Court Opinion

ID: 9494291
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:34:16.903687+00
Date Added: 2024-06-11T17:56:19.635201
License: Public Domain

VIETOR, Senior District Judge,
dissenting.
I respectfully dissent.
I believe public policy was violated by Circuit City when it placed in the arbitration agreement the extreme limitation on punitive damages.10 The limit takes away all but $5,000 of the $300,000 maximum recovery available under Title VII. The Missouri Human Rights Act contains no limit on punitive damages. Circuit City’s counsel conceded at oral argument that job applicants are not told that the punitive damages limitation is far less than the amount recoverable under the law.
The neár-eradication of substantive recovery rights enacted by Congress and the Missouri legislature is, in my judgment, unconscionable. I think the Eleventh Circuit got it right in Perez v. Globe Airport Security Services, Inc., 253 F.3d 1280 (11th Cir.2001), a decision with which the majority, in footnote 8, disagrees. The Perez court stated: “An arbitration agreement containing provisions that defeat a *684federal statute’s remedial purpose is ... not enforceable.” Id. at 1287. An attempt by the employer to defeat the remedial purpose of Title VII taints the entire agreement, making it unenforceable. Id. For reasons expressed by the appellee in this case and by the Eleventh Circuit in Perez at 1287, severance of the offending provision and enforcement of the remainder of the agreement is not an appropriate resolution.
The majority expresses concern that “if we were to hold entire arbitration agreements unenforceable every time a particular term is held invalid, it would discourage parties from forming contracts under the FAA and severely chill parties from structuring their contracts in the most efficient manner for fear that minor terms eventually could be used to undermine the validity of the entire contract.” I do not think So. An affirmance in this case would not send a message that entire arbitration agreements would be unenforceable “every time a particular term is held invalid” and would not engender a fear that “minor terms eventually could be used to undermine the validity of the entire contract.” This case does not involve a procedural provision or a minor term of any sort. It involves a term that guts a major substantive remedy that Congress and the Missouri legislature chose to provide to employees. It is a term that seeks to drastically change the substantive law (in favor of the employer) that is to be applied in the arbitration process. That definitely is not minor.
I would affirm.

. The agreement to arbitrate was crafted by Circuit City, not by the parties. Ms. Gannon played no part in drafting the agreement. It was presented to her on a take-it-or-leave-it basis as a condition of gaining employment with Circuit City. She either signed or she did not get the job. Circuit City's job application form provided to Ms. Gannon clearly states: "Circuit City will not consider your application unless [the Dispute Resolution Agreement] is signed.”