Opinion ID: 586393
Heading Depth: 2
Heading Rank: 1

Heading: eppa claims

Text: 11 In denying arbitration to Smith Barney, the district court relied on Nicholson v. CPC Int'l Inc., 877 F.2d 221 (3d Cir.1989). The Third Circuit there held that Congress did not intend that the right to a judicial forum under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-34, could be displaced by arbitration, concluding that ADEA is one of the statutory schemes that present the 'inherent conflict [with] arbitration' referred to 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) ]. Id. at 227. 12 In resolving a conflict between a Fourth Circuit case and the Nicholson case from the Third Circuit, the Supreme Court in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. ----, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991), held that ADEA claims were subject to arbitration, impliedly overruling Nicholson. 111 S.Ct. at 1657. The Court emphasized that the Federal Arbitration Act (FAA) manifests a liberal federal policy favoring arbitration agreements. 111 S.Ct. at 1651 (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)). 13 Similar to Saari's situation here, the plaintiff in Gilmer was required to register as a securities representative with the New York Stock Exchange, and was subject to N.Y.S.E. Rule 347. The Court held that statutory claims may be the subject of an arbitration agreement, enforceable pursuant to the FAA. Id. 111 S.Ct. at 1652. The Court noted 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.'  Id. (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S.Ct. 3346, 3354, 87 L.Ed.2d 444 (1985)). The Court also noted that it had upheld arbitration agreements relating to claims arising under the Sherman Act, the Securities Exchange Act of 1934, RICO, and the Securities Act of 1933. Id. 111 S.Ct. at 1652. 14 The Court recognized that not all statutory claims may be appropriate for arbitration under the FAA, but  '[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). The Court placed the burden on the plaintiff to show that Congress intended to preclude a waiver of a judicial forum for ADEA claims, and noted that if such an intention exists, it would be discoverable in the text of ADEA, its legislative history, or an inherent conflict between arbitration and ADEA's underlying purposes. Id. 15 Saari's reliance on Nicholson in the court below proved to be misplaced. As a substitute, Saari argues that the Court's rationale in Gilmer is specific to ADEA, and is not dispositive of the ability to arbitrate claims under EPPA. Saari attempts, contrary to his arguments in the district court, to distinguish EPPA from ADEA, on the basis of the analysis set forth in Gilmer.
16 Saari notes the statement of the Gilmer Court that ADEA's flexible approach to resolution of claims and the role of the EEOC under ADEA in informal methods of conciliation, conference, and persuasion indicates that out-of-court dispute resolution, such as arbitration, is consistent with the statutory scheme established by Congress. Gilmer, 111 S.Ct. at 1654. Saari contends that the enforcement provisions of EPPA show no such flexibility. 17 Section 2002 of EPPA contains a broad general prohibition of employer use of lie detector tests. The prohibition is subject to exceptions listed in Sections 2006 and 2007 relating to governmental employers, national defense and security, F.B.I. contractors, certain private security firms, and a limited exemption for ongoing investigations. 2 The enforcement provisions in Section 2005 permit an assessment of a civil penalty by the Secretary of Labor in an amount not to exceed $10,000 and injunctive actions by the Secretary to restrain violations of the Act. The redress the Secretary may seek includes orders of employment, reinstatement, promotion, and payment of lost wages and benefits. The enforcement provisions also include a private civil action to be brought by the employee or prospective employee affected by such violation. See 29 U.S.C. § 2005(c). The available relief is identical to that available to the Secretary by injunctive action under Section 2005(b). The enforcement provisions also include a bar on the waiver of rights which provides: 18 The rights and procedures provided by this chapter may not be waived by contract or otherwise, unless such waiver is part of a written settlement agreed to and signed by the parties to the pending action or complaint under this Act. 19 29 U.S.C. § 2005(d). 20 Saari contends that unlike the Gilmer Court's finding of ADEA's flexible approach to the resolution of claims, EPPA relies on the judicial process for the resolution of claims. We think, however, that Saari's reliance on the flexibility comment by the Court in Gilmer is misplaced. The Court made it very clear in Gilmer that the fact that a particular statute embodies a judicial enforcement process does not exclude arbitration. The Supreme Court rejected Saari's argument when it was made by Gilmer: 21 Gilmer also argues that compulsory arbitration is improper because it deprives claimants of the judicial forum provided for by the ADEA. Congress, however, did not explicitly preclude arbitration or other nonjudicial resolution of claims, even in its recent amendments to the ADEA. 22 Gilmer, 111 S.Ct. at 1653-54. 23 The Court went on to note that arbitration is consistent with Congress' grant of concurrent jurisdiction over ADEA claims to state and federal courts because arbitration agreements, like a provision for concurrent jurisdiction, allow claimants a broader right to select a particular forum for resolving disputes, rather than limiting them solely to a judicial forum. Id. at 1654. The provision of a judicial forum for resolution of disputes is not inconsistent with the provisions of the FAA providing for an enforceable right of the parties to contractually agree to resolve those same disputes in an arbitral forum. 24 In addition, it should be noted that EPPA is not completely inflexible in its approach to resolution of employee claims, since either the Secretary or the employee may seek judicial relief, and the Secretary's authority to seek relief on behalf of the employee is textually identical to the employee's right to seek relief directly. Furthermore, even if the violation did not result in harm compensable in money damages or job-related restitution, the Secretary is empowered to impose and collect civil penalties of up to $10,000. Thus, in the broader view of preventing abuse of polygraph testing in the employment arena, the Secretary has a broad arsenal of weapons with which to address problems. The lack of a specific commission, such as the EEOC, to which claims may be addressed in the first instance does not appear to be a compelling distinction between ADEA and EPPA. 25 Saari also argues that the anti-waiver provision of EPPA is different than the acts referred to in Gilmer in that the anti-waiver provision in EPPA provides that the rights and procedures provided by this chapter may not be waived by contract or otherwise.... 29 U.S.C. § 2005(d) (emphasis added). Saari contends that the and procedures language evidenced a legislative intent that the procedures under EPPA were not to be waived. Saari argues that the procedures available under EPPA are solely judicial and therefore arbitration cannot oust him from the judicial arena. 26 Saari's reliance on the and procedures language is unavailing. Saari is arguing that those words make the judicial forum provisions of EPPA exclusive of arbitration. This rationale does not stand in light of Gilmer. In Gilmer, the Court noted that the substantive rights enforced by arbitration are identical to those enforced in a judicial forum, the only difference being an agreement by the parties to submit the resolution in an arbitral, rather than a judicial, forum. Gilmer, 111 S.Ct. at 1652. 27 The term procedures is too broad to relate solely to forum selection. In order for an employer to avail itself of the provisions relating to ongoing investigations in Section 2006(d), 3 it would be required to follow certain procedures. It is the type of procedure found in 2006(d) that an employer may attempt to have a prospective employee waive as a condition of employment, and that the anti-waiver provision would invalidate if extracted from the employee. 28 Furthermore, the and procedures language in EPPA is no stronger than the anti-waiver provisions found in the Sherman Act, the Securities Exchange Act of 1934, the Securities Act of 1933, and RICO. Those acts provide either that the act's provisions may not be waived or that the district court shall have exclusive jurisdiction, which the Court noted in Gilmer has been held not to exclude arbitration. Gilmer, 111 S.Ct. at 1651-1652. 29 Equally unconvincing are Saari's arguments concerning the legislative history of EPPA. Rejection by Congress of an amendment to EPPA which would have exempted the banking and securities industry from the scope of EPPA does not indicate an intention to exclude arbitration as a possible forum.
30 Saari argues that requiring arbitration in his case creates an inherent conflict with EPPA's underlying purposes 4 which rely on the judicial forum as an essential feature of the Act. Saari bases his argument on the enforcement provision of the EPPA which prohibits a waiver of both the rights and procedures available under the EPPA. As stated supra in section I.A., this argument lacks merit. 31 Saari further argues that if he is compelled to arbitration, the panel of arbitrators would be drawn from the securities industry, which would be inimical to the underlying purposes of the EPPA. This argument is without merit. [M]istrust of the arbitral process was clearly rejected as a reason for avoiding arbitration by the Court in Gilmer. Gilmer, 111 S.Ct. at 1656, n. 5. 32 We conclude that Saari's claims under EPPA were subject to arbitration, and therefore the district court erred in denying Smith Barney's motion to compel arbitration and to stay the case pending arbitration.