Opinion ID: 764164
Heading Depth: 3
Heading Rank: 3

Heading: Inapplicability of Waiver Principles

Text: 53 As traditional res judicata and estoppel by election of remedies cannot govern this case, we turn to the district court's implicit reliance, in dismissing the EEOC's claim for relief to make Adams whole, on cases precluding EEOC actions brought on behalf of individuals who have settled their claims or who have waived their own rights to sue under Title VII. See, e.g., EEOC v. Goodyear Aerospace Corp., 813 F.2d 1539, 1543 (9th Cir.1987). Indeed, the Second Circuit recently held that where an individual has freely agreed to arbitrate [his] ADEA claim, that decision, like the decision to waive or settle a claim, prevents the EEOC from pursuing monetary remedies on behalf of the individual in the federal forum. EEOC v. Kidder, Peabody & Co., 156 F.3d 298, 302 (2d Cir.1998). Because we believe that an employee cannot preclude an EEOC suit by waiving her own right to sue under Title VII, we must part company with the Second Circuit to the extent it would bar the EEOC from suing for both monetary and injunctive relief on behalf of such an employee. 54 In Kidder Peabody, the Second Circuit followed those courts that recognize the EEOC's right of action as distinct from that of the aggrieved employee but that hold, on the basis of res judicata, that the EEOC may not seek monetary relief in the name of an employee who has waived, settled, or previously litigated the claim. Id. at 301 & n. 3. In accordance with this conclusion, the Second Circuit, like the district court, determined that while the EEOC was still free to pursue injunctive relief on behalf of an aggrieved individual whose Title VII claim is subject to arbitration, the EEOC could not pursue monetary relief on behalf of such an individual. 55 Aside from placing emphasis on the res judicata decisions in U.S. Steel and Harris Chernin that cannot apply to this case, the Second Circuit relied heavily on the Ninth Circuit's decision in Goodyear. In that case, the Ninth Circuit expressly rejected Goodyear's argument that the interests of the EEOC and the aggrieved individual were identical, and affirmed the right of the EEOC to seek injunctive relief through its action on behalf of that individual. 10 See Goodyear, 813 F.2d at 1542-43. Significantly, the Ninth Circuit did not hold, as a general principle, that the EEOC could not seek monetary relief on behalf of an aggrieved individual who had agreed to settle her discrimination claims. Rather, the court concluded that because the individual in the case before it had received satisfaction of her interests by her private settlement, the EEOC's claim was moot. See id. at 1542. The court further dismissed as moot the EEOC's claim for backpay on that individual's behalf because she freely contracted away her right to back pay through her settlement agreement with Goodyear. Id. at 1543. 56 It is obvious that the present case stands on separate footing. Here, Adams neither received satisfaction of her interests through settlement, nor agreed to give up her right to back pay. While the Second Circuit likened an individual's decision to submit her claim to an arbitral forum to the decision by an individual to settle or waive her claim, we must disagree. Indeed, the Second Circuit and the district court below premised their conclusions on the possibility that individuals who have freely agreed to arbitrate all employment claims could make an end run around the arbitration agreement by having the EEOC pursue back pay or liquidated damages on his or her behalf.... Kidder Peabody, 156 F.3d at 303. As we have explained, while Title VII affords recovery through private action or an action by the EEOC, it does not allow both, and the power to decide which route to follow rests in the hands of the EEOC, not the aggrieved employee. Since the statute does not grant an individual the power to obtain recovery without authorization from the EEOC, such an individual cannot, by making decisions about her own ability to sue for herself, override the power of the EEOC to sue in its own name. 57 Accordingly, we see no reason why the EEOC could not seek monetary remedies in its lawsuit on behalf of an individual who could otherwise have pursued an arbitral remedy, just as it always has when suing on behalf of an individual. See, e.g., EEOC v. Wilson Metal Casket Co., 24 F.3d 836, 842 (6th Cir.1994). As Title VII clearly states, when the EEOC decides to sue and a federal court agrees with the EEOC that the defendant-employer has unlawfully discriminated against a particular individual, the EEOC may obtain both injunctive relief and substantive relief including the reinstatement or hiring of employees, with or without back pay. 42 U.S.C. § 2000e-5(g)(1) (1998). The EEOC may also recover compensatory damages beyond back pay and punitive damages in cases of intentional employment discrimination that violates Title VII. See 42 U.S.C. § 1981a (a)(1) (1998). Thus, while of course, Title VII defendants do not welcome the prospect of backpay and other monetary relief, the law provides for such liability and the EEOC's authority to sue for it. General Telephone, 446 U.S. at 324. 58 Moreover, limiting the EEOC to the pursuit of injunctive and not monetary relief on behalf of aggrieved individuals would severely impede its ability to protect the public interest against unlawful employment discrimination, and would effectively eradicate the efforts of Congress to provide meaningful enforcement powers to the EEOC. As the Court has stated: 59 If employers faced only the prospect of an injunctive order, they would have little incentive to shun practices of dubious legality. It is the reasonably certain prospect of a backpay award that provides the spur or catalyst which causes employers and unions to self-examine and to self-evaluate their employment practices and to endeavor to eliminate, so far as possible, the last vestiges of an unfortunate and ignominious page in this country's history. 60 Albemarle Paper Co. v. Moody, 422 U.S. 405, 417, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). Congress affirmed this notion when it added the remedies of compensatory and punitive damages by enacting the Civil Rights Act of 1991. See Civil Rights Act of 1991, § 2, Pub.L. No. 102-166, 105 Stat. 1071 (1991) (codified at 42 U.S.C. § 1981a (1998)) (finding that additional remedies under Federal law are needed to deter unlawful harassment and intentional discrimination in the workplace). If Congress believed the EEOC could effectively eradicate employment discrimination through injunctive remedies alone, it would not have empowered the EEOC to obtain more. 61 Federal courts are equipped well to account for situations where an aggrieved individual has already received satisfaction of her interests through settlement or through arbitration. See, e.g., EEOC v. Yenkin-Majestic Paint Corp., 112 F.3d 831, 836 (6th Cir.1997) (observing that district courts can exercise broad authority when fashioning appropriate relief under Title VII). Indeed, Title VII charges district courts with the responsibility of determining whether a particular award will aid in ending illegal discrimination and rectifying the harm it causes. Shore v. Federal Express Corp., 777 F.2d 1155, 1159 (6th Cir.1985). Courts retain equitable power to locate a just result when deciding on the kind and amount of relief to award under Title VII. Occidental Life, 432 U.S. at 373. In keeping with this principle, we have recognized that an individual's receipt of an arbitration award or settlement funds may limit the amount of relief that the EEOC may recover on her behalf. See Kimberly-Clark, 511 F.2d at 1361. 62 Where Congress granted the EEOC the broad power to choose which Title VII actions to litigate in order to eliminate unlawful employment discrimination, we cannot sustain the district court's attempt to use FAA, preclusion or waiver principles to treat an EEOC right of action as identical to Adams' private right of action. Were we to endorse the district court's construction of the EEOC's cause of action and of Adams' arbitration agreement, we would permit employees nationwide to contract away the right of the EEOC to enforce Title VII by bringing actions in federal court. Given the unequivocal intent of Congress that the EEOC possess an independent authority to vindicate the public interest by suing in its own name, we decline to reach such an untenable result by affirming the district court's enforcement of Adams' agreement to arbitrate against the EEOC. 63