Opinion ID: 3010745
Heading Depth: 3
Heading Rank: 1

Heading: Gilmer and the ADEA

Text: An argument much like that of Seus and the EEOC was made to the Supreme Court in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991), a case that involved an ADEA claim and a Form U-4 agreement between an employee of a brokerage firm and the New York Stock Exchange. Plaintiff Gilmer was required to register with several stock exchanges, including the New York Stock Exchange (NYSE), as a condition of his employment. To do so, he executed a Form U-4 application containing the same language regarding arbitration as the Form U-4 6 signed by Seus except that his commitment was to arbitrate in accordance with the rules of the NYSE. The NYSE Rules in place at the time Gilmer signed his Form U-4 explicitly provided for the arbitration of any controversy between a registered representative and a NYSE member  `arising out of the employment or termination of employment of such registered representative.'  Id. (quoting NYSE Rule 347). Following Gilmer's termination at age 62, he filed an age discrimination charge with the EEOC and thereafter filed suit against his employer. In response to the employer's insistence that his claim be arbitrated, Gilmer argued that enforcement of the Form U-4 agreement to arbitrate would be inconsistent with the ADEA. The Supreme Court began its analysis by making it clear that exceptions to the FAA's rule requiring enforcement of agreements to arbitrate are not to be recognized lightly. Because of the strong federal policy favoring arbitration, any exception must be founded on clear indicia of congressional intent: [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. In this regard, we note that the burden is on Gilmer to show that Congress intended to preclude a waiver of a judicial forum for ADEA claims. If such an intention exists, it will be discoverable in the text of the ADEA, its legislative history, or an inherent conflict between arbitration and the ADEA's underlying purposes. Throughout such an inquiry, it should be kept in mind that questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration. Id., at 26 (citations omitted). Gilmer conceded that nothing in the text or legislative history of the ADEA explicitly precluded enforcement of the FAA in his situation. Rather, he argued that compulsory arbitration of ADEA claims pursuant to arbitration agreements would be inconsistent with the statutory framework and purposes of the ADEA. Id. at 27. The Supreme Court perceived no such inconsistency. 7 The Court held that the FAA required enforcement of Gilmer's agreement to arbitrate all claims arising out of his termination of employment, including his ADEA claim. It stressed that [b]y agreeing to arbitrate a statutory claim, a party does not forego the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial form.. Id. at 26 (quoting from Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1987)) (alteration in original). Rejecting Gilmer's argument that the arbitral process was less suited than litigation to the effective enforcement of the ADEA, the Court concluded: [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. Id. at 28 (quoting from Mitsubishi, supra, at 637) (alterations in original). The Court in Gilmer also addressed and rejected an argument that agreements to arbitrate ADEA claims should not be enforced because of the disparity in bargaining power between an employee and her employer. In the course of rejecting the argument, the Court stressed that courts should look solely to the provisions of the FAA in determining on a case-by-case basis whether an arbitration agreement is binding: Mere inequality in bargaining power, however, is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context. . . [T]he FAA's purpose was to place arbitration agreements on the same footing as other contracts. Thus, arbitration agreements are enforceable save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. S 2.Of course, courts should remain attuned to well-supported claims that the agreement to arbitrate resulted from the sort of fraud or overwhelming economic power that would provide grounds for the revocation of any contract. Mitsubishi, 473 U.S., at 627. There is no indication in this case, however, that Gilmer, an experienced businessman, was coerced or defrauded into agreeing to the arbitration clause in his registration application. 8 As with the claimed procedural inadequacies discussed above, this claim of unequal bargaining power is best left for resolution in specific cases. Id. at 33. Finally, the Gilmer Court rejected an argument based on its prior decision in Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974). Alexander held that an adverse decision in an arbitration proceeding conducted pursuant to an arbitration clause in a collective bargaining agreement could not bar the plaintiff employee from enforcing his rights under Title VII in a federal court. In Gilmer, the Court acknowledged that it had expressed the view in Alexander that arbitration was inferior to the judicial process for resolving statutory claims. Gilmer, 500 U.S. at 34 n.5. It hastened to add, however: That mistrust of the arbitral process, however, has been undermined by our recent arbitration decisions. McMahon, 482 U.S. at 231-32. [W]e are well past the time when judicial suspicion of the desirability of arbitration and of the competence of arbitral tribunals inhibited the development of arbitration as an alternative means of dispute resolution. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626-627 (1985). Id. Thus, the Court specifically disavowed, in the context of Title VII claims as well as ADEA claims, the idea that the arbitral process was inferior to the judicial process. It also stressed that because the arbitration clause in Alexander was contained in a collective bargaining agreement, Alexander had not individually agreed to it, the tension between collective representation and individual statutory rights was an important concern, and the FAA, with its liberal federal policy favoring arbitration, was not applicable. Id. at 35.