Court Opinion

ID: 4677267
Source: CourtListenerOpinion
Date Created: 2021-04-14 17:00:43.587473+00
Date Added: 2024-06-11T08:03:37.289049
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

SHANNON ZOLLER,                         No. 20-15595
                  Plaintiff-Appellee,
                                           D.C. No.
                v.                      4:19-cv-04804-
                                             JST
GCA ADVISORS, LLC; ROBERT
HOFEDITZ; JONATHAN JAMESON;
REIDAN CRUZ; DANIEL VEATCH,               OPINION
            Defendants-Appellants,

               and

GCA CORPORATION,
                         Defendant.

     Appeal from the United States District Court
       for the Northern District of California
       Jon S. Tigar, District Judge, Presiding

       Argued and Submitted January 12, 2021
             San Francisco, California

                Filed April 14, 2021
2                  ZOLLER V. GCA ADVISORS

    Before: J. Clifford Wallace and Milan D. Smith, Jr.,
        Circuit Judges, and Jane A. Restani, * Judge.

                   Opinion by Judge Wallace

                          SUMMARY **

                            Arbitration

    The panel reversed the district court denial of
defendants’ motion to compel arbitration of statutory
employment discrimination and civil rights claims, and
remanded with the direction that all claims be sent to
arbitration and the case be dismissed without prejudice.

    When Shannon Zoller became an investment banker
with GCA Advisors, LLC, she signed an employment
contract that included an arbitration agreement, and she also
signed a Form U4, as required by the Financial Industry
Regulatory Authority. GCA later fired her, and she brought
an action alleging various contract claims, as well as
statutory claims under the Equal Pay Act, California’s Fair
Pay Act, California’s Fair Employment and Housing Act,
and the Civil Rights Act of 1871. The parties stipulated to
arbitrate some of Zoller’s claims, but the district court denied
GCA’s motion to compel arbitration of the statutory
employment discrimination and civil rights claims because

    *
      The Honorable Jane A. Restani, Judge for the United States Court
of International Trade, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
                 ZOLLER V. GCA ADVISORS                     3

it held that Zoller did not knowingly waive her right to
pursue these claims in court.

    The panel stated that, under Gilmer v. Interstate/Johnson
Lane Corp., 500 U.S. 20 (1991), while not all statutory
claims may be appropriate for arbitration, if a party agreed
to arbitrate, the party will be held to that agreement unless
the party can prove a congressional intent to preclude a
waiver of judicial remedies for the statutory rights at issue.
Zoller, therefore, carried the burden to show such an
intention. Prudential Ins. Co. of Am. v. Lai, 42 F.3d 1299
(9th Cir. 1994), extended Gilmer to Title VII claims and held
that there must be at least a knowing agreement to arbitrate
employment disputes before an employee may be deemed to
have waived judicial remedies.

    The panel assumed, without deciding, that this knowing
waiver requirement remained good law and was applicable
to the statutes at issue. The panel concluded that the
arbitration agreement included clear language encompassing
employment disputes, and the evidence showed that Zoller
knowingly waived her right to a judicial forum to resolve her
statutory claims. Accordingly, the panel reversed the district
court’s denial of GCA’s motion to compel arbitration of
these claims.

                        COUNSEL

Derek L. Shaffer (argued), Quinn Emanuel Urquhart &
Sullivan LLP, Washington, D.C.; Diane Doolittle, Kevin
P.B. Johnson, and Brian C. Cannon, Quinn Emanuel
Urquhart & Sullivan LLP, Redwood City, California; for
Defendants-Appellants.
4               ZOLLER V. GCA ADVISORS

Michael Rubin (argued), Altshuler Berzon LLP, San
Francisco, California; Peter Rukin, Rukin Hyland & Riggin
LLP, Oakland, California; Linda D. Friedman and Matthew
J. Singer, Stowell & Friedman Ltd., Chicago, Illinois; for
Plaintiff-Appellee.

                        OPINION

WALLACE, Circuit Judge:

    Shannon Zoller is a former corporate attorney who
became an investment banker with GCA Advisors, LLC
(GCA) in March 2014. As part of her contract, Zoller signed
an agreement that set her compensation and benefits, as well
as provided that all disputes arising from her employment
would be resolved through binding arbitration. Zoller also
signed a second document that specified the arbitration
procedures. Zoller committed to “final and binding
arbitration” of

       [A]ny controversy or claim relating to or
       arising out of [her] employment with the
       Company, the termination of [her]
       employment,       the    Letter   Agreement
       governing [her] employment with the
       Company        or    its   enforcement   or
       interpretation, or because of an alleged
       breach, default, or misrepresentation in
       connection with the Letter Agreement’s
       provisions.
                   ZOLLER V. GCA ADVISORS                             5

    Zoller also signed a Form U4, as required by FINRA. 1
The form contained an arbitration provision where she
agreed to “arbitrate any dispute, claim or controversy that
may arise between [her] and [GSA] . . . that is required to be
arbitrated under the rules, constitutions, or by-laws” of the
self-regulatory organizations, including FINRA. Zoller
received a FINRA Rule 2263 disclosure specifying that a
“claim alleging employment discrimination, including a
sexual harassment claim, in violation of a statute is not
required to be arbitrated under FINRA rules. Such a claim
may be arbitrated at FINRA only if the parties have agreed
to arbitrate it, either before or after the dispute arose.”
FINRA Rule 13201 also states that if the parties agreed to
arbitrate statutory employment discrimination claims, “the
claim will be administered under Rule 13802.” FINRA Rule
13802 also clarifies that it “applies to arbitrations involving
a claim of statutory employment discrimination as defined
in Rule 13100(bb).”

    In July 2016, GCA fired Zoller. Despite the arbitration
agreement, Zoller brought an action in federal district court
alleging various contract claims, as well as claims of gender
discrimination, denial of equal pay, a conspiracy to violate
her civil rights, and a failure to prevent that conspiracy.
Zoller and GCA filed a joint stipulation to arbitrate some of
her claims, but she refused to arbitrate statutory claims.
Zoller has contended that the following statutory claims
should be considered by the judiciary rather than an
arbitrator: (1) Equal Pay Act claim, pursuant to 29 U.S.C.
§ 206(d)(1), 216(b); (2) Fair Pay Act claim, pursuant to Cal.

    1
        FINRA is the Financial Industry Regulatory Authority, an
independent nongovernmental organization that writes and enforces the
rules governing registered brokers and broker-dealer firms in the United
States.
6                 ZOLLER V. GCA ADVISORS

Labor Code § 1197.5; (3) Fair Employment and Housing Act
claim, pursuant to Cal. Government Code § 12940(a); and
(4) Civil Rights Act of 1871 claims, pursuant to 42 U.S.C.
§§ 1985(3), 1986. GCA moved to compel arbitration. The
district court denied GCA’s motion to compel because it
held that Zoller did not knowingly waive her right to pursue
these claims in court. GCA appeals from the district court’s
denial of its motion to compel arbitration.

    We have jurisdiction pursuant to 9 U.S.C. § 16. We
review the district court’s denial of the motion to compel
arbitration de novo. See Davis v. Nordstrom, Inc., 755 F.3d
1089, 1091 (9th Cir. 2014). The district court’s factual
findings are reviewed for clear error, unless no facts are in
dispute, in which case our entire review is de novo. Id.
Determinations of arbitrability are also reviewed de novo.
Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 719 (9th Cir.
1999) (observing that the “standard for demonstrating
arbitrability is not high . . . . [so that] district courts [must]
direct the parties to procced to arbitration on issues as to
which an arbitration agreement has been signed”). We
reverse the district court’s denial and remand with
instructions to send Zoller’s statutory claims to arbitration.

                                I.

    The Federal Arbitration Act (the Act) governs arbitration
agreements in contracts evincing “a transaction involving
commerce.” 9 U.S.C. § 2. The Act declares a “liberal
federal policy favoring arbitration” and provides that such
agreements “shall be valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for the
revocation of any contract.” AT&T Mobility LLC v.
Concepcion, 563 U.S. 333, 339 (2011) (citation and
quotation marks omitted); see also Mitsubishi Motors Corp.
v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 631 (1985)
                 ZOLLER V. GCA ADVISORS                       7

(holding that the Act emphatically favors arbitration).
Generally, a court must determine two issues before
deciding whether to compel arbitration: (1) whether there is
an agreement to arbitrate between the parties; and
(2) whether the agreement covers the dispute. Howsam v.
Dean Witter Reynolds, Inc., 537 U.S. 79, 84 (2002); Chiron
Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130
(9th Cir. 2000). Zoller bears the burden of proving that her
statutory employment discrimination and civil rights claims
are not suitable for arbitration. Green Tree Fin. Corp.-Ala.
v. Randolph, 531 U.S. 79, 91–92 (2000).

    Zoller and GCA agree that the arbitration agreement is
valid and enforceable as it pertains to Zoller’s non-statutory
claims. However, Zoller argues that her statutory claims are
not within the scope of the agreement, or, in the alternative,
that she did not knowingly waive judicial determination of
these statutory claims. The knowing waiver doctrine is our
judicially created requirement that narrows the Act’s scope
when other federal statutes explicitly limit the enforcement
of arbitration agreements. The standard requires a party to
an arbitration agreement to waive knowingly and explicitly
their right to judicial determination of their Title VII claims.
See Nelson v. Cyprus Bagdad Copper Corp., 119 F.3d 756,
762 (9th Cir. 1997); Renteria v. Prudential Ins. Co. of
America, 113 F.3d 1104 (9th Cir. 1997); Prudential Ins. Co.
of America v. Lai, 42 F.3d 1299 (9th Cir. 1994).

    The Supreme Court has held that, while not all statutory
claims may be appropriate for arbitration, if a party agreed
to arbitration, the party will be held to that agreement unless
the party could prove a congressional intent to preclude a
waiver of judicial remedies for the statutory rights at issue.
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26
(1991) (citations omitted). Zoller, therefore, carries the
8               ZOLLER V. GCA ADVISORS

burden to show such an intention, which would be
discoverable in the text of the statutes creating her private
right of action, the respective legislative histories, or an
“inherent conflict” between arbitration and the statutes’
underlying purposes. Id. (citation and quotation marks
omitted). But see E.E.O.C. v. Luce, Forward, Hamilton &
Scripps, 345 F.3d 742, 752–53 (9th Cir. 2003) (en banc)
(holding that we were precluded from considering the
legislative history of section 118 of the Civil Rights Act of
1991 to determine whether compulsory arbitration was
precluded because the statute’s text is unambiguous). We
have been directed to keep in mind the federal policy
favoring arbitration throughout the inquiry and to avoid
generalized attacks on arbitration. Gilmer, 500 U.S. at 26,
30.

    We extended the Gilmer holding to Title VII claims.
Mago v. Shearson Lehman Hutton Inc., 956 F.2d 932, 935
(9th Cir. 1992). We have interpreted Gilmer to stand for the
proposition that “individuals may contractually agree to
arbitrate employment disputes and thereby waive the
statutory rights to which they would otherwise be entitled.”
Lai, 42 F.3d at 1303 (citation omitted). We also added our
interpretation in Lai. We held that

       Congress intended there to be at least a
       knowing agreement to arbitrate employment
       disputes before an employee may be deemed
       to have waived the comprehensive statutory
       rights, remedies and procedural protections
       prescribed in Title VII and related state
       statutes. Such congressional intent, which
       has been noted in other judicial decisions, is
       apparent from the text and legislative history
       of Title VII.
                 ZOLLER V. GCA ADVISORS                       9

Id. at 1304 (analyzing the Age Discrimination in
Employment Act of 1967, as well as Section 118 of the Civil
Rights Act of 1991 because it amended several sections of
Title VII) (emphasis added); see also § 118 of Pub. L. 102–
166, set forth in the notes following 42 U.S.C. § 1981
(Supp.1994) (“Where appropriate and to the extent
authorized by law, the use of alternative means of dispute
resolutions including, . . . arbitration, is encouraged to
resolve disputes arising under the Acts or provisions of
Federal law amended by this title.”); Statement of the
President of the United States, Signing Ceremony, Pub. L.
No. 102–166 (Nov. 21, 1991), reprinted in 1991
U.S.C.C.A.N. 768, 769; Cong. Rec. S. 15472, S. 15478
(Daily Ed. October 30, 1991, statement of Senator Dole)
(declaring that arbitration provisions are valid only “where
the parties knowingly and voluntarily elect to use these
methods.”) (emphasis added).

    We reasoned in Lai that these congressional concerns
that “Title VII disputes be arbitrated only ‘where
appropriate,’ and only when such a procedure was
knowingly accepted, reflects our public policy of protecting
victims of sexual discrimination and harassment through the
provisions of Title VII and analogous state statutes. . . . This
is a policy that is at least as strong as our public policy in
favor of arbitration.” Lai, 42 F.3d at 1305. We concluded
that “a Title VII plaintiff may only be forced to forego her
statutory remedies and arbitrate her claims if she has
knowingly agreed to submit such disputes to arbitration.” Id.

    After establishing the knowing waiver requirement, we
held that Lai and Viernes could not have understood that
signing the U4 form included an agreement to arbitrate
sexual discrimination actions because the form did not
describe the types of actions subject to arbitration. Id. We
10               ZOLLER V. GCA ADVISORS

also observed that, even if Lai and Viernes had signed a
contract containing the NASD arbitration clause, it would
not have provided them with the requisite notice because the
provision did not refer to employment disputes. Id. We also
remarked that it was noteworthy that Lai and Viernes were
directed to sign the U4 form in a specific place without being
given an opportunity to read the form, and they were not
provided a copy of the NASD Manual that contained the
actual terms of the arbitration agreement. Id. at 1301.

    We narrowed Lai’s holding in Renteria and explained
that the knowing waiver requirement “applies only to a
comparatively small class of claims arising under Title VII
or similar laws—and derives from a recognition of the
importance of the federal policy of protecting the victims of
discrimination. Accordingly, Lai would have no bearing on
various other classes of claims[.]” Renteria, 113 F.3d at
1107.     In Nelson, we applied the knowing waiver
requirement to the Americans with Disabilities Act because
the parties agreed it applied. 119 F.3d at 761. We did not
conduct the same statutory analysis or review of the
legislative history in our determination that the requirement
applied because we held that the statutory language was
analogous to Title VII’s language. Id. at 761 n. 9. We
concluded that Nelson did not knowingly waive his right to
judicial consideration of his claims pursuant to the
Americans with          Disabilities Act       because    the
acknowledgement of receipt of the revised employee
handbook, which contained an arbitration clause, was not a
valid waiver.          Id. at 761–62 (observing the
acknowledgement form only required that he read and
understood the handbook rather than his agreement to be
bound by the provisions therein).
                 ZOLLER V. GCA ADVISORS                     11

    More recently, we held in Ashbey v. Archstone Prop.
Mgmt., Inc., 785 F.3d 1320, 1324–26 (9th Cir. 2015), that
the knowing waiver requirement applied to Ashbey’s Title
VII statutory claims; nonetheless, we concluded that he had
knowingly waived his right to a judicial forum because he
signed an acknowledgement form that explicitly notified
him of the dispute resolution policy. We observe a tension
between Ashbey and our prior decision in Luce Forward
regarding the proper statutory interpretation method for
Section 118 of the Civil Rights Act of 1991 to determine
whether the standard applies. Compare Ashbey, 785 F.3d
at 1323–24 with Luce Forward, 345 F.3d at 751–53.
Regardless, we need not reach it to resolve this appeal.

                              II.

    The district court here agreed with Zoller that the
knowing waiver standard applies and reasoned that the
agreement’s reference to the FINRA rules indicated the way
arbitration would be conducted rather than the matters
subject to arbitration. The district court applied the standard
to Zoller’s statutory claims based upon decisions from other
district courts within our circuit, and it determined that
Zoller’s claims are analogous to other circumstances in
which we have held that a knowing and express waiver is
required. However, the district court did not conduct a
statutory analysis or legislative history review of the
implicated statutes as we did in Lai and Renteria to
determine whether the knowing waiver requirement was
available. See Renteria, 113 F.3d at 1105–08 (9th Cir.
1997); Lai, 42 F.3d at 1304–05 (9th Cir. 1994). Rather, the
district court relied on our broad statement in Nelson that
civil rights claims generally should not be compelled to
arbitration unless the knowing waiver requirement is
satisfied. See Nelson, 119 F.3d at 762 (“Any bargain to
12                ZOLLER V. GCA ADVISORS

waive the right to a judicial forum for civil rights claims,
including those covered by the ADA, in exchange for
employment or continued employment must at the least be
express: the choice must be explicitly presented to the
employee and the employee must explicitly agree to waive
the specific right in question”).

    While GCA challenges the district court’s application of
the knowing waiver standard to Zoller’s claims and the
validity of the knowing waiver requirement, we do not reach
these issues. We assume, without deciding, that the knowing
waiver requirement remains good law and is applicable to
these statutes despite the district court’s failure to utilize the
proper analysis to establish that the standard applies to these
statutory claims. Instead, we hold that this appeal is resolved
on the arbitration agreement’s clear language encompassing
employment disputes and evidence that Zoller knowingly
waived her right to a judicial forum to resolve her statutory
claims.

    Ultimately, the facts here are easily distinguishable from
our prior decisions holding that a plaintiff did not knowingly
waive judicial consideration.         Both the employment
agreement and the confidentiality, non-solicitation and
arbitration agreement included explicit language regarding
employment disputes so that Zoller’s statutory claims are
clearly encompassed by the agreement. See Gilmer,
500 U.S. at 20, 23. The clear terms of the arbitration
provisions also state that the enforcement or interpretation of
the Letter Agreement “shall be exclusively settled by final
and binding arbitration[.]” In addition, the circumstances
surrounding Zoller’s review and acceptance of the
documents, and the documents themselves, are undeniably
different from the circumstances in Lai, Renteria, and
Nelson.
                 ZOLLER V. GCA ADVISORS                       13

    First, Zoller had full access to the various documents
with arbitration provisions and was given “the opportunity
to consult with legal counsel of [her] choice before signing”
both the contract and the employee confidentiality, non-
solicitation and arbitration agreement. Second, Zoller did
not sign acknowledgement of receipt forms or a vague U4
form; she signed and accepted multiple documents with
parallel arbitration provisions that tied arbitration to
employment disputes. Third, the FINRA Rule 2263
disclosure form did not prohibit arbitration of employment
discrimination claims; it merely held that FINRA could
arbitrate these claims if the parties agreed to such arbitration.
Therefore, the district court also erred in holding that the
arbitration agreement’s reference to the FINRA rules related
to the way arbitration would be conducted rather than the
matters subject to arbitration. Furthermore, Zoller’s alleged
subjective misunderstanding of the documents is not
dispositive because our analysis rests on the explicit terms
of the agreement. See Renteria, 113 F.3d at 1108. It is clear
from the terms of these arbitration provisions that
employment discrimination and civil rights claims arising
from her employment are encompassed.

                              III.

    We reverse the district court’s denial of GCA’s motion
to compel arbitration of Zoller’s statutory employment
discrimination and civil rights claims because employment
disputes are encompassed by the arbitration provisions, and
she knowingly waived her right to a judicial forum. We
remand these claims to the district court with the direction
that all claims be sent to arbitration and the case be dismissed
without prejudice.

    REVERSED and REMANDED.