Court Opinion

ID: 2672577
Source: CourtListenerOpinion
Date Created: 2014-05-05 18:34:30.023577+00
Date Added: 2024-06-11T09:17:12.095051
License: Public Domain

PUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                              No. 12-2561

ARMAND SANTORO,

                  Plaintiff – Appellant,

           v.

ACCENTURE FEDERAL SERVICES, LLC; ACCENTURE LLP,

                  Defendants – Appellees.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.    Claude M. Hilton, Senior
District Judge. (1:12-cv-00857-CMH-TCB)

Argued:   January 30, 2014                   Decided:   May 5, 2014

Before GREGORY, SHEDD, and KEENAN, Circuit Judges.

Affirmed by published opinion.    Judge Shedd wrote the opinion,
in which Judge Gregory and Judge Keenan joined.

ARGUED: Stephen Z. Chertkof, HELLER, HURON, CHERTKOF, LERNER,
SIMON & SALZMAN, PLLC, Washington, D.C., for Appellant.
Jonathan F. Cohn, SIDLEY AUSTIN LLP, Washington, D.C., for
Appellees.   ON BRIEF: Eric D. McArthur, Paul J. Ray, SIDLEY
AUSTIN LLP, Washington, D.C., for Appellees.
SHEDD, Circuit Judge:

      Dr.    Armand      Santoro       appeals    the    district     court’s     order

granting     the      motion      by     Accenture       Federal      Services,      LLC

(Accenture) to compel arbitration.                   Because we agree with the

district     court       that   the     Dodd-Frank      Wall   Street     Reform     and

Consumer Protection Act of 2010 (Dodd-Frank) does not invalidate

the   arbitration        agreement      between     Accenture       and   Santoro,    we

affirm.

                                           I.

      Santoro began his employment with Accenture in 1997 as a

senior manager.           From 1998 until 2007, Santoro served as the

program     manager      for    the    Internal     Revenue    Service’s     website,

IRS.gov.     From 2007 until September 2011, Santoro served as the

account lead for Accenture’s Department of the Treasury account.

In August 2005, Santoro entered into an employment contract with

Accenture.         The    contract      indicated       that   it   would   renew     on

September 1 of each subsequent year unless either party provided

timely notice that the contract would not be extended.                               The

contract,     among       other       provisions,       included     an   arbitration

clause:

      Any and all disputes arising out of, relating to or in
      connection with this Agreement or your employment by
      Accenture, including, but not limited to, disputes
      relating to the validity, negotiation, execution,
      interpretation, performance or non-performance of the
      Agreement   .  .  . shall    be  finally   settled  by
      arbitration. . . . Arbitrable disputes include without

                                            2
     limitation    employment    and employment    termination
     claims    and     claims     by you    for     employment
     discrimination,     harassment,  retaliation,    wrongful
     termination, or violations under Title VII . . . the
     Age Discrimination in Employment Act.

(J.A. 20).

     In 2010, Santoro was given a new supervisor, who, according

to Santoro’s complaint, “instantly disliked” him.                            (J.A. 11).

In September 2011, Santoro was terminated from his employment as

an   account     executive    as     part       of        a   cost-cutting        measure.

Santoro, who was 66 years old at the time, was replaced by a

younger male employee.

     In response to his termination, Santoro filed a complaint

against    Accenture    in   the   Superior          Court     for   the   District       of

Columbia,    alleging     claims     for       age    discrimination            under    the

District    of   Columbia    Human     Rights        Act.        Accenture       moved    to

compel     arbitration;       Santoro          opposed         Accenture’s         motion,

contending that the clause was void under three whistleblower

provisions     of   Dodd-Frank:    7   U.S.C.         §       26(n)(2),    18    U.S.C.    §

1514A(e)(2), and 12 U.S.C. § 5567(d)(2). 1                        The Superior Court

rejected Santoro’s argument and granted the motion.                             The court

also stayed the case pending arbitration.

     1
       Santoro does not rely on 12 U.S.C. § 5567(d)(2) in this
appeal.

                                           3
       While that motion to compel arbitration was pending with

the Superior Court, Santoro received a right-to-sue letter from

the Equal Employment Opportunity Commission and filed an action

in the Eastern District of Virginia, alleging claims under the

Age   Discrimination      in   Employment          Act      (ADEA),     the   Family   and

Medical Leave Act (FMLA), and the Employee Retirement Income

Security Act (ERISA).          Accenture moved in the district court to

compel arbitration of these federal claims as well.                           Following a

hearing, the district court granted the motion.                         Ruling from the

bench,    the   district       court    concluded           that      Dodd-Frank      “only

applies to certain situations when whistleblowers are involved.”

(J.A. 92).      That is, Dodd-Frank’s provisions “appl[y] only in

the   situations   that    [are]       set       out   by    the   statute,”     and   the

statute only “applies to whistleblowers.”                          (J.A. 90).         Thus,

because Santoro did not bring a Dodd-Frank whistleblower claim,

he could not use Dodd-Frank to invalidate an otherwise valid

arbitration agreement.         Santoro noted a timely appeal.

                                         II.

       On appeal, Santoro contends that the district court erred

in    compelling   arbitration.          We       review     de    novo    the   district

court’s    judgment    compelling            arbitration,          as     well   as     any

questions of state contract law concerning the validity of the

arbitration agreement.          Muriithi v. Shuttle Express, Inc., 712
F.3d 173, 178 (4th Cir. 2013).                    In Santoro’s view, Dodd-Frank

                                             4
invalidates      in    toto    all     arbitration           agreements    by       publicly-

traded     companies 2        that     lack        a    carve-out        for    Dodd-Frank

whistleblower         claims,        even     if       the    plaintiff        is     not   a

whistleblower.         Accenture contends that Dodd-Frank’s scope is

limited to plaintiffs bringing whistleblower claims. 3                               For the

following reasons, we agree with Accenture’s interpretation of

the statute.

                                             A.

     This case involves the intersection of two statutes, the

Federal     Arbitration         Act         (FAA)      and        Dodd-Frank.          “When

interpreting statutes we start with the plain language.”                                U.S.

Dep’t of Labor v. N.C. Growers Ass’n, 377 F.3d 345, 350 (4th

Cir. 2004).       “It is well established that when the statute’s

language    is   plain,       the    sole    function        of    the   courts-at     least

where the disposition required by the text is not absurd-is to

     2
       As relevant here, Dodd-Frank applies only to arbitration
agreements by an “employer” subject to the Commodity Futures
Trading Commission, 7 U.S.C. § 26(h)(1)(A), or a publicly-traded
company and its private subsidiaries, 18 U.S.C. § 1514A.
Accenture does not dispute that it is covered by Dodd-Frank.
For purposes of this opinion, the term “employer” refers to
employers covered by these statutes.
     3
       Accenture asserts two additional grounds for affirmance—
that applying Dodd-Frank in this case amounts to an improper
retroactive application of the Act and that Santoro is
collaterally estopped by the Superior Court’s order compelling
arbitration.   Because we agree with Accenture that Dodd-Frank’s
scope is limited to plaintiffs bringing whistleblower claims, we
have no occasion to address these alternate contentions.

                                              5
enforce it according to its terms.”          Lamie v. U.S. Tr., 540 U.S.
526,   534   (2004)   (internal     quotation    marks    omitted).        “[I]n

looking to the plain meaning, we must consider the context in

which the statutory words are used because ‘[w]e do not . . .

construe statutory phrases in isolation; we read statutes as a

whole.’”     Ayes v. U.S. Dep’t of Veterans Affairs, 473 F.3d 104,

108 (4th Cir. 2006) (quoting United States v. Morton, 467 U.S.
822, 828 (1984)).       See also Smith v. United States, 508 U.S.
223,   233   (1993)   (“Just   as   a   single   word    cannot    be   read   in

isolation, nor can a single provision of a statute.”).                  In sum,

“[w]hen determining whether or not statutory language is plain,

we consider the language itself, the specific context in which

that language is used, and the broader context of the statute as

a whole.”    Lincoln v. Dir., Office of Workers’ Comp. Programs, -

-- F.3d ---, 2014 WL 929367, at *2 (4th Cir. 2014) (internal

quotation marks omitted).

                                        B.

       Congress enacted the FAA in 1925 “in response to widespread

judicial hostility to arbitration agreements.”                AT&T Mobility

LLC v. Concepcion, 131 S. Ct. 1740, 1745 (2011).                   Section 2 of

the FAA provides that arbitration agreements “shall be valid,

irrevocable, and enforceable, save upon such grounds as exist at

law or in equity for the revocation of any contract.”                   9 U.S.C.

§ 2.    The FAA “embodies the national policy favoring arbitration

                                        6
and    places       arbitration         agreements           on   equal        footing       with       all

other contracts.”               Buckeye Check Cashing, Inc. v. Cardegna, 546
U.S. 440,    443       (2006).         It    thus     represents            a   broad      “federal

policy favoring arbitration agreements,” Moses H. Cone Memorial

Hosp.    v.    Mercury          Constr.    Corp.,        460 U.S. 1,       24   (1983),         and

courts must “rigorously enforce arbitration agreements according

to their terms,” Am. Express Co. v. Italian Colors Rest., 133
S. Ct. 2304, 2309 (2013) (internal quotation marks omitted).

       Federal           “statutory       claims        may       be     the       subject        of     an

arbitration agreement, enforceable pursuant to the FAA.”                                          Gilmer

v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991).                                                An

exception       exists,         however,       if       the    “FAA’s      mandate           has       been

overridden by a contrary congressional command.”                                    Italian Colors

Rest., 133 S. Ct. at 2309 (internal quotation marks omitted).

Even then, “[t]he burden is on the party opposing arbitration .

. . to show that Congress intended to preclude a waiver of

judicial       remedies           for     the       statutory            rights         at     issue.”

Shearson/Am. Express, Inc. v. McMahon, 482 U.S. 220, 227 (1987).

       Here,        it     is    undisputed         that       (1)     Santoro’s           employment

contract had an arbitration agreement; and (2) Santoro’s federal

claims fall within the broad “all disputes” language of that

agreement.           Santoro,       however,        seeks         to   avoid       arbitration           by

pointing       to    recent       limitations           on    arbitration           made     by    Dodd-

Frank.        In Santoro’s view, Dodd-Frank represents a “contrary

                                                    7
congressional     command”        that       overrides          the     otherwise      valid

arbitration clause in his employment contract.

                                             C.

       As relevant here, one of the goals of Dodd-Frank was to

strengthen     whistleblower       protections            for    employees       reporting

illegal or fraudulent activity by their employer.                             To this end,

Congress enacted 7 U.S.C. § 26, which amended the Commodities

Exchange Act by adding a provision prohibiting retaliation by a

covered    employer     against          a        “whistleblower.”               7     U.S.C.

§ 26(h)(1)(A).        The   statute          creates      a     cause    of     action   for

whistleblowers, § 26(h)(1)(B)(i), and then protects the cause of

action through § 26(n), which provides:

       (n) Nonenforceability           of certain provisions waiving
       rights and remedies             or requiring arbitration of
       disputes

       (1) Waiver of rights and remedies

       The rights and remedies provided for in this section
       may not be waived by any agreement, policy form, or
       condition of employment including by a predispute
       arbitration agreement.

       (2) Predispute arbitration agreements

       No predispute arbitration agreement shall be valid or
       enforceable, if the agreement requires arbitration of
       a dispute arising under this section.

7 U.S.C. § 26(n).

       In addition to this amendment to the Commodities Exchange

Act,   Dodd-Frank     amended     18     U.S.C.       §   1514A,        which    was    first

enacted   as   part    of   the    Sarbanes-Oxley               Act   of   2002.         This

                                             8
provision is titled “Civil Action to protect against retaliation

in fraud cases,” and the first subsection is expressly labeled

“Whistleblower     protection      for       employees     of    publicly    traded

companies.”      Subsections (b) and (c) create a cause of action

and   remedies   for   violations    of       the    substantive    whistleblower

provision.      The final subsection, § 1514A(e), then mirrors the

language of 7 U.S.C. § 26(n), providing:

      Nonenforceability of certain provisions waiving rights
      and remedies or requiring arbitration of disputes.—

      (1) Waiver of rights and remedies.—The rights and
      remedies provided for in this section may not be
      waived by any agreement, policy form, or condition of
      employment, including by a predispute arbitration
      agreement.

      (2) Predispute arbitration agreements.—No predispute
      arbitration agreement shall be valid or enforceable,
      if the agreement requires arbitration of a dispute
      arising under this section.

18 U.S.C. § 1514A(e).

      Santoro    contends   that     these          provisions    invalidate    all

predispute    arbitration   agreements         lacking    a     Dodd-Frank   carve-

out, even for plaintiffs who are not pursuing any whistleblower

claims.      Under Santoro’s reading of the statute, because his

contract with Accenture does not carve out Dodd-Frank claims

from arbitration and thus “requires arbitration” of such claims,

the entire arbitration agreement is not “valid or enforceable.”

                                         9
                                         D.

      Initially, it is clear that Dodd-Frank prohibits predispute

agreements to arbitrate whistleblower claims.                The Supreme Court

in dicta has pointed to Congress’s language in Dodd-Frank as a

model     of   “clarity”    for    limiting   arbitration,      and    we    agree.

CompuCredit      Corp.     v.    Greenwood,   132 S. Ct. 665,   672      (2012).

Dodd-Frank       works      to     render     “nonenforceabl[e]”            “certain

provisions” that require “arbitration of disputes”                    “under this

section.”       Thus, an agreement to arbitrate whistleblower claims

is not “valid or enforceable.”            This language represents a clear

Congressional command that Dodd-Frank whistleblower claims are

not   subject    to   predispute       arbitration.     It   does     not    follow,

however, that Dodd-Frank likewise prohibits the arbitration of

non-whistleblower claims simply because an arbitration agreement

does not carve-out Dodd-Frank whistleblower claims.                   Instead, we

think the language, context, and enactment of the statute lead

to the opposite conclusion.

      To begin, the statute’s language does not support Santoro’s

reading.       Subsections 4 (1) and (2) both focus on the rights and

remedies       “in    this”      and    “under      this”    “section,”       i.e.,

whistleblower claims, and the prohibition of any provision that

      4
       Citations to subsections (1) and (2) refer to both 7
U.S.C. § 26(n) and 18 U.S.C. § 1514A(e).

                                         10
would waive or limit judicial resolution of those claims, not of

the many variety of claims that may arise during an employment

relationship.        Subsection (1) specifies that the rights under

the statute—the whistleblower cause of action—cannot be “waived”

by   predispute      arbitration.          Subsection            (2)   simply   reiterates

that whistleblowers cannot waive their right to a civil action

in a judicial forum by agreeing to arbitrate.                           Accenture is not

requiring     Santoro    to       arbitrate        a     claim    “arising      under   this

section;”     rather,       it    is    requiring         him     to   arbitrate      claims

arising under other federal statutes pursuant to an otherwise

valid   arbitration      agreement.            Under       Dodd-Frank,       Congress     has

protected the right to bring a whistleblower cause of action in

a judicial forum, nothing more.

      Santoro seeks to unmoor subsection (2) from its placement

in Dodd-Frank and instead apply it as a broad, free-standing

right, creating a windfall for non-whistleblowing employees.                              By

doing   so,    he    overlooks         both        the    limiting      language      within

subsection     (2)    and    the       broader      context       of   the    statute,    in

violation of the “cardinal rule,” that the “statute is to be

read as a whole since the meaning of statutory language, plain

or not, depends on context.” King v. St. Vincent’s Hosp., 502
U.S. 215, 221 (1991) (citations omitted).                         To that end, even if

we   assume   that     the       “ordinary     meaning”          of    the   phrase     “[n]o

predispute arbitration agreement shall be valid” is “expansive,”

                                              11
“its       application   is   limited    by   the   ‘broader    context’   of

[§ 1514A] as a whole.”         Country Vintner of N.C., LLC v. E & J

Gallo Winery, Inc., 718 F.3d 249, 259 (4th Cir. 2013) (quoting

In re Total Realty Mgmt., LLC, 706 F.3d 245, 251 (4th Cir.

2013)).

       Dodd-Frank created causes of action for whistleblowers and

then protected those causes of action by barring their waiver in

“predispute      arbitration    agreements.”        Nothing    in   Dodd-Frank

suggests that Congress sought to bar arbitration of every claim

if the arbitration agreement in question did not exempt Dodd-

Frank claims. 5     Nothing in Dodd-Frank even refers to arbitration

apart from this limited reference in these statutory provisions

that are otherwise concerned solely with the creation of a cause

of action for whistleblowing employees.              To conclude otherwise

would be to forget that “Congress . . . does not alter the

fundamental details of a regulatory scheme in vague terms or

ancillary provisions—it does not one might say, hide elephants

       5
       Santoro notes that Congress has used more circumscribed
language in other statutes that bar claims from being arbitrated
to support his reading of Dodd-Frank.    See, e.g., 12 U.S.C. §
5567(d)(2) (provision of the Consumer Financial Protection Act
that prohibits arbitration agreements only “to the extent that
[they require] arbitration of a dispute arising under this
section”).   The fact that Congress used alternate language in
another statutory context does not persuade us that Congress
intended Dodd-Frank to be as expansive as Santoro suggests, nor
does it mean that Congress cannot make the same point using
different language.

                                        12
in mouseholes.”       Gonzales v. Oregon, 546 U.S. 243, 267 (2006)

(internal quotation marks omitted).                    But that is exactly what

Santoro    requests—concluding           that    in    this    mousehole,        Congress

essentially    grafted      a    new    section    onto   the      FAA    by    requiring

every employer’s arbitration agreement to carve out an exception

for whistleblowers.         Given the statute’s language and context,

Santoro    cannot    meet       his    burden     of   showing      that       Dodd-Frank

represents    a     contrary         congressional      command      overriding       the

validity of arbitration clauses as to non-whistleblower claims.

     Our     conclusion         is    further     buttressed       by     the    context

surrounding the enactment of Dodd-Frank.                      At the time Congress

enacted    these    provisions         of    Dodd-Frank       it    was    legislating

against two background pieces of information.                      First, courts had

consistently held that whistleblower claims under Sarbanes-Oxley

were subject to arbitration.                See Guyden v. Aetna, Inc., 544
F.3d 376, 383-84 (2d. Cir. 2008). 6                    In addition, the Supreme

Court had noted in dicta that “non-waiver of rights” provisions—

like § 26(n)(1) and § 1514A(e)(1) “did not explicitly preclude

     6
       In fact, the first case reaching this conclusion was
decided only a year after Congress enacted Sarbanes-Oxley. Boss
v. Salomon Smith Barney Inc., 263 F. Supp. 2d 684 (S.D.N.Y. 2003).

                                            13
arbitration or other nonjudicial resolution of claims.”                    Gilmer,
500 U.S. at 29. 7

     “Congress is presumed to act with awareness of a judicial

interpretation of a statute.”          Sayyed v. Wolpoff & Abramson, 485
F.3d 226, 231 (4th Cir. 2007).              Thus, in enacting Dodd-Frank,

Congress would have been aware that Sarbanes-Oxley whistleblower

claims were subject to arbitration and that non-waiver of rights

provisions like § 26(n)(1) and § 1514A(e)(1) may not, standing

alone, override the FAA.            This background further supports the

conclusion    that   Dodd-Frank      simply    overrules     Guyden    and    makes

clear—by     supporting    the      non-waiver    of     rights    language     of

subsection (1) with the explicit language of subsection (2)—that

whistleblower claims cannot be subject to predispute agreements

to arbitrate.

     Accordingly,     we    hold    that,     where    the   plaintiff     is   not

pursuing     Dodd-Frank    whistleblower       claims,       neither   7     U.S.C.

§ 26(n)(2),    nor   18    U.S.C.    § 1514A(e)(2)      overrides      the    FAA’s

mandate that arbitration agreements are enforceable. 8                     Because

     7
       In CompuCredit, the Court reiterated that “[i]t takes a
considerable stretch to regard [a] nonwaiver provision as a
‘congressional   command’  that the   FAA  shall  not  apply.”
CompuCredit, 132 S. Ct. at 671.
     8
       In reaching this conclusion, we find ourselves in accord
with the Fifth Circuit. See Holmes v. Air Liquide USA, LLC, 498
Fed. App’x 405, 407 (5th Cir. 2012) (enforcing arbitration
agreement where “[plaintiff] brings no Dodd-Frank claims,” and
(Continued)
                                       14
Santoro is not pursuing a “dispute under this section” Dodd-

Frank does not bar arbitration of Santoro’s federal claims.

                              III.

     For the foregoing reasons, we affirm the district court’s

order compelling arbitration of Santoro’s federal claims.

                                                            AFFIRMED

the “Agreement does not ‘require arbitration of a dispute
arising under’” Dodd-Frank).    Our conclusion likewise comports
with several district courts to have considered the issue, see
Yegin v. BBVA Compass, 2013 WL 622565, *2 (N.D. Ala. Feb. 19,
2013); Rodriguez v. Charles Schwab Corp., 2013 WL 911959, *5
(W.D. Tenn. Jan. 29, 2013), and is consistent with those
decisions concluding that Dodd-Frank does bar arbitration of
covered whistleblower claims, see Wong v. CKX, Inc., 890
F. Supp. 2d 411, 421 (S.D.N.Y. 2012) (noting “whistleblower claims
are no longer arbitrable”); Pezza v. Investors Capital Corp.,
767 F. Supp. 2d 225, 227 (D. Mass. 2011) (noting “Dodd-Frank Act
enacted   a  bar   to   predispute  arbitration  agreements  for
whistleblower claims”).

                               15