other corporate officers of CPC in domestic locations were presented with an executive employment agreement, which Nicholson signed. The agreement defined, inter alia, compensation, benefits, job title, and termination pro cedures and benefits, and contained an arbitration clause providing that:
Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators in New York City in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrators' award in any court having jurisdiction. The expense of such arbitration shall be borne by the Company.
App. at 107.
Approximately one year after signing this agreement, Nicholson was informed that his position was to be eliminated in a corporate restructuring. Nicholson filed a timely age discrimination charge with the EEOC which was administratively terminated at his request so that he could file suit. He sued CPC and its President in New Jersey Superior Court, raising claims under the ADEA, state antidiscrimination law, and common law breach of contract theories. CPC removed the case to federal court and moved for an order compelling arbitration of all of Nicholson's claims pursuant to the clause in the employment agreement.
On April 18, 1988, the district court, per Judge H. Lee Sarokin, denied CPC's motion for an order to compel arbitration of the ADEA claim, but granted the motion with respect to all claims arising under state law. Judge Sarokin had previously held in Steck v. Smith Barney, Harris Upham & Co., 661 F.Supp. 543 (D.N.J.1987), that the text and legislative history of the ADEA demonstrated that Congress intended that ADEA claims be nonarbitrable. In denying CPC's motion for arbitration, Judge Sarokin stated that the Supreme Court's opinion in Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987), did not alter the analysis he had used in Steck.
Following the district court's ruling, CPC requested the court to certify for interlocutory appeal under 28 U.S.C. § 1292(b) the question "whether the plaintiff's federal claim under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. is arbitrable." App. at 57. The district court, undoubtedly cognizant that under the statute it can certify only an order, not a question, see Johnson v. Alldredge, 488 F.2d 820, 822-23 (3d Cir.1973), cert. denied, 419 U.S. 882, 95 S.Ct. 148, 42 L.Ed.2d 122 (1974), certified the portion of the order dealing with the ADEA claim because it was of the opinion "that the arbitrability of an action under the ADEA is a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation." App. at 62. This court granted CPC's petition for leave to appeal on July 6, 1988. We subsequently granted a motion by the Equal Employment Opportunity Commission (EEOC) to intervene in support of Nicholson's position.
II.
In several recent cases, the Supreme Court discarded its earlier reluctance to order arbitration of statutory claims. In Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987), the Court stated that the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq. (1982), establishes a " 'federal policy favoring arbitration,' " id. 107 S.Ct. at 2337 (quoting 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)), which is not diminished when a party to an arbitration agreement raises claims under a federal statute. However, the presumption of arbitrability under the FAA will be defeated when it is "overridden by a contrary congressional command" in another statute. Id. Applying these principles, the Court has held arbitration agreements to be enforceable with respect to claims arising under the Sherman Act, see Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985), under section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (1982), see Shearson, 107 S.Ct. at 2338-43, and under the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq. (1982), see Shearson, 107 S.Ct. at 2343-46. Moreover, the Court has just overruled its decision in Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953), which had held arbitration agreements were not enforceable as to claims under section 12(2) of the Securities Act of 1933. See Rodriguez de Quijas v. Shearson/American Express, Inc., — U.S. -, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989). The de Quijas opinion is consistent with the line of cases enforcing arbitration agreements in the setting of business transactions.
Significantly, the Court in Mitsubishi noted "[t]hat is not to say that all controversies implicating statutory rights are suitable for arbitration." 473 U.S. at 627, 105 S.Ct. at 3354; see also Gavalik v. Continental Can Co., 812 F.2d 834, 850 (3d Cir.), cert. denied, — U.S. -, 108 S.Ct. 495, 98 L.Ed.2d 492 (1987) (Congress did not intend that plaintiff raising discrimination claim under ERISA be required to exhaust arbitral remedies). Nothing in Mitsubishi or Shearson suggests that the Court was overruling its prior holdings that arbitration agreements do not preclude access to a judicial forum for resolution of claims arising under the Fair Labor Standards Act (FLSA), see Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981); under 42 U.S.C. § 1983, see McDonald v. City of West Branch, 466 U.S. 284, 104 S.Ct. 1799, 80 L.Ed.2d 302 (1984); and under Title VII of the Civil Rights Act of 1964, see Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974). Although each statutory scheme requires its own discrete analysis, in deciding whether the statutory right under the ADEA to a judicial forum can be waived we are guided by the Court's decisions, on one hand, that access to the courts under the FLSA, section 1983 and Title VII cannot be displaced and by its decisions, on the other hand, that the right to a court trial is waivable under the Sherman Act, securities acts and civil RICO.
We proceed to examine the statutory scheme embodied in the ADEA to ascertain whether Congress intended "to preclude a waiver of judicial remedies for the statutory rights at issue," a determination which must be made " 'from the text or legislative history' " of the statute or from "an inherent conflict between arbitration and the statute's underlying purposes." Shearson, 107 S.Ct. at 2337 (citing Mitsubishi, 473 U.S. at 628, 105 S.Ct. at 3354).
A. The Text of the ADEA
No language in the ADEA speaks directly to the effect of an arbitration agreement. On the other hand, the statutory scheme reflects Congress' careful structuring of the procedure to be followed in enforcing the rights granted by the Act.
The ADEA vests primary enforcement responsibility with the Equal Employment Opportunity Commission (EEOC), 29 U.S.C. § 626, to which the individual's right of action under the Act is secondary. Thus, individuals are not permitted to file suit alleging unlawful discrimination under the ADEA unless they first file an administra tive complaint with the EEOC and wait sixty days while the EEOC considers the charge. 29 U.S.C. § 626(d). The EEOC is instructed under the Act to "attempt to eliminate the discriminatory practice or practices alleged" by first attempting to effect voluntary compliance with the statute "through informal methods of conciliation, conference, and persuasion." 29 U.S. C. § 626(b). If these methods of inducing compliance fail, the EEOC is authorized to bring suit in a court of competent jurisdiction. 29 U.S.C. § 626(c)(1). Once the EEOC has exercised this option, the individual's right to file suit terminates. Id. In this respect, unlike under Title VII, see 42 U.S.C. § 2000e-5(f)(1), the individual's right under the ADEA to seek redress against an employer for age discrimination is subordinate to the enforcement activities of the public agency charged with the Act's administration. See also Rogers v. Exxon Research and Engineering Co., 550 F.2d 834, 841 (3d Cir.1977), cert. denied, 434 U.S. 1022, 98 S.Ct. 749, 54 L.Ed.2d 770 (1978).
Although enforcement of the ADEA has shifted from the Secretary of Labor to the EEOC, see Reorg. Plan No. 1 of 1978, 43 Fed.Reg. 19,807, reprinted in 5 U.S.C. App. at 1155 (1982), and in 92 Stat. 3781, the original requirement that the ADEA be enforced pursuant to the enforcement provisions of the FLSA has been fully retained and continues to govern enforcement proceedings under the Act. Our consideration of the effect of the statutory scheme on the arbitrability of ADEA claims is, therefore, informed by the decision of the Supreme Court in Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981), holding that the provisions of the FLSA set forth in 29 U.S.C. § 216(b) were intended to give employees a right of access to court which could not be waived through an agreement to arbitrate. These provisions, including civil liability for employer violations of the applicable laws, a right by aggrieved employees to bring an action in any court of competent jurisdiction, and the termination of this right upon the filing of a complaint for "injunction proceedings" by the agency in charge of enforcement of the statute, see 29 U.S.C. § 216(b), are as fully applicable to ADEA actions as to FLSA actions. The Barrentine Court held that notwithstanding the national policy in favor of contractual dispute-resolution procedures between labor and management, "[n]ot all disputes between an employee and his employer are suited for binding resolution in accordance with the procedures established by collective bargaining" and stated that "different considerations apply where the employee's claim is based on rights arising out of a statute designed to provide minimum substantive guarantees to individual workers." 450 U.S. at 737, 101 S.Ct. at 1443.
CPC argues that Barrentine is distinguishable in spite of its consideration of the identical remedy provisions as those involved here because claims arising under the ADEA are different in nature from those under the FLSA and because an individual rather than a collective arbitration agreement is involved. We agree that further inquiry into the arbitrability of ADEA claims is warranted, although we must give due regard to the authority provided by Barrentine.
B. The Legislative History of the ADEA
The Court has instructed us to turn to the legislative history as well as the textual provisions of the statute at issue to discern whether there is evidence of Congress' intent to establish an enforcement scheme that would not be preempted by arbitration. As in the case of the statutory language, we find no direct reference to arbitration and we must therefore draw inferences from Congress' actions.
A precursor proposal to the ADEA would have added discrimination on the basis of age to the forms of discrimination prohibited by Title VII. After the defeat of this proposal, see 110 Cong.Rec. 2599, 13,492 (1964), reprinted in EEOC, Legislative History of the Age Discrimination in Employment Act 8, 14 (1981) [hereinafter ADEA History ], the final version of Title VII enacted into law merely directed the Secretary of Labor to investigate the ex tent of age discrimination in employment and to make recommendations about appropriate legislative responses. See The Civil Rights Act of 1964, Pub.L. No. 88-352, Title VII, § 715, 78 Stat. 265-66 (1964). Following the issuance of the Secretary of Labor's report, which documented a pervasive problem of age discrimination throughout the economy, see Report of the Secretary of Labor, The Older American Worker: Age Discrimination in Employment (1965), reprinted in ADEA History at 16-41 [hereinafter "Secretary's Report"], Congress again took up consideration of legislation to bar discrimination on the basis of age in employment. At this time, the debate about enforcement narrowed to the choice between patterning an enforcement scheme on that of the National Labor Relations Act (NLRA) or on the FLSA.
Despite an unsuccessful attempt in 1966 to have the proposed statute prohibiting age discrimination enforceable under the FLSA through the Wage and Hour Division of the Department of Labor, Senator Javits again introduced this proposal in 1967. See 113 Cong.Rec. 2199 (1967), reprinted in ADEA History at 64. Senator Yarborough introduced a competing proposal, supported by the Administration, which contained an enforcement scheme modelled after that of the NLRA, and thus would have provided for resolution of claims of age discrimination through administrative proceedings, with hearings conducted by the Department of Labor and review of the Secretary's determinations through petition to the courts of appeals. See 113 Cong.Rec. 2795 (1967), reprinted in ADEA History at 69.
The applicable House and Senate committees considered these alternative proposals and opted for the FLSA enforcement scheme proposed by Senator Javits. See H.R.Rep. No. 805, 90th Cong., 1st Sess. 5-6 (1967), reprinted in ADEA History at 78-79, U.S.Code Cong. & Admin.News 1967, p. 2213; Sen.Rep. No. 723, 90th Cong., 1st Sess. 5, 13-14 (1967), reprinted in ADEA History at 109, 117-18. The bills adopting the FLSA scheme which were reported out of these committees became the basis for the ADEA, passed by both houses and signed into law later that year. Thus, Congress made a deliberate policy choice in favor of enforcement of ADEA claims in court proceedings.
Significantly, Congress did not borrow the enforcement scheme of Title VII, which at that time granted aggrieved individuals, but not the EEOC, authority to bring suit against private employers. See The Civil Rights Act of 1964, Title VII, § 706, Pub.L. No. 88-352, 78 Stat. 259-62 (1964). Instead, Congress placed primary responsibility for eliminating age discrimination in employment in the hands of the Secretary of Labor (later the EEOC) and gave the Secretary the power to ensure compliance with the ADEA by filing suit, if necessary, on behalf of the aggrieved individual.
In 1978, Congress amended the ADEA to reinforce further the statute's focus on public agency enforcement through the courts, adding a provision to toll the statute of limitations for filing suit for up to one year pending completion of agency efforts to effect voluntary compliance. See 29 U.S.C. § 626(e)(2). The purpose of this amendment, according to the Senate committee recommending it, was to ensure that "[t]he claim of discrimination . be decided on the merits through litigation in the event the conciliation process fails" and "to prevent those who have violated the Act from delaying and postponing conciliation and thereby possibly avoiding liability." Sen.Rep. No. 493, 95th Cong., 1st Sess. 13 (1977), reprinted in ADEA History at 446 (emphasis added). This suggests that Congress intended that extrajudicial methods of seeking resolution of age discrimination claims should not impede ultimate resolution of those claims in a judicial forum when extrajudicial methods proved inadequate.
C. Inherent Incompatibility
Because the language of the statute and the legislative history, while suggestive, are not conclusive of congressional intent regarding arbitration of ADEA claims, we must examine whether the objectives of the ADEA are inherently incompatible with the displacement by arbitration of a judicial forum for claimants alleging age discrimination. See Shearson, 107 S.Ct. at 2337. Our examination of this factor leads us to conclude that the ADEA is one of the statutory schemes that present the "inherent conflict [with] arbitration" referred to by the Supreme Court in Shearson. Id.
We begin with Congress' clear intent that compliance with the ADEA be overseen by a public agency. The EEOC's obligation to enforce the ADEA goes beyond its authority to investigate and redress a particular employee's complaint. Acting under its statutory powers set forth in, e.g., 29 U.S.C. § 209, 211, 216, 217, 625, 626, the EEOC has promulgated regulations pursuant to which it investigates violations of the ADEA and takes measures to secure enforcement. It may receive information concerning alleged violations of the ADEA "from any source." 29 C.F.R. § 1626.4 (1988). It may investigate and gather data, inspect establishments and records, interview employees, and impose recordkeeping and reporting requirements. 29 C.F.R. § 1626.15. It is also the agency that must issue interpretative regulations which provide guidance to all employers. 29 U.S.C. § 628. It advises employers, employment agencies and labor organizations of their obligations under the Act and any necessary changes in their policies as employers. 29 C.F.R. § 1626.15.
As the agency entrusted by Congress with oversight of the age discrimination law, the EEOC has the obligation to report to Congress annually and to submit its recommendations for further legislation. 29 U.S.C. § 632. Although some of its information may come from investigations which it has independently initiated, see 29 C.F.R. § 1626.4, obviously much of its information will be triggered by investigations based on charges filed in particular cases. Any procedure that detracts from the EEOC charge requirement would undermine Congress' design, since the charge not only informs the EEOC of the particular discrimination but also may identify other unlawful practices.
In cases dealing with Title VII, the Supreme Court has noted the importance of the charge requirement. See EEOC v. Shell Oil Co., 466 U.S. 54, 69, 104 S.Ct. 1621, 1631, 80 L.Ed.2d 41 (1984) (a charge places the EEOC on notice that someone believes a violation has been committed and helps to focus the EEOC investigation); General Telephone Co. v. EEOC, 446 U.S. 318, 326, 100 S.Ct. 1698, 1704, 64 L.Ed.2d 319 (1980) ("the EEOC is not merely a proxy for the victims of discrimination . it acts also to vindicate the public interest in preventing employment discrimination."). The charge serves equally important roles under the ADEA.
Because the filing of a charge is a prerequisite to a court action under the ADEA, see 29 U.S.C. § 626(d), the statutory scheme insures that the EEOC will receive information about employment practices in the marketplace through the series of charges filed with it. Employees and lawyers for employees will have little incentive to file charges of age discrimination with the EEOC if they cannot thereafter proceed to a judicial forum but instead must arbitrate their claims, a procedure which does not require filing of an EEOC charge. Of course, aggrieved parties can go to the EEOC in any event, as the dissent argues, but they are not likely to do so. The EEOC can continue to investigate, but it will be deprived of the charge as a triggering mechanism. Any process which contributes to employers' avoidance of the scrutiny to which an EEOC charge investigation would subject them is neces sarily incompatible with the congressional scheme for the ADEA.
The EEOC's role in conciliation and mediation after filing of the charge is another significant indicator of Congress' intent as to the procedure it preferred to be followed for age discrimination claims. CPC argues that because the ADEA encourages resolution of age discrimination disputes through "informal methods of conciliation, conference, and persuasion," 29 U.S.C. § 626(b), arbitration, another informal method for resolving disputes, is consistent rather than incompatible with the statutory scheme. CPC's argument misses the point. Congress' intent, as explicitly stated in the text of the statute, is not only that disputes concerning claims of age discrimination be resolved through informal means, but that the EEOC "eliminate the discriminatory practice or practices alleged" by encouraging voluntary compliance if possible. Id. (emphasis added). It is only through the conciliation process that the EEOC has its opportunity to secure voluntary compliance.
Moreover, no statutory provision gives the EEOC the power to affect the arbitration procedure. In this respect, it is unlike the Securities Exchange Commission, which the Supreme Court noted in Shear-son has been given "expansive power to ensure the adequacy of the arbitration procedures employed" by the self-regulatory organizations [SROs], such as the national securities exchanges and the registered securities associations. See 107 S.Ct. at 2341.
Another principal indicator of the incompatibility of the ADEA with arbitration stems from the inadequacy of arbitration in many cases to enforce the statute effectively. We will assume, as CPC argues, that an arbitrator may award reinstatement of an employee terminated because of age discrimination. Nonetheless, arbitral boards do not have the power to award broad equitable relief which courts have under 29 U.S.C. § 626(b). For example, courts, but not arbitrators, possess power to issue injunctive relief to bar employers from future acts of discrimination. The power of arbitrators does not extend beyond the particular grievants and the particular dispute before them, and arbitrators cannot prohibit an employer from applying discriminatory practices to other employees. See American Arbitration Association, Commercial Arbitration Rules 17 (1981), reproduced in App. at 127 (AAA rules provide that arbitrators' remedies confined to "the scope of the agreement of the parties.").
Congress' intent that courts hearing an ADEA action be invested with power to resolve the problem of age discrimination effectively is reflected in the statutory provision authorizing maintenance of a collective action, i.e., a suit "by any one or more employees for and in behalf of himself or themselves and other employees similarly situated." 29 U.S.C. § 216(b) (1982). We have recently held that to effectuate this provision, courts may authorize notice to be sent to putative class members. See Sperling v. Hoffman-La Roche Inc., 862 F.2d 439 (3d Cir.1988), cert. granted, — U.S. -, 109 S.Ct. 1526, 103 L.Ed.2d 832 (1989). In short, Congress intended the EEOC and the courts to "eliminate" discriminatory practices from the workplace, a role that arbitration cannot accomplish as effectively.
We do not base our conclusion on any disparagement of the competence or sophistication of modern arbitrators. The keystone in determining incompatibility between arbitration and a judicial remedy is the intent of Congress with respect to the particular statute. The holdings of the Court's prior opinions in Gardner-Denver and Barrentine were based on the Court's examination of the provisions, objectives, and enforcement schemes of the statutes involved, and thus we do not deem it dis-positive that those portions of those opinions that reflect the now rejected mistrust of arbitration, see Gardner-Denver, 415 U.S. at 56-59, 94 S.Ct. at 1023-25, and Barrentine, 450 U.S. at 743-45, 101 S.Ct. at 1146-47, may not survive the Court's more recent enthusiastic pronouncements on the virtues of commercial arbitration in Mitsubishi and Shearson.
CPC seeks to distinguish Gardner-Denver, Barrentine and McDonald because in those cases arbitration was required by a collective bargaining agreement. CPC argues that in Gardner-Denver, the Court was unwilling to leave employees' protection of the right against race discrimination to labor unions who had their own history of such discrimination. See also Barrentine, 450 U.S. at 742, 101 S.Ct. at 1445 (Court noted that labor unions do not always pursue goals compatible with those of individual union members). However, it does not follow, as CPC argues, that the arbitration requirement in individually negotiated employment contracts is therefore comparable to that contained in a contract entered into in a commercial context. The disparity in bargaining power between an employer and an individual employee is well known. Older employees who have invested many years of their career with a particular employer may lack any realistic option to refuse to sign a standard form arbitration agreement presented to them by their employers. New employees who need the job may be in a similar position. Although this may not constitute the type of duress which renders a contract voidable, we cannot close our eyes to the realities of the workplace.
Nor are we persuaded by CPC's argument that "the majority of ADEA claimants, like Mr. Nicholson, are upper-middleclass, professional/managerial employees," Brief of Defendants-Appellants at 40, who do not need to be protected from the consequences of their well-informed, voluntary decisions to agree to employment contracts containing arbitration clauses. While it is unlikely that Nicholson, an attorney and sophisticated and experienced executive, was unaware of the nature of the agreement he entered into with CPC, we would be ill-advised to fashion a general rule of law on the basis of the characteristics of a particular plaintiff.
Where Congress intended that certain executive-level employees should not be subject to the requirements of the ADEA, it created an explicit statutory exemption. See 29 U.S.C. § 631(c). Unlike Nicholson, many ADEA plaintiffs are not highly paid executives. The congressional proponents of the ADEA and the Secretary of Labor's seminal report repeatedly emphasized that age discrimination pervaded the economy and constituted a serious problem for older employees earning higher salaries and benefits, both because employers can reap the greatest financial benefits from replacing these employees with younger, lower paid ones, and because these employees will have difficulty finding a comparable position if discharged. See Secretary's Report at 5-6, 15, reprinted in ADEA History at 22-23, 32; 112 Cong.Rec. 20,825 (1966), reprinted in ADEA History at 56; 113 Cong.Rec. 34,749, 34,752 (1969), reprinted in ADEA History at 160, 163. In fact, older employees in highly paid positions may be in a particularly vulnerable position in that employers will have a greater incentive to seek to replace them with younger employees earning lower salaries.
Our analysis of the factors which Mitsubishi and Shearson instruct us to consider, particularly the inherent incompatibility of the statute with arbitral enforcement and remedies, leads us to conclude that Congress did not intend that a contractual arbitration provision should preclude a claimant from access to a judicial forum. In so holding, we join several of our sister circuits which have reached similar conclusions with respect to the ADEA. See, e.g., Criswell v. Western Airlines, Inc., 709 F.2d 544, 547-49 (9th Cir.1983), aff'd on other grounds, 472 U.S. 400, 105 S.Ct. 2743, 86 L.Ed.2d 321 (1985); Cooper v. Asplundh Tree Expert Co., 836 F.2d 1544, 1553 (10th Cir.1988); cf. Swenson v. Management Recruiters International, Inc., 858 F.2d 1304, 1305-07 (8th Cir.1988) (Title VII claims not subject to arbitration under individual employment contract).
The issue before us, an employee's prospective waiver of a judicial forum for ADEA claims, is not comparable to the enforceability of an individual's release of a potential ADEA claim for alleged acts of discrimination that already transpired. See, e.g., Coventry v. United States Steel Corp., 856 F.2d 514 (3d Cir.1988); EEOC v. Cosmair, Inc., 821 F.2d 1085, 1091 (5th Cir.1987); Runyan v. National Cash Register Corp., 787 F.2d 1039, 1045 (6th Cir.) (in banc), cert. denied, 479 U.S. 850, 107 S.Ct. 178, 93 L.Ed.2d 114 (1986). The prospective waiver at issue here involves relinquishment of the employee's rights with respect to potential future disputes, which the employee may not have fully anticipated. Therefore, the cases approving retroactive waivers of ADEA claims are not persuasive on the issue of whether prospective waiver is permissible. The EEOC's proposed rule, see note 10 supra, would have allowed releases of claims without the Commission's supervision or approval, provided that such releases "do not provide for the release of prospective rights or claims." 29 C.F.R. § 1627.16(c)(1) (1988). Thus, it appears that the EEOC's proposed rule would have prohibited the prospective waiver which the dissent seeks to enforce in this case.
In conclusion, our examination of the text, legislative history, and objectives of the ADEA have led us to conclude that the right to a judicial forum under the ADEA is not subject to displacement by a prospective agreement to arbitrate disputes contained in individual employment contracts.
We find the dissent, albeit lengthy, unpersuasive and in response merely reiterate the following:
1. No Supreme Court case requires us to close the doors of the federal courts in an ADEA action merely because the employer has included an arbitration clause in an employment contract. The dissent relies on cases arising in a business context. The closest analogous Supreme Court cases dealing with employees' statutory rights point in the other direction.
2. All of the other court of appeals cases to consider whether an agreement to arbitrate precludes the employee from a judicial forum for resolution of ADEA claims reach the same result as the majority does here.
3. The dissent overlooks the fact that the EEOC, the agency entrusted with oversight of the ADEA, has filed an amicus curiae brief which strongly supports Nicholson's position and requests this court to hold "that arbitration cannot displace judicial enforcement as the exclusive means for resolving claims under the ADEA." EEOC Amicus Brief at 17.
4. If this court holds Nicholson's arbitration agreement effectively precludes him from bringing his ADEA claim in a judicial forum, we may assume that many employers will prepare similar employment contracts, thereby shifting enforcement of the ADEA away from the courts to arbitration. If this is a result desired by Congress, we should wait for Congress to explicitly so state.
III.
Nicholson requests that we extend our review to that portion of the district court's interlocutory order holding that Nicholson's state law claims were arbitrable, even though this portion of the order was not certified for review by the district court. Nicholson argues that it is nonetheless properly before us because we stated in Merican, Inc. v. Caterpillar Tractor Co., 713 F.2d 958, 962 n. 7 (3d Cir.1983), cert. denied, 465 U.S. 1024, 104 S.Ct. 1278, 79 L.Ed.2d 682 (1984), that on a section 1292(b) appeal, "we consider all grounds which might require a reversal of the order appealed from."
We recently rejected a similar argument. See Sperling v. Hoffman-La Roche Inc., 862 F.2d at 443-44. We held there that because the issues involved in the certified and noncertified portions of the order were not closely related, concurrent review was not appropriate. Id. at 443-44. In this case as well, the analysis required to consider the arbitrability of the state law claims presented by Nicholson is different from that for his claim arising under the ADEA.
Furthermore, Congress recently enacted a statute which provides that the courts of appeals have jurisdiction over interlocutory orders declining to order arbitration but not over those compelling arbitration. Judicial Improvements and Access to Justice Act, P.L. No. 100-702, § 1019, 102 Stat. 4670-71 (1988), to be codified at 9 U.S.C. § 15. Because we decline to assume jurisdiction on this interlocutory appeal over the portion of the district court's order that directed arbitration of Nicholson's state law claims, we need not decide the effect of this new statute on our jurisdiction under 28 U.S.C. § 1292(b).
IV.
For the reasons set forth above, we will affirm the district court's order declining to compel arbitration of Nicholson's claim under the ADEA.
. Nicholson's brief raises a number of factual issues, and disputes CPC's claim that the agreement increased his severance benefits and that his assent was voluntary. The district court did not decide these issues, and, because our disposition is based on a legal issue, we do not reach them.
. The district court found that the scope of the arbitration clause in Nicholson's employment contract encompassed his age discrimination claim. In view of our holding, we do not reach Nicholson's contention that the language of the arbitration clause is inapplicable to his ADEA claim.
. We assume that when the Court directed us to examine the statutory text, we were not to limit our search to explicit language prohibiting waiver of a judicial forum. If the absence of such language were dispositive, there would have been no need for the Court to have listed other factors to be examined in discerning congressional intent. Instead, we understand the Court to have instructed us to examine the entire statutory scheme as indicative of Congress' intent as to the manner in which it should be enforced.
. This section was amended in 1972 to grant the EEOC broader litigation powers. See Equal Employment Opportunity Act of 1972, Pub.L. No. 92-261, § 4, 86 Stat. 104 (1972).
. Both Nicholson and the EEOC as amicus curiae on behalf of Nicholson argue that Senator Kennedy's 1978 amendment to the ADEA making explicit the right to a jury trial, see 29 U.S.C. § 626(c), demonstrates Congress' intent that access to a judicial forum be nonwaivable under the ADEA. In light of the fact that a right to a jury trial also exists for claims brought under the Sherman Act, which the Court found to be arbitrable in Mitsubishi, we do not rely on this aspect of the ADEA's legislative history.
. The Court in Shearson stated that "since the 1975 amendments to section 19 of the Exchange Act" the SEC has been given broad authority to regulate the rules these organizations use for arbitrations, including the power to require the adoption, modification, or deletion of rules to ensure that the arbitration procedures adequately protect statutory rights. 107 S.Ct. at 2341 (emphasis added); see 15 U.S.C. § 78s(c) (1982). The ADEA does not expressly empower the EEOC with any authority to dictate to arbitration associations the rules by which they must consider age discrimination claims, much less the power to penalize them for noncompliance. Cf. 15 U.S.C. § 78s(h) (listing sanctions available to SEC). The Court's express reliance on an explicit statutory provision contrasts with the dissent's position that we may "infer" delegation of such power to the EEOC. See dissenting opinion at 239. The dissent's expansive view of the EEOC's power under the ADEA is different from that held by the EEOC, which in this case contrasts the power of the two agencies, saying "Unlike the EEOC, the SEC has the authority to suspend or revoke a [SRO's] registration, to censure and to appoint a trustee on its own initiative." EEOC Amicus Brief at 16 n. 11 (emphasis added).
. There is no basis on this record to assume that anything governs here other than the AAA Commercial Arbitration Rules in effect at the time of the arbitration, which CPC provided the court in its appendix and referred to repeatedly in its argument. While the dissent refers to a 1978 article with proposed rules for arbitration of employment dispute claims, see dissenting opinion at 234 n. 4, no party has referred to them or suggested that they were in effect and applicable here. As to the dissent's argument of expansive arbitral powers, even the secondary source relied on by the dissent would expand an arbitrator's power over parties not before him or her only in limited situations, i.e., those involving a union's action on behalf of represented employees relating to a grievance under the collective bargaining agreement. See M. Hill & A. Sini-cropi, Remedies in Arbitration 240-41 (1981).
. We previously noted that most of the reasons given in Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953), for deprecating the arbitration remedy have subsequently been rejected, see Osterneck v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 841 F.2d 508, 511 (3d Cir.1988), and as noted in the text, the Court has overruled Wilko v. Swan. See Rodriguez de Quijas v. Shearson/American Express, Inc., — U.S. -, 109 S.Ct. 1917, 104 L.Ed.2d 526.
. CPC suggests that distinct groups of management employees may prefer arbitration to litigation. See Brief of Defendants-Appellants at 25. Nothing in this opinion precludes an employee from voluntarily arbitrating his or her age discrimination claim.
. The EEOC recognized this difference in its now-suspended policy approving knowing and voluntary retroactive releases of claims while disapproving such releases with respect to prospective rights. See 29 C.F.R. § 1627.16(c)(1), suspended by Appropriations Act of 1989, Pub.L. No. 100-459, Title V, 102 Stat. 2216 (1988).
. We note that the digression in the dissent on the standard which should govern procedural waivers justified "in the interest of complete expression of [the] dissenting views," dissenting opinion at 241, has nothing to do with the issue before us. Such an excursion will, at most, interest the law review commentators, but we fail to see that it serves any other purpose in the present case.