Court Opinion

ID: 9492559
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:44:00.628582+00
Date Added: 2024-06-11T17:55:21.957439
License: Public Domain

Affirmed in part, reversed in part, and remanded by published opinion. Judge NIEMEYER wrote the opinion, in which Judge LEE joined. Judge KING wrote a dissenting opinion.
OPINION
NIEMEYER, Circuit Judge:
This appeal presents the question of first impression in this circuit whether and to what extent the Equal Employment Opportunity Commission (“EEOC”), in prosecuting a suit in its own name, is bound by a private arbitration agreement between the charging party and his employer. Other circuits are split on the proper response to this question. Compare EEOC v. Kidder, Peabody & Co., 156 F.3d 298 (2d Cir.1998) (holding that an arbitration agreement between a charging party and an employer precludes the EEOC from seeking purely monetary relief in federal court on behalf of the charging party but not from seeking broad injunctive relief), with EEOC v. Frank’s Nursery & Crafts, Inc., 177 F.3d 448 (6th Cir.1999) (holding that a private arbitration agreement does not affect the scope of the EEOC’s federal court suit at all).
Recognizing that the EEOC is vested with enforcement authority both to seek broad-based injunctive relief in the public *807interest and to seek “make-whole” relief on behalf of a charging party, we conclude (1) that the EEOC cannot be compelled, by reason of an arbitration agreement between the charging party and his employer, to arbitrate its claims, but (2) that, to the extent that the EEOC seeks to obtain “make-whole” relief on behalf of a charging party who is subject to an arbitration agreement, it is precluded from seeking such relief in a judicial forum. Accordingly, we affirm the district court’s decision to deny Waffle House’s petition to compel arbitration generally and remand to the district court for consideration of the EEOC’s claims in light of this opinion.
I
On June 23, 1994, Eric Baker, who was seeking employment, entered the Waffle House facility located at exit 113 of Interstate 26 in Columbia, South Carolina, and proceeded to fill out and sign an application for employment with Waffle House, Inc. He left blank the space on the application asking what position he sought. The application included a provision requiring the applicant to submit to binding arbitration “any dispute or claim concerning Applicant’s employment with Waffle House, Inc., or any subsidiary or Franchisee of Waffle House, Inc., or the terms, conditions or benefits of such employment.” Although the manager at that Waffle House facility, Lee Motlow, asked Baker whether he wanted the job there, Baker declined and instead, called the manager of a nearby Waffle House facility located at exit 110 of Interstate 26 in West Columbia, to whom Motlow had referred Baker.1 The West Columbia Waffle House manager interviewed Baker and hired him to begin work two weeks later. Baker did not fill in another application and began work in the West Columbia facility on August 10, 1994, as a grill operator.
At his home, approximately two weeks later, Baker suffered a seizure, ostensibly caused by a change in the medication he was taking to control a seizure disorder that had developed as a result of a 1992 automobile accident. The next day, just after arriving for work, Baker suffered another seizure. Waffle House discharged Baker on September 5, 1994, stating in the separation notice that “We decided that for [Baker’s] benefit and safety and Waffle House it would be best he not work any more.”
Baker filed a charge with the EEOC, complaining that his discharge violated the Americans With Disabilities Act of 1990 (“ADA”), and on September 9, 1996, the EEOC filed this enforcement action in its own name against Waffle House pursuant to § 107(a) of the ADA, 42 U.S.C. § 12117(a), and § 102 of the Civil Rights Act of 1991, 42 U.S.C. § 1981a, alleging that Waffle House had engaged in “unlawful employment practices at its West Columbia, South Carolina, facility.” The EEOC stated in its complaint that its purpose for filing the suit was “to correct unlawful employment practices on the basis of disability and to provide appropriate relief to Erie Scott Baker, who was adversely affected by such practices.” It sought as relief (1) a permanent injunction barring Waffle House from engaging in employment practices that discriminate on the basis of disability; (2) an order that Waffle House institute and carry out antidiscrimination policies, practices, and programs to create opportunities and to eradicate the effects of past and present discrimination on the basis of disability; (3) backpay and reinstatement for Baker; (4) compensation for pecuniary and non-*808pecuniary losses suffered by Baker; and (5) punitive damages.
In response to the complaint, Waffle House filed a petition under the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., to compel arbitration and to stay the litigation and, alternatively, to dismiss the action under Federal Rule of Civil Procedure 12(b)(6). The motion was referred to a magistrate judge who — relying on the undisputed record consisting of the complaint, answers to interrogatories, and affidavits filed in connection with the motion to compel arbitration — recommended to the district court that it conclude that Baker had entered into an arbitration agreement with Waffle House and that the EEOC was required to arbitrate the claims it filed on behalf of Baker. The district court, relying on the facts “extrapolated from the pleadings,” disagreed with the magistrate judge’s recommendations and denied each of Waffle House’s motions, concluding that the arbitration provision contained in Baker’s employment application was inapplicable because the West Columbia Waffle House facility, which ultimately hired Baker, had not hired him pursuant to his earlier application submitted at the Columbia Waffle House facility.
Waffle House filed this interlocutory appeal challenging the district court’s denial of its petition to compel arbitration and to stay proceedings. See 9 U.S.C. § 16(a)(1). On appeal, it argues that (1) contrary to the district court’s holding, a valid, enforceable arbitration agreement existed between Baker and Waffle House and (2) its motion to compel arbitration under § 4 of the FAA should be granted because the arbitration agreement between Baker and Waffle House binds the EEOC to “assert Baker’s claim in an arbitral forum.”
II
Because arbitration is a matter of contract, we must first determine whether an enforceable arbitration agreement governed Baker’s employment with Waffle House. See Johnson v. Circuit City Stores, Inc., 148 F.3d 373, 377 (4th Cir.1998). The district court concluded that the arbitration agreement in Baker’s employment application did not govern his employment relationship with Waffle House because it was submitted to the Waffle House facility at exit 113 of Interstate 26 in Columbia, and Baker was not ultimately employed at that facility. When Baker later went to the Waffle House facility at exit 110 of Interstate 26 in West Columbia, he was given a job there without submitting another application. The court thus concluded, “it does not appear that Baker’s acceptance of employment at the West Columbia Waffle House was made pursuant to the written application which included the agreement to arbitrate.”
We disagree with the district court’s analysis because it assumes that the two Waffle House facilities were legally distinct entities in this context. The employment application Baker completed was the standard form application for employment with the corporation Waffle House, Inc., and not with an individual Waffle House facility. Indeed, the manager at the Columbia Waffle House facility referred Baker to the manager at the West Columbia Waffle House facility. In filling out the application, Baker left blank the space provided on the form for listing specific positions applied for, and he specified no intent to limit the application to a particular location. Moreover, when Baker did begin work at the West Columbia facility, he did not fill out another application. It cannot be assumed that a national corporation like Waffle House hired an individual without gathering any of the requisite information, such as his proper name, address, social security number, age and other personal data, qualifications, and references, all of which were contained in the application Baker originally submitted at the Waffle House facility in Columbia.
Accordingly, the fact that Baker was ultimately employed at a different facility *809than the one at which he was physically present when he completed the application is immaterial to the applicability of the arbitration agreement. The generic, corporation-wide employment application completed and signed by Baker, and the arbitration provision it contained, followed Baker to whichever facility of Waffle House hired him. We thus conclude that Baker’s application, when accepted by Waffle House, did form a binding arbitration agreement between Baker and Waffle House.
Having reached that conclusion, however, we must still determine what effect, if any, the binding arbitration agreement between Baker and Waffle House has on the EEOC, which filed this action in its own name both in the public interest and on behalf of Baker.
m
In its motion to compel arbitration, Waffle House sought “to enforce the arbitration agreement between Waffle House and Baker and compel the EEOC, on behalf of Baker, to submit Baker’s employment related dispute with Waffle House to arbitration.” On appeal, it continues to maintain that “[i]t is of no consequence under the FAA that the EEOC is bringing this action on behalf of Baker rather than Baker bringing this action directly” because the EEOC is “bound by Baker’s arbitration agreement with Waffle House.” The EEOC characterizes Waffle House’s argument as “an astounding proposition.” It argues that not only did it “never agree[ ] to arbitrate its statutory claim,” but also that the EEOC “has independent statutory authority to bring suit in any federal district court where venue is proper.” We agree with the EEOC.
In enforcing the federal antidiscrimi-nation laws, the EEOC does not act merely as a proxy for the charging party but rather seeks to “advance the public interest in preventing and remedying employment discrimination.” General Tel. Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318, 331, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980). The EEOC’s independent authority to enforce the ADA is clear.
In enacting the ADA, Congress chose to incorporate the enforcement “powers, remedies, and procedures” of Title VII of the Civil Rights Act of 1964. 42 U.S.C. § 12117(a) (incorporating by reference 42 U.S.C. §§ 2000e-4, -5, -6, -8, -9). These Title VII mechanisms vest the EEOC with broad authority, to enforce, in' federal court, the statute’s ban on disability-based discrimination. See 42 U.S.C. § 2000e-5(f)(1), (f)(3). Under Title VII as originally enacted, the EEOC’s powers were limited to investigation and' conciliation, and Congress relied exclusively on private parties’ suits for enforcement. In 1972, however, seeking to remedy widespread noncompliance under this enforcement system, Congress amended Title VII, according the EEOC the right to file suit in federal court in its own name to eradicate discriminatory employment practices. See General Tel., 446 U.S. at 325-26, 100 S.Ct. 1698. Although the amendments created a dual system of private and government enforcement, we have long recognized that “it was clear that Congress intended by these [1972] Amendments to place primary reliance upon the powers of enforcement to be conferred upon the Commission ... and not upon private law suits, to achieve equal employment opportunity.” EEOC v. General Elec. Co., 532 F.2d 359, 373 (4th Cir.1976) (internal quotation marks and citation omitted).
Because of this public mission, the EEOC cannot be viewed as merely an institutional surrogate for individual victims of discrimination. See General Tel., 446 U.S. at 326, 100 S.Ct. 1698 (holding that “the EEOC’s enforcement suits should not be considered representative actions subject to Rule 23”). “[U]nlike the individual charging party, the EEOC [sues] ‘to vindicate the public interest’ as expressed in the Congressional purpose of eliminating employment discrimination as a national evil rather than for the redress *810of the strictly private interests of the complaining party.” General Elec., 532 F.2d at 373 (quoting EEOC v. Kimberly-Clark Corp., 511 F.2d 1352, 1361 (6th Cir.1975)); see also EEOC v. Harris Chernin, Inc., 10 F.3d 1286, 1291 (7th Cir.1993) (concluding that because the EEOC’s “interests are broader than those of the individuals injured by discrimination ... private litigants cannot adequately represent the government’s interest in enforcing the prohibitions of federal statutes” (citations omitted)); EEOC v. U.S. Steel Corp., 921 F.2d 489, 496 (3d Cir.1990) (observing that “[p]rivate litigation in which the EEOC is not a party cannot preclude the EEOC from maintaining its own action because private litigants are not vested with the authority to represent the EEOC” (citations omitted)); EEOC v. United Parcel Serv., 860 F.2d 372 (10th Cir.1988); EEOC v. Goodyear Aerospace Corp., 813 F.2d 1539 (9th Cir.1987).
The statutory structure of Title VII’s enforcement remedies (and therefore those of the ADA) reflects the notion that the scope of the public interest exceeds that of the individual’s interest. In order to preserve the EEOC’s authority to litigate selectively those cases which it believes will have the most significant public impact, a charging party “may not proceed to federal district court until ... the EEOC has made its own determination as to the validity of complainant’s claim and issued a right-to-sue letter.” Davis v. North Carolina Dep’t of Correction, 48 F.3d 134, 138 (4th Cir.1995). And if the EEOC chooses to file suit, the charging party may not bring his own suit; his right is then limited to intervening in the EEOC’s suit. See 42 U.S.C. § 2000e-5(f)(1). In a similar vein, when a private individual brings suit, the court may, under certain circumstances, permit the EEOC to intervene to protect the national interest. See id. In addition, once the EEOC decides to sue in its’ own name, it is not limited to the facts presented in the charge. Rather, the EEOC may sue based on “[a]ny violations that [it] ascertains in the course of a reasonable investigation of the charging party’s complaint.” General Tel., 446 U.S. at 331, 100 S.Ct. 1698; see also General Elec., 532 F.2d at 370. Finally, the EEOC’s independent interest is also reflected in the fact that a charging party may not withdraw his charge without the consent of the EEOC. See 29 C.F.R. § 1601.10.
Even while empowering the EEOC to sue on a charge independently, Congress preserved the individual’s private remedies under Title VII, indicating that private suits are still appropriate to redress individuals’ grievances. And even when the EEOC has determined to bring suit in its own name, the charging party retains “the right to intervene in a civil action brought by the Commission” if the individual believes that the EEOC will not adequately represent his interests as it pursues its public objectives. See 42 U.S.C. § 2000e-5(f)(1); compare 29 U.S.C. § 626(c)(1) (terminating an individual’s right to sue under the ADEA upon the EEOC’s commencement of an action to enforce that individual’s rights).2 Congress anticipated that the EEOC would not always be able to achieve the best possible result for each individual while at the same time pursuing its mission to vindicate the public interest. See General Tel., 446 U.S. at 331, 100 S.Ct. 1698 (noting that the EEOC “is authorized to ... obtain the most satisfactory overall relief even though competing interests are involved” and that it must make “the hard choices where conflicts of interest exist”).
In short, under the 1972 amendments to Title VII, which are incorporated into the ADA, Congress has created a dual enforcement system, reflecting the notion *811that the EEOC and the charging party are not interchangeable plaintiffs. Each has its own distinct, albeit overlapping, interests for which overlapping remedies are provided. Thus, in pursuing the inquiry into whether the EEOC can be compelled to arbitrate on the basis of an arbitration agreement binding the charging party, we do not take the EEOC as a surrogate for the charging party, subrogated to his interest. Rather, we examine the related, but independent, interests of both the EEOC and the charging party to determine how an arbitration agreement signed by the charging party affects the prosecution of a claim by the EEOC.
First, we must recognize that neither the ADA nor Title VII as incorporated therein requires the EEOC to arbitrate. On the contrary, as demonstrated above, the 1972 amendments to Title VII clearly show that Congress intended that the EEOC vindicate the public interest by conciliation and then by suit in federal court. We must also recognize that in this case the EEOC is not a party to any arbitration agreement. See AT & T Technologies, Inc. v. Communications Workers of Am., 475 U.S. 643, 648-49, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986); Arrants v. Buck, 130 F.3d 636, 640 (4th Cir.1997) (explaining that “[e]ven though arbitration has a favored place, there still must be an underlying agreement between the parties to arbitrate” (citation omitted)). Thus, the only argument Waffle House could advance to require the EEOC to arbitrate is that the EEOC’s interest in enforcing the ADA is derivative of Baker’s interest. This argument, however, disregards the EEOC’s independent statutory role as we have outlined it.
In addition, contrary to Waffle House’s claims, neither of the other two circuits that have addressed the question of the impact of a private arbitration agreement on the EEOC’s ability to sue in its own name have concluded that such an agreement permits a court to force the EEOC into arbitration under the FAA. See Frank’s Nursery, 177 F.3d at 462 (observing that “courts may not treat the agreement of a private party to arbitrate her action as the agreement of the EEOC to arbitrate its action”); Kidder, Peabody, 156 F.3d at 301-02 (upholding the district court’s grant of the employer’s motion to dismiss the EEOC’s ADEA suit seeking solely monetary damages but not addressing the issue of compelling the EEOC to arbitrate because the employer did not seek to do so).
Moreover, the Supreme Court has recognized implicitly that the EEOC, acting in its public role, is not bound by private arbitration agreements. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991) (holding that an employee’s private arbitration agreement with her employer precluded her from filing suit against the employer under the ADEA). Although a private arbitration agreement does bar an individual ADEA claimant from asserting her claim in court, it does not prevent her from filing a charge with the EEOC. See id. at 28, 111 S.Ct. 1647. This rule demonstrates the Court’s recognition that the EEOC’s suit can accomplish aims — namely, combating discrimination on a societal level — that an individual’s suit is not equipped, nor perhaps intended, to accomplish. The court also emphasized, in refuting the argument that enforcing arbitration agreements would undercut the statutory scheme, that “it should be remembered that arbitration agreements will not preclude the EEOC from bringing actions seeking class-wide and equitable relief.” Id. at 32, 111 S.Ct. 1647. Thus, it is apparent that the Court did not intend that when an individual who is subject to an arbitration agreement files a charge, the EEOC can only pursue relief in an arbitral forum. To the contrary, the Court appears to have contemplated that arbitration agreements between charging parties and their employers would not infringe on the EEOC’s statu*812tory duty to enforce the antidiscrimination laws in court.
Accordingly, we conclude that Waffle House cannot succeed on its motion to compel the EEOC to arbitrate.
IV
While we have thus observed that the important role of the EEOC in vindicating the public interest in preventing and eradicating workplace discrimination is not to be restricted by arbitration agreements to which it is not a party, its role in vindicating in federal court the individual interests of the charging party implicates the competing federal policy favoring the enforcement of arbitration agreements.
When an individual and an employer agree to submit employment disputes to arbitration, it is the federal policy to give that contract effect in order to favor the arbitration mechanism for dispute resolution. See 9 U.S.C. § 2; Moses H. Cone Mem’l. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). To permit the EEOC to prosecute in court Baker’s individual claim — the resolution of which he had earlier committed by contract to the arbitral forum— would significantly trample this strong policy favoring arbitration. Because Baker’s own suit in court to enforce his ADA claim would be barred by his contract and by the federal policy embodied in the FAA, only a stronger, competing policy could justify allowing the EEOC to do for Baker what Baker could not have done himself. The EEOC’s public mission to eradicate and to prevent discrimination may be such a policy in certain contexts, see Gilmer, 500 U.S. at 28, 111 S.Ct. 1647, but, as we conclude herein, it cannot outweigh the policy favoring arbitration when the EEOC seeks relief specific to the charging party who assented to arbitrate his claims. Although the EEOC acts in the public interest, even when enforcing only the charging party’s claim, cf. Albemarle Paper Co. v. Moody, 422 U.S. 405, 417-18, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975), the public interest aspect of such a claim is less significant than an EEOC suit seeking large-scale injunc-tive relief to attack discrimination more generally.
Recognizing these competing policies, we agree with the balance struck by the Second Circuit, which held that although the EEOC “may seek injunctive relief in the federal forum for employees even when those employees have entered into binding arbitration agreements,” it may not pursue relief in court — in that case, monetary relief — specific to individuals who have waived their right to a judicial forum by signing an arbitration agreement. Kidder, Peabody, 156 F.3d at 302-03; but see Frank’s Nursery, 177 F.3d at 459-67 (holding that neither the FAA nor principles of preclusion or waiver could operate to bar the EEOC from seeking monetary relief on behalf of aggrieved individuals). When the EEOC seeks “make-whole” relief for a charging party, the federal policy favoring enforcement of private arbitration agreements outweighs the EEOC’s right to proceed in federal court because in that circumstance, the EEOC’s public interest is minimal, as the EEOC seeks primarily to vindicate private, rather than public, interests. On the other hand, when the EEOC is pursuing large-scale injunctive relief, the balance tips in favor of EEOC enforcement efforts in federal court because the public interest dominates the EEOC’s action.
Thus, we hold that to the extent that the EEOC seeks “a permanent injunction enjoining [Waffle House] from discharging individuals and engaging in any other employment practice which discriminates on the basis of disability” and an order to Waffle House “to institute and carry out policies, practices, and programs which provide equal employment opportunities for qualified individuals with disabilities, and which eradicate the effects of its past and present unlawful employment practices,” the EEOC is pursuing the public interest in a discrimination-free work*813place, and it must be allowed to do so in federal court, as authorized by the ADA, notwithstanding the charging party’s agreement to arbitrate. In seeking to “vindicate rights belonging to the United States as sovereign,” EEOC v. Goodyear Aerospace Corp., 813 F.2d 1539, 1543 (9th Cir.1987) (internal quotation marks and citation omitted), which are not necessarily identical to the interests of the individual charging party, the EEOC’s course of conduct should not be affected by the actions of an individual in entering into a private arbitration agreement. See Part III, supra. In similar contexts where charging parties have been deprived of their right to sue either by settling their claims or having their claims dismissed, courts have nevertheless permitted the EEOC to maintain a suit for injunctive relief. See, e.g., EEOC v. Massey Yardley Chrysler Plymouth, Inc., 117 F.3d 1244, 1253 (11th Cir.1997) (noting that “there would be little point in [the EEOC] having the independent power to sue if it could not obtain relief beyond that fashioned for the individual claimant”); EEOC v. Harris Chernin, Inc., 10 F.3d 1286, 1291-92 (7th Cir.1993); Goodyear Aerospace, 813 F.2d at 1542-45.
Conversely, however, in these same contexts some of the same courts have recognized that a charging party’s actions that impede his own right to sue can also circumscribe the contours of the EEOC’s suit in its own name to the extent that it acts on behalf of the charging party. See, e.g., Goodyear Aerospace, 813 F.2d at 1543 (holding that the charging party’s acceptance of a personal settlement of her claims rendered moot the EEOC’s claims for backpay on her behalf); EEOC v. U.S. Steel Corp., 921 F.2d 489, 496 (3d Cir.1990) (holding that the doctrine of res judicata barred the EEOC from seeking “individualized benefits” under the ADEA on behalf of individuals whose own suits were unsuccessful because the EEOC was “in privity” with those individuals); Harris Chernin, 10 F.3d at 1291 (following U.S. Steel’s reasoning with regard to the EEOC’s claim for backpay, liquidated damages, and reinstatement for an individual whose suit was dismissed as barred by the statute of limitations).
Similarly, we also hold that when the EEOC enforces the individual rights of Baker by seeking backpay, reinstatement, and compensatory and punitive damages, it must recognize Baker’s prior agreement to adjudicate those rights in the arbitral forum. Because the EEOC maintains that it “has no intention” of pursuing a claim in arbitration, we do not reach the question of whether the EEOC is authorized to do so. But it cannot pursue Baker’s individual remedies in court, although it may seek broad injunctive relief in its public enforcement role.
Accordingly, we affirm the district court’s order to the extent that it denied Waffle House’s motions to compel the EEOC to arbitrate and to dismiss this action. We reverse its ruling that the EEOC may prosecute Baker’s individual claims in court. And we remand with instructions to the district court to dismiss, without prejudice, the EEOC’s claims asserted on behalf of Baker individually and to permit the EEOC to move forward on its claims for broad injunctive relief.3

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

. In its answers to interrogatories, the EEOC stated more particularly: "Shortly after he had spoken with Motlow, Baker called the Manager at the Waffle House to which Mot-low had referred him. The Manager interviewed Baker and hired him to work in another nearby Waffle House, Unit # 446 in West Columbia. Baker visited Unit # 446 and spoke with the Manager, Mike Bradley. They agreed that Baker would start two weeks later.” J.A. at 13.

. In concluding that this "distinctive enforcement scheme of the ADEA” illustrates the EEOC's "representative responsibilities when it initiates litigation to enforce an employee's rights,” the Third Circuit expressly noted that the enforcement scheme of Title VII "from which the framers of the ADEA consciously departed ... has no similar feature.” U.S. Steel, 921 F.2d at 494 & n. 4.

. Waffle House argues that the EEOC is not entitled to broad injunctive relief because its claim relies exclusively on the incident involving Baker. We leave to the district court the question of whether the EEOC has pled sufficient facts to warrant the equitable relief it seeks. See 42 U.S.C. § 2000e-5(g)(1).