# Respondents Brief — Gilmer v. Interstate/Johnson Lane Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0001%3A06 ## Record - **Collection:** Supreme Court brief - **Document type:** Respondents Brief - **Published:** January 1, 1991 - **Citation:** 500 U.S. 20 ## Text ___ INTERSTATE/JOHNSON LANE CORPORATION, - On Writ United States Court Of ‘Fourth Circu —+ BRIEF ON THE MERITS FOR RESPONDENT : + *James B. Spears, JR. Rosert S. Puirer HAYNswortH, BALDWIN, JOHNSON & Greaves, P.A. 901 West Trade Street Suite 1050 Charlotte, NC 28202 (704) 342-2588 Attorneys for Respondent “Counsel Oy Reed QUESTION PRESENTED May a court in accordance with the Federal Arbitra- tion Act, 9 U.S.C. §§ 1-15, compel arbitration of an indi- vidual claim of age discrimination brought under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-633a? ii PARTIES AND LIST OF AFFILIATED CORPORATIONS See page ii of Respondent's Brief in Opposition to the Petition. ill TABLE OF CONTENTS Page EEE EE - i Parties and Lists of Affiliated Corporations ........ ii cece cede eecescceccecesesccess Vv Statutory and Other Provisions Involved........... 1 te aes accdcccecesececcees I etek sel ececcteecsecescecsess 3 EGR va cecccceccvcercessesscccses 7 I. THE FAA REQUIRES ENFORCEMENT OF PETI- TIONER’S AGREEMENT TO ARBITRATE BECAUSE CONGRESS HAS NOT EXCEPTED ADEA CLAIMS FROM THE MANDATE OF THE FAA AND SUCH CLAIMS ARE NOT INHER- ENTLY UNSUITABLE FOR ARBITRATION..... 7 A. Petitioner's Arguments That Arbitration Cannot Adequately Resolve His ADEA Claim Are Neither Legally Nor Factually Sufficient To Avoid Arbitration............ 13 1. Petitioner's Policy Arguments About The Adequacy Of Arbitration To Resolve A Statutory Claim Are Not Legally Suffi- cient To Avoid Enforcement Of His eee b ee casuccesccecsceces 13 NN The Arbitral Procedures Applicable To Petitioner's ADEA Claim Provide A Sound And Fair Method For Resolving His Claim On Its Merits............... 17 lV TABLE OF CONTENTS - Continued Page B. Petitioner's Concerns About The Relative Bargaining Powers Of The Parties Are Not A Proper Basis For Denying Arbitration...... 26 C. The Fourth Circuit Correctly Ruled That Arbitration Would Not Conflict With The Statutory Enforcement Scheme Established ee We reas ekntaacdsevenudeuaunedaeos 29 D. Alexander, Barrentine, McDonald And Buell Do Not Preclude Arbitration Of ADEA Si ectakGdaonkchuthrdscvetbecueedvasds 35 E. Summary of Argument .................... 40 ll. THE ARBITRATION AGREEMENT APPLICA- BLE TO PETITIONER’S CLAIMS IS ENFORCE- ABLE UNDER THE FEDERAL ARBITRATION TABLE OF AUTHORITIES Page Cases A. G. Edwards & Son, Inc. v. Smith, 11 Empl. Ben. Coord. (BNA) 2430 (D. Ariz. 1989)................ 45 Alberto-Culver Co. v. Scherk, 484 F.2d 611 (7th Cir. 1973), rew’d, 417 U.S. 506 (1974)................... 17 Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974) passim Alford v. Dean Witter Reynolds, Inc., 905 F.2d 104 al a Wcanduesuuwie dGiaudekeawundenes boas. 40 American Postal Workers Union v. United States Postal Serv., 823 F.2d 466 (11th Cir. 1987).......... 46 Andros Compania Maritima v. Marc Rich & Co., AG., ee ee OE csc eacciduannscdede sans 19 Arnulfo P. Sulit, Inc. v. Dean Witter Reynolds, Inc., ee FS fe | | rere 41 Aspero v. Shearson American Express, Inc., 768 F.2d ee ee OE a al ce dcunda cn cinchetenseebnes 44 Atchison, Topeka and Santa Fe Ry. Co. v. Buell, 480 & J eee eee 35, 36, 37, 38, 39, 41 Barrentine v. Arkansas-Best Freight System, Inc., 450 ee Se Gea acddadacanecaaae a 35, 37, 38, 39, 41 Bernhardt v. Polygraphic Co. of Amer., Inc., 218 F.2d 948 (2d Cir. 1955), rev'd, 350 US. 198 (1956) ...... 49 Brown v. Gilligan, Will & Co., 287 F. Supp. 766 (S.D.N.Y. 1968) Brown v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 666 F. Supp. 969 (5D. Pa. 1967) .............2005. 44 Coenen v. R. W. Pressprich & Co., 453 F.2d 1209 (2d Cir.), cert. denied, 406 U.S. 949 (1972).............. 43 vi TABLE OF AUTHORITIES - Continued Page 587 F. Cullen v. Paine, Webber, Jackson & Curtis, Inc., Supp. 1520 (N.D. Ga. GIDE . ac cccnccsecescceess 28, 44 Dean Witter Reynolds, Inc. v. Byrd, 470 US. — a COND cc ccneancccsuasecsses sesessnsestses , 36, Dickstein v. duPont, 443 F.2d 783 (ist Cir. 1971)....-. 49 Erving v. Virginia Squires Basketball Club, 468 F.2d ~— 1064 (2d “Cir OUTED .. cucccccccccccecccsceoscess , Gilmer v. Interstate/Johnson Lane, 895 F.2d 195 (4th in a RR ee, pa Jeske v. Brooks, 875 F.2d 71 (4th Cir. 1989) ....----+>> 15 F. Lege, Mason & Co. v. Mackall & Coe, Inc., 351 | 1367 (D.D.C. 1972) .....----eeee errr 44, 45 Malison v. Prudential-Bache Secs., 654 F- Supp. 101 co CTRDEL, GOEPD ..~ 22 occ cccccescnnccccscncsscesses . Cit West Branch, 466 U.S. 284 “ene... a ¥« Le PS PRE Py 35, 37, 38, 39, 41 Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Hovey, - 726 F.2d 1286 (8th Cir. 1984).....-------eerrr tren 4 - h, Mitsubishi Motors Corp. v. Soler Chrysler Plymout | Inc., 473 US. 614 (1985) ....--- eee errr passim Morgan v. Smith Barney, Harris Upham & Co., 729 ” F.2d 1163 (8th Cir. 1984)....-.------eer errr Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., — 460 US. 1 (1983) ....----- cere ee reece 8, 11, - New York Gaslight Club, Inc. v. Carey, 477 US. 54 ” Mh Uae. © 206. ...5. gibt ela ets ag See ta 22, 31 Federal Arbitration Act, 9 U.S.C. §§ 1-15 ‘ he 6, 37, 38, 42, 45, 46, 48, 49 PE ctiaiecwicdadsaek Sina kelik es 4,7, 9, 26, 44 Pe NN Ga Pei eis ban caW acer oe sab henackedeey 2, 8 EE ane ith is sencucwebead avweanewultas 8, 26, 27 EE ink oss ecu Gie sok Cine a eeeanis Coan Eheee 21 ET eck escherees keene aes eK sees 19, 23, 24 CE ME ba Ceud ences 6b Goa Kos KEE Rab an 23 DUB. 8 UD... cccrscccscvcceesvcccesesevevencees 14 National Labor Relations Act, 29 U.S.C. §§ 151-168 i Pn re bh eke h eeu COR SAMAR E NUS RKP RES 32 Older Workers Benefit Protection Act, Pub. L. EY OE Ds cca cecctvedaeuseucseusvedns 34 Public Law Amending the Federal Arbitration Act, Pub. L. 91-368, 84 Stat. 693 (1970).........34, 35 TABLE OF AUTHORITIES - Continued Public Law Amending the Federal Arbitration Act, Pub. L. 100-702, 102 Stat. 4671 (1988) ........ 34 LEGISLATIVE MATERIALS Civil Rights Act of 1990, Section 18, reprinted in Conf. Rep. on Civil Rights Act of 1990, H.R. Doc. No. 101-856, 101 Cong., 2d Sess. (1990) ........ 32, 34 Joint Explanatory Statement of the Committee of Con- ference, reprinted in Conf. Rep. on Civil Rights Act of 1990, H.R. Doc. No. 101-856, 101 Cong., 2d By IN hd nec nk cdndunscdncenkedst ees dasntiscas 33 Hearing before a Subcommittee of the Senate Commit- tee on the Judiciary on S.4213 and S.4214, 67th me a ee ee 47 ARTICLES Note, Agreements to Arbitrate Claims Under the Age Discrimination in Employment Act, 104 Harv. L. BOW. TED CEONED occ ccccvcccncces 11, 22, 26, 29, 34, 39 Note, Classwide Arbitration and 10b-5 Claims In the Wake of Shearson/American Express, Inc. v. McMahon, 74 Cornell L. Rev. 380 (1989)........... 22 Note, To Arbitrate Or Not To Arbitrate? The Protec- tion of Rights Under The Age Discrimination In Employment Act, 1988 Journal of Dispute Reso- ED GU eck csv badcueederedecsenredsibedewsecesse 16 Shell, ERISA and Other Federal Employment Stat- utes: When Is Commercial Arbitration an “Ade- quate Substitute” for the Courts?, 68 Tex. L. Rev., Ee iskbpunedisssebescesacenagasexees eoas 39 xi TABLE OF AUTHORITIES - Continued Page Siconolfi, Blow to Brokers: Stock Investors Win More Punitive Awards in Arbitration Cases, Wall St. J., NN RM Se 23 Waks & Ginsberg, Arbitrating Executive and Other Employment Disputes: Let’s Put a Pin In Gardner- Denver!, reprinted in Proceedings of New York University’s 43rd National Conference on Labor, 62 (Little Brown, to be published Decem- Pee Ma vewadscwsss casediwisiaees ccateccto ow eees 28 OtTHER MarterIALs EEOC Notice No. N-915-060 (August 29, 1990)...... 41 New York Stock Exchange Rule 347.................. 1 New York Stock Exchange Arbitration Rules ag EE EA Ee OS Oe ee ee ee 18 NE ss coc evebacus5yss4eaneunvesencuaececsexedei 18 REET. + SeRGS euaych We lucususekusetnceexudicnabs cies 18 INN 0% Sv 5 C55 554 ins dd bdendesSaddnss ances aks 21, 22 IE 04k 64a e sae os senceuen Denn cdkessnececcaste 19 ME 0456446545 460865 d6sn ens 0558405 400k 6 scar 20, 21 ck PE POET OPEL LD ny ES Te ae 21 DET Se Ge ee chen edsastdedee ka bhi tea tineneeoe 23 SR or eg Se rea rr a eee Pee 22, 24, 25 xii TABLE OF AUTHORITIES - Continued Proceedings of the Twenty-Sixth Annual Convention of the International Seamen's Union of America, BE GOED oko no cccecceciens cocncenccedesses SEC Order Approving Proposed Rule Changes By New York Stock Exchange, Inc., Nat'l Ass'n of Sec. Dealers, Inc., and the American Stock Exchange, Inc., Relating to the Arbitration Process and the Use of Predispute Arbitration Clauses, 54 Fed. Reg. EY co kkanoeencé6s0sesKunueseseoeesaeeenadss SEC Order Approving Proposed Rule Change Relating To Amendments To Arbitration Pro- cedures And Fees, 55 Fed. Reg. 38181 ........ Page STATUTORY AND OTHER PROVISIONS INVOLVED In addition to those statutory provisions designated by Petitioner, Respondent directs the Court’s attention to Rule 347 of the Rules of the Board of Directors of the New York Stock Exchange, Inc., and the Arbitration Rules of the New York Stock Exchange, Inc., all of which are set out verbatim in the Appendix to this brief. STATEMENT OF THE CASE Petitioner became employed by Respondent in 1981 as a Manager of Financial Services. As required to per- form the duties of his position, he registered as a securi- ties broker with the New York Stock Exchange (“NYSE” or “the Exchange”). Petitioner was not a member of a union and, therefore, his employment was not subject to the terms of a collective bargaining agreement. Paragraph V of the registration agreement (Form U-4) submitted by Petitioner to the NYSE provides as follows: “I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm... that is required to be arbitrated under the rules, constitutions or bylaws of the organizations with which I| register... .” (J.A. at 18.)! NYSE Rule 347 provides for the arbitration of “[a]ny controversy .. . arising out of the employment or termi- nation of employment” of a registered securities repre- sentative. (App. *.) Petitioner’s employment with Respondent termi- nated in 1987. He filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) and subsequently filed his Complaint in the United States District Court for the Western District of ' Citations to “J.A.” are to tht Joint Appendix. Citations to “App.” are to the Appendix to this brief. ] 2 North Carolina before the EEOC finished its investigation or attempted conciliation of his claim. Petitioner’s Com- plaint presented only a single claim that his employer discharged him in violation of the ADEA. (J.A. at 4.) No other federal or state law claim (statutory or otherwise) is presented in this case; Petitioner also has not sought to initiate other legal proceedings regarding his employ- ment with Respondent. The Complaint challenged no employment policy or practice of the Respondent that affects any other employee or applicant. The remedies Petitioner seeks are those traditionally sought in a single discharge claim; i.e., individual reinstatement, backpay, and liquidated damages. Also, Petitioner seeks attorneys fees and court costs as authorized by federal law for a “prevailing party.” Interstate responded to Petitioner’s federal court Complaint by filing a motion to compel arbitration of Petitioner’s claim. (J.A. at 10.) The motion sought enforcement of the Petitioner’s arbitration agreement as authorized by section 3 of the Federal Arbitration Act (FAA), 9 U.S.C. § 3. Although he opposed the motion, Petitioner presented no evidence before the district court that the agreement did not cover his dispute with Respondent. He also did not dispute the validity of his arbitration agreement. Indeed, Petitioner’s counsel informed the district court that “I’m not alleging any fraud or anything.” (J.A. at 42.) Petitioner also did not dispute evidence presented by his employer that the reg- istration agreement containing the arbitration agreement was entered into by him as a requirement of performing the duties of his position. (J.A. at 74.) Instead, Petitioner’s principal argument for avoiding arbitration has been sim- ply that his statutory claim of age discrimination is not subject to the FAA’s provisions. 3 The district court denied Respondent’s motion and accepted Petitioner’s argument that Alexander v. Gardner- Denver Co., 415 U.S. 36 (1974), precluded enforcement of the arbitration agreement. (J.A. at 85.) Respondent appealed the district court’s refusal to enforce the arbitra- tion agreement to the United States Court of Appeals for the Fourth Circuit. (J.A. at 78.) The court of appeals reversed the district court's order in an opinion dated February 6, 1990. The appeals court held that the rationale underlying this Court’s deci- sions in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), Shearson/American Express, Inc. v. McMahon, 482 U.S. 220 (1987), and Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 109 S.Ct. 1917 (1989), mandated enforcement of Petitioner’s writ- ten arbitration agreement and that nothing in the ADEA’s text, history or purpose precluded arbitration of ADEA claims. Gilmer v. Interstate/Johnson Lane, 895 F.2d 195 (4th Cir. 1990). The court of appeals denied Petitioner’s motion for rehearing and suggestion for rehearing en banc on March 28, 1990. Petitioner filed a Petition for Cer- tiorari in this Court on June 26, 1990. The Petitioner presented two questions for review: (1) “Are claims brought pursuant to the Age Discrimination in Employ- ment Act, 29 U.S.C. § 621, et seq. (“ADEA”), subject to compulsory arbitration?” and (2) “Is an arbitration clause executed six years before any claim arises under the ADEA an invalid prospective waiver?” On October i, 1990, the Court granted certiorari as to the single issue of whether ADEA claims are subject to compulsory arbitra- tion. SUMMARY OF ARGUMENT This case presents the single issue of whether, under the FAA, Petitioner can be compelled to arbitrate his 4 ADEA claim. The Fourth Circuit in reversing the district court’s denial of arbitration held that Plaintiff could be compelled to arbitrate his ADEA claim. Respondent sub- mits that the circuit court’s ruling should be affirmed. The court of appeals determined the arbitrability of Petitioner's ADEA claim by following the analytical framework of this Court’s recent decisions in Mitsubishi v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), Shearson/ American Express, Inc. v. McMahon, 482 U.S. 614 (1985), and Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477 (1989). Those decisions resoundingly rejected the premise that statutory claims are inherently unsuited for arbitration. Instead, those cases recognized a rebut- table presumption favoring arbitrability in light of the congressional policy stated in the FAA. The FAA expressly mandates enforcement of private arbitration agreements “save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. In applying this presumption to statutory claims, the Court made clear in McMahon that arbitration should be com- pelled, unless the party opposing arbitration can affirma- tively demonstrate that, in enacting the statute giving rise to the claim, Congress intended to preclude a waiver of a judicial forum. Petitioner has not met his burden of affirmatively showing that Congress intended to except ADEA claims from compulsory arbitration. He concedes that neither the text nor legislative history of the ADEA contains any reference to arbitration. Moreover, his arguments that arbitration conflicts with the inherent purpose of the ADEA fall far short of rebutting the presumption favor- ing arbitrability. The Mitsubisht - McMahon — Rodriguez de Quijas tril- ogy establishes that the Court narrowly construes the type of evidence that will suffice to show a conflict 5 between statutory rights and arbitration. In large mea- sure, Petitioner simply argues archaic perceptions that arbitration will not provide him with an adequate forum to pursue his statutory claim. These arguments give little regard to the well-established procedures of the NYSE that will provide the forum for his claim and simply anticipate problems that may in fact never occur. The Mitsubishi trilogy rejected such arguments as nothing more than the very hostility towards arbitration that the FAA was intended to overcome. Petitioner’s concerns that arbitration will conflict with the statutory framework of the FAA also are unfounded. Arbitration will not diminish the EEOC’s enforcement role. It also does not conflict with the jury trial option or role of the courts under the ADEA. The jury trial option in ADEA cases is one that can be waived, just as in other statutory cases where arbitration agreements have been enforced. Sim- ilarly, there is no requirement in the ADEA that courts decide all cases. Private parties are free under the statute to settle cases or to choose state courts over federal courts, all without judicial supervision. No reason exists why they should not similarly be free to agree on arbitra- tion as the means for resolving their disputes, partic- ularly where, as here, arbitration involves no waiver of substantive rights and will be subject to judicial review to ensure that the Petitioner's ADEA claim is given due regard in the arbitral proceeding. Finally, Petitioner’s argument, premised on Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974) and related cases, that ADEA claims are in a special category of rights inherently unsuited for arbitration misconstrues those authorities. None of those cases dealt with the enfor- ceability of an individual arbitration agreement. None applied the FAA's presumption favoring arbitration to the claim at issue. Instead, those cases dealt either with the 6 preclusive effect that should be accorded collective bar- gaining arbitration (a much more limited form of arbitra- tion than available here) or with whether a statutory collective bargaining procedure provided the exclusive remedy for the wrong alleged. The issues decided were thus materially different than that presented here, and the Court’s decisions in those cases are not controlling. Amici curiae in support of Petitioner argue that the FAA does not apply to this case. They rely on language in section 1 of the Act that excludes “contracts of employ- ment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” from coverage by the FAA. 9 U.S.C. §1. Petitioner never raised this argument below, nor did he petition for certiorari on this issue. The issue is thus not properly before this Court. In any event, the amici overlook that Petitioner’s arbitration agreement is enforceable under the FAA over and above any connection it has with his employment with Respondent. The arbitration agreement is enforce- able as a material part of Petitioner’s registration agree- ment with the NYSE. He is thus bound by that agreement the same as Respondent and all others who contract to do business with the Exchange are bound by the Exchange's rules, bylaws and constitution. On this basis, courts uni- versally have held such arbitration agreements enforce- able under the FAA. The amici also construe section 1’s exclusionary lan- guage far too broadly in applying it to Petitioner’s arbi- tration agreement. Petitioner, as a professional broker and senior-level executive, does not fit within the categories of “workers” to which Congress intended the exclusion to apply. 7 ARGUMENT In this case, the Court must decide whether Congress foreclosed arbitration of Petitioner’s statutory claim of age discrimination in employment or whether, instead, the strong federal policies favoring arbitration require enforcement of Petitioner’s agreement to arbitrate his employment dispute. The appeals court held that Peti- tioner’s ADEA claim is subject to compulsory arbitration and that, under the FAA, the district court should have ordered Petitioner to arbitrate that claim. The appeals court’s decision dealt principally with the question of enforceability, finding in this Court’s recent decisions applying the FAA a strong presumption favoring enforce- ment of arbitration agreements. Although recognizing that in some statutory cases the FAA’s presumption of enforceability may be overcome by clear evidence of a congressional intent to preclude arbitration of the statu- tory claim, the appeals court found no such intent in the ADEA. Notwithstanding Petitioner’s arguments here, the appeals court was correct. I. THE FAA REQUIRES ENFORCEMENT OF PETI- TIONER’S AGREEMENT TO ARBITRATE BECAUSE CONGRESS HAS NOT EXCEPTED ADEA CLAIMS FROM THE MANDATE OF THE FAA AND SUCH CLAIMS ARE NOT INHERENTLY UNSUITABLE FOR ARBITRATION. A determination of whether Petitioner’s agreement to arbitrate is enforceable as to his statutory age claim must begin with an analysis of the FAA. McMahon, 482 U.S. at 225. Under section 2 of the Act, Congress long ago provided that arbitration agreements “shall be valid, irre- vocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any con- tract.” 9 USC. § 2. The Act requires a court to stay its 8 proceedings and direct the parties to resolve their dispute through arbitration whenever any suit is brought on a matter within the scope of an agreement to arbitrate. 9 U.S.C. § 3. Similarly, the Act directs a court, upon petition by an aggrieved party, to order arbitration whenever a party hag failed. neglected or refused to comply with an arbitration agreement. 9 U.S.C. § 4. This Court has recognized that “[t]he legislative his- tory of the [FAA] establishes that the purpose behind its passage was to ensure judicial enforcement of privately made agreements to arbitrate.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S 213, 219 (1985). The Act thus represents “a congressional declaration of a liberal federal policy favoring arbitration agreements. ...” Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). The statute's terms are mandatory; it “leaves no place for the exercise of discretion by a district court, but instead man- dates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agree- ment has been signed.” Byrd, 470 U.S. at 218 (emphasis in original). Where questions of arbitrability arise under a particular agreement, such “questions . . . must be addressed with a healthy regard for the federal policy favoring arbitration. . . . The Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. ...” Moses H. Cone Mem. Hosp., 460 US. at 24-25. In Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), this Court held that the congres- sional policy favoring enforcement of arbitration agree- ments applies with equal force to statutory claims. The Court rejected any notion that statutory claims should be subject to a per se rule of exclusion from the operation of the FAA: 9 [W]e find no warrant in the Arbitration Act for implying in every contract within its ken a pre- sumption against arbitration of statutory claims. Id. at 625. The Court then described the framework for determining the arbitrability of statutory claims: [T]he first task of a court asked to compel arbi- tration of a dispute is to determine whether the parties’ agreed to arbitrate that dispute. . . . [A]s with any other contract, the parties’ intentions control, but those intentions are generously con- strued as to issues of arbitrability. There is no reason to depart from these guidelines where a party bound by an arbitra- tion agreement raises claims founded on statu- tory rights. Some time ago this Court expressed “hope for [the Act’s] usefulness both in contro- versies based on statutes or on standards other- wise created,”[?] . . . and we are well past the time when judicial suspicion of the desirability of arbitration and of the competence of arbitral tribunals inhibited the development of arbitra- tion as an alternative means of dispute resolu- tion. . . . Of course, courts should remain attuned to well-supported claims that the agree- ment to arbitrate resulted from the sort of-fraud or overwhelming economic power that would provide grounds “for revocation of any con- tract.”[3] . . . But, absent such compelling con- siderations, the Act itself provides no basis for disfavoring agreements to arbitrate statutory claims by skewing the otherwise hospitable inquiry into arbitrability. Id. at 626-27 (citations omitted). Where the parties’ agree- ment encompasses the statutory Tlaim at issue, a second inquiry arises, which is the issue presently before the 2 Quoting Wilko v. Swan, 346 U.S 427, 432 (1953) (footnote omitted). 3 Quoting 9 U.S.C. § 2. 10 Court. A court must discern if “legal constraints external to the parties’ agreement foreclosed the arbitration of those claims.” Id. at 628. In making this determination, the Court explained that it is the congressional intention expressed in some other statute on which the courts must rely to identify any category of claims as to which agreements to arbitrate will be held unen- forceable. . .. We must assume that if Congress intended the substantive protection afforded by a given statute to include protecticn against waiver of the right to a judicial forum, that intention will be deducible from text or legisla- tive history. . . . Having made the bargain to arbitrate, the party should be held to it unless Congress itself has evinced an intention to pre- clude a waiver of judicial remedies for the statu- tory rights at issue. Id. at 627-28 (citations omitted). Significantly, the Court rejected as unfounded any fears that the substantive rights advanced in a particular statutory claim would be lost or diminished if resolved in an arbitral, rather than a judicial, forum: By agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum. It trades the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration. Id. at 628. Following Mitsubishi, this Court consistently has underscored the strong policies favoring enforcement of arbitration agreements, even as to claims involving statu- tory rights. See Shearson/American Express, Inc. v. McMahon, 482 U.S. 220 (1987); Rodriguez de Quijas v. Shear- son/Ame~ican Express, Inc., 490 U.S. 477, 109 S.Ct. 1917 (1989). McMahon has particular significance. It expands 11 upon the Mitsubishi framework for determining the arbi- trability of a particular statutory claim, and emphasizes that the party opposing arbitration must carry the burden on that question. In McMahon, the Court stated: Like any statutory directive, the Arbitration Act’s mandate may be overridden by a contrary congressional command. The burden is on the party opposing arbitration, however, to show that Congress intended to preclude a waiver of judicial remedies for the statutory rights at issue .... If Congress did intend to limit or prohibit waiver of a judicial forum for a particular claim, such an intent “will be deducible from [the stat- ute’s] text or legislative history,” ... or from an inherent conflict between arbitration and the statute’s underlying purposes. 482 U.S. at 226-27, quoting Mitsubishi, 473 “_.S. at 62° After McMahon, it is clear that, absent an affirmative showing that Congress specifically intended that particu- lar statutory claims be resolved only in a judicial forum,‘ * Mitsubishi and McMahon clearly hold that a congres- sional intent to exclude statutory claims from compulsory arbi- tration cannot be presumed. Rather, such an intent must be clearly demonstrated in the text or legislative history or by an inherent conflict between arbitration and the underlying pur- poses of the statute. Reading Mitsubishi, McMahon and Rodriguez de Quijas together demonstrates that the Court narrowly construes the type of evidence that can show a congressional intent to pre- clude compulsory arbitration of particular statutory claims. See Note, Agreements to Arbitrate Claims Under the Age Discrimina- tion in Employment Act, 104 Harv. L. Rev. 568, 573 (1990) (here- inafter cited as “Harv. Note”). This conclusion is evident in the Court’s repeated affirmation of the “liberal federal policy favoring arbitration,” Moses H. Cone Mem. Hosp., 460 U.S. at 24, quoted in Mitsubishi, 473 U.S. at 625; and McMahon, 482 U.S. at 226; and its unwillingness to find that a statutory framework (Continued on following page) 12 courts should hold a party to his agreement to arbitrate such claims. The Fourth Circuit correctly applied the McMahon analysis in this case. In determining under the FAA that Petitioner should arbitrate his age claim in accordance with his agreement, the appeals court correctly followed the dictates of Mitsubishi, McMahon, and Rodriguez, find- ing that: nothing in the text, legislative history, or under- lying purposes of the ADEA indicate[s] a con- gressional intent to preclude enforcement of arbitration agreements. Arbitration is nowhere mentioned in the text of the statute, and “[t]his silence in the text is matched by silence in the statute’s legislative history.” McMahon, 107 S.Ct. at 2344. Nor is there any statement on the part of Congress to indicate that a federal judicial forum is the only appropriate forum for vindica- tion of the rights created by the ADEA. More- over, we see no conflict between arbitration and the underlying purposes of the ADEA which would preclude arbitration of ADEA claims. 895 F.2d at 197. Significantly, at no time in the court below, nor in this Court, has Petitioner disputed the appeals court’s determination that neither the ADEA’s text nor its legislative history expressly forecloses com- pulsory arbitration. Petitioner instead has focused on (Continued from previous page) relying on judicial procedures and remedies in and of itself indicates a congressional intent to preclude arbitration, see, e.g., Mitsubishi, 473 U.S. at 632-37; McMahon, 482 U.S. at 230-31 (rejecting argument that arbitration would weaken a plaintiff's ability to recover); Rodriguez de Quijas, 109 S.Ct. at 1920-21 (rejecting Wilko v. Swan determination that procedural rights afforded plaintiffs under the 1933 Securities Act showed a congressional intent to preclude compulsory arbitration of claims under that Act). 13 what he perceives to be the inadequacy of arbitrs tion to resolve a statutory discrimination claim and or inherent conflicts that he claims exist between the ADE.\’s statu- tory framework and/or its underlying purpose and any arbitration. These arguments do not withstand scrutiny under the principles recently enunciated by this Court’s opinions on the arbitrability of statutory claims. A. Petitioner’s Arguments That Arbitration Can- not Adequately Resolve His ADEA Claim Are Neither Legally Nor Factually Sufficient To Avoid Arbitration. Petitioner argues at great length that arbitral procedures simply are inadequate to resolve an ADEA claim. He con- tends that compulsory arbitration might diminish his ability to vindicate his ADEA claim due to a variety of factors, including (i) the suspected potential bias of industry arbitra- tors; (ii) the suspected inexperience of arbitrators in dealing with statutory discrimination claims; (iii) the alleged unavailability of discovery; (iv) the alleged limited remedies that would be available in an arbitral proceeding; (v) the likelihood that arbitrators will not issue written opinions, thereby impairing judicial review and eliminating a source of doctrinal development under the Act; (vi) the limited grounds for vacating an award; and (vii) the purported narrow transactional focus of arbitral proceedings. Peti- tioner’s argument falls far short of what the McMahon anal- ysis requires under the FAA to deny enforcement of a valid agreement to arbitrate. 1. Petitiorer’s Policy Arguments About The Adequacy Of Arbitration To Resolve A Stat- utory Claim Are Not Legally Sufficient To Avoid Enforcement Of His Agreement. Viewed candidly, Petitioner’s arguments evidence only policy judgments that are premised on suspicions 14 and fears about arbitration as a mechanism for dispute resolution. This Court’s recent decisions make clear that it no longer accepts such generalized objections as ade- quate bases upon which to deny arbitration of disputes, statutory or otherwise. Mitsubishi, 473 US. at 627. In fact, the Court has gone further to endorse the prompt enforce- ment of valid arbitration agreements, noting that objec- tions such as those raised by Petitioner here may be better resolved at the award-enforcement stage.® In Mitsubishi, for example, an amicus argued that the matter should not be sent to arbitration because the arbi- tral panel might misapply the law. It thereby presented a question about the “competency” of the panel to decide statutory issues. In rejecting this argument, the Court stated: We .. . have no occasion to speculate on this matter at this stage in the proceedings, when Mit- subishi seeks to enforce the agreement to arbi- trate, not to enforce an award. 473 U.S. at 637 n.19 (emphasis added). The Court’s obser- vation is significant in that it underscores the obvious: there is no present need to resolve what may — but has not yet — become an objection to one or even several part(s) of a future arbitration. The Court similarly emphasized in Mitsubishi that adequate safeguards were present after the arbitration to > In November 1988 Congress amended the FAA to clarify when lower courts’ orders involving enforcement of arbitration agreements are appealable. See 9 U.S.C. § 15. While an order denying enforcement of an arbitration agreement is imme- diately appealable under this section, an order enforcing such an agreement is appealable only after arbitration has been completed. Compare § 15(a) with § 15(b). This amendment underscores the priority Congress places on prompt enforce- ment of such agreements. See Jeske v. Brooks, 875 F.2d 71 (4th Cir. 1989) for a proper application of this recent amendment. 15 ensure that the procedure adequately addressed the stat- utory claims: Having permitted the arbitration to go for- ward, the national courts of the United States will have the opportunity at the award-enforce- ment stage to ensure that the legitimate interest in the enforcement of the antitrust laws has been addressed. Id. at 638 (emphasis added). Implicit in the Court’s obser- vation is that speculation about potential problems does not aid resolution of the present inquiry on enforceability. Other language in Mitsubishi further demonstrates that the Court is not inclined to prejudge the adequacy of a particular arbitral procedure in deciding whether to enforce an arbitration agreement. For example, the Court rejected concerns that antitrust claims had never before been resolved in an international arbitral tribunal, observing that the potential of these [arbitral] tribunals for effi- cient disposition of legal disagreements arising from commercial relations has not yet been tested. If they are to take a central place in the interna- tional legal order, national courts will need to “shake off the old judicial hostility to arbitra- a es Id. at 638 (citation omitted; emphasis added). The Court also addressed an objection that arbitrators familiar with national law may not be available on the international arbitral tribunal that would hear the dispute. The Court rejected that objection, again articulating its clear prefer- ence that the arbitral proceeding be given a chance to deal with the issue: [A]daptability and access to expertise are hall- marks of arbitration. The anticipated subject matter of the dispute may be taken into account when the arbitrators are appointed. . . . ld. at 633 (emphasis added). 16 In sum, the Court’s approach in these cases has been to effectuate Congress’ intention that arbitration agree- ments be liberally enforced under the FAA. In so doing, it consistently has discouraged just the type of policy judg- ments about arbitration that Petitioner advances here. See Note, To Arbitrate Or Not To Arbitrate? The Protection of Rights Under The Age Discrimination In Employment Act, 1988 Journal of Dispute Resolution 199, 217 (“The clear mandate in Mitsubishi is that it is the intent found in the text of the statute [giving rise to the claim], not the logical conclusions of the courts regarding the adequacy of arbi- tration, that is determinative.”). Thus, the Court has dem- onstrated its preference that the courts enforce valid arbitration agreements. Particular objections to specific procedures or arbitrators are better resolved at the award-enforcement stage, after an adequate record has been compiled on which objections, if any, can be evalu- ated. This approach simply applies common sense. A court too often is faced with an inadequate or nonexistent record to decide these questions at the threshold when it is deciding whether the arbitration agreement should be enforced at all. Justice Frankfurter’s dissent in Wilko v. Swan, 346 U.S. 427, 439 (1953), in which the Court denied enforcement of an arbitration agreement as to 1933 Secu- rities Act claims, supports this point. Justice Frankfurter noted that the majority decision did not rest on any evidence, cither, “in the record .. . [or] in the facts of which [the Court could] take judicial notice” in conclud- ing “that the arbitral system ... would not afford the plaintiff the rights to which he is entitled.”® * Recent decisions of this Court have cited Justice Frank- furter’s comments approvingly. See McMahon, 482 U.S. at 231, and Rodriguez de Quijas, 109 S.Ct. at 1921. 17 These same weaknesses exist in Petitioner’s argu- ments here. As the discussion which follows shows, there is no record, nor any facts of which a court could take judicial notice, showing that the NYSE arbitration pro- cedures available to Petitioner will prove inadequate to resolve his ADEA claim. Petitioner therefore cannot rebut the presumption favoring arbitration. He therefore should be required “to honor [his] bargain,” Mitsubishi, 473 U.S. at 640, citing Alberto-Culver Co. v. Scherk, 484 F.2d 611, 620 (7th Cir. 1973) (Stevens, J., dissenting), rev’d., 417 U.S. 506 (1974), by exhausting arbitration first and then - if needed - seeking judicia! -elief based on any inade- quacies that he believes Decument Peedaction ead fatacmiatios scheduled hearing date, all parties shall serve on each Exchange other copies of documents in their possession that they (1) Any party may serve a written request for information or documents (“information request”) upon another party twenty (20) busi- ness days or more after services of the Statement of Claim by the Director of Arbitration or upon filing of the Answer, whichever is earlier. The requesting party shall serve the information request on all parties and file a copy with the Director of Arbitration. The parties shall endeavor to resolve disputes regarding an infor- mation request prior to serving any objection to the request. Such efforts shall set forth in the objection. (2) Unless a gieater time is allowed by the requesting party, information requests shall be satisfied or objected to within thirty (30) calen- dar days from the date of service. Any objection to an information request shall be served by the objecting party on all parties and filed with the Director of Arbitration. (3) Any response to objections to an infor- mation request shall be served on all parties and filed with the Director of Arbitration within ten (10) calendar days of receipt of the objection. (4) Upon written request of a party whose information request is unsatisfied, the matter will be referrec py the Director of Arbitration to either a pre-hearing conference under para- graph (d) of this section or to a selected arbitrag tor under paragraph (e) of this section. intend to present at the hearing and identify witnesses they intend to present at the hearing. The arbitrator(s) may exclude from the arbitration, any document not exchanged or witnesses not identified at that time. This paragraph does not require service of copies of docu- ments or identification of witnesses which parties may use for cross-examination or rebuttal. (d) Pre-Hearing Conference (i) Upon the written request of a party, an arbitration, or at the discretion of the Director of Arbitration, a pre-hearing conference shall be scheduled. The Director of Arbitration shall set the time and place of a pre-hearing conference and appoint a person to preside. The pre-hear- ing conference may be held by telephone confer- ence call. The presiding person shall seek to achieve agreement among the parties on any issues that relate to the pre-hearing process or to the hearing, including but not limited to, the exchange of information, exchange or produc- tion of documents, identification of witnesses, identification and exchange of hearing docu- ments, stipulations of fact, identification and briefing of contested issues, and any other mat- ter which will expedite the arbitration proceed- ings. (2) Any issues raised at the pre-hearing con- ference that are not resolved may be referred by the Director of Arbitration to a single member of the Arbitration Panel for decision. App. 20 (e) Decisions by Selected Arbitrator The Director of Arbitration may appoint a single member of the Arbitration Panel to decide all unresolved issues referred to under this section. Such arbitrator shall be authorized to act on behalf of the panel to issue subpoenas, direct appearances of witnesses and produc- tion of documents, set deadlines and issue any other ruling which will expedite the Arbitration proceeding or is necessary to permit any party to develop fully its case. Decisions under this paragraph shall be made upon the papers submitted by the parties, unless the arbitrator calls a hearing. The Arbitrator may elect to refer any issue under this paragraph. (f) Subpoenas The arbitrator(s) and any counsel of record to the proceedings shall have the power of the subpoena pro- cess as provided by law. All parties shall be given a copy of the subpoena upon its issuance. The parties shall pro- duce witnesses and present proofs to the fuliest extent possible without resort to the subpoena process. (g) Power to Direct Appearance and Production of Documents The arbitrator(s) shall be empowered without resort to the subpoena process to direct the appearance of any person employed or associated with any member or member organization of the New York Stock Exchange, Inc. and/or the production of any records in the posses- sion or control of such persons or members. Unless the arbitrator(s) direct otherwise, the party requesting the appearance of a person or the production of documents ' App. 21 under this section shall bear all reasonable costs of such appearance and/or production. Amended. May 10, 1989. Evidence Rule 620. The arbitrators shall determine the mate- riality and relevance of any evidence proffered and shall not be bound by rules governing the admissibility of evidence. Renumbered. May 10, 1989. Interpretation of Code Rule 621. The arbitrators shall be empowered to interpret and determine the applicability of all provisions under this Code which interpretation shall be final -and binding upon the parties. Renumbered. May 10, 1989. Determinations of Arbitrators Rule 622. All rulings and determinations of the panel shall be by a majority of the arbitrators. Renumbered. May 10, 1989 App. 22 Record of Proceedings Rule 623. A verbatim record by stenographic reporter or tape recording of all arbitration hearings shall be kept. If a party or parties to a dispute elect to have the record transcribed, the cost of such transcription shall be borne by the party or parties making the request unless the arbitrators direct otherwise. The arbitrators may also direct that the record be transcribed. If the record is transcribed at the request of any party, a copy shall be provided to the arbitrators. Amended. May 10, 1989. Oaths of the Arbitrators and Witnesses Rule 624. Prior to the commencement of the first session, an oath or affirmation shall be administered to the arbi- trators. All testimony shall be under oath or affirmation. Renumbered. May 10, 1989. Amendments Rule 625. (a) After the filing of any pleadings, if a party desires tc file a new or different pleading, such change must be made in writing and filed with the Direc- tor of Arbitration. The Director of Arbitration shall endeavor to serve promptly by mail or otherwise upon all other parties a copy of said change. The other parties may, within ten (10) business days from the receipt of service, file a response with the Director of Arbitration. App. 23 (b) After a panel has been appointed, no new or different pleading may be filed except for a responsive pleading as provided for in (a) above or with the panel’s consent. Amendment. December 6, 1984. Renumbered. May 10, 1989. Reopening of Hearings Rule 626. Where permitted by law, the hearings may be reopened by the arbitrators on their own motion or in the discretion of the arbitrators upon application of a party at any time be‘ore the award is rendered. Renumbered. May 10, 1989. Awards Rule 627. (a) All awards shall be in writing and signed by a majority of the arbitrators or in such manner as is required by law. Such awards may be entered as a judgment in any court of competent jurisdiction. (b) Unless the law directs otherwise, all awards ren- dered pursuant to this Code shall be deemed final and not subject to review or appeal. (c) The Director of Arbitration shall endeavor to serve a copy of the award: (i) by registered or certified App. 24 mail upon all parties, or their counsel, at the address of record; or, (ii) by personally serving the award upon the parties; or, (iii) by filing or delivering the award in such manner as may be authorized by law. (d) The arbitrator(s) shall endeavor to render an award within thirty (30) days from the date the record is closed. (e) The award shall contain the names of the par- ties, a summary of the issues in controversy, the damages and/or other relief requested, the damage and/or other relief award, a statement of any other issues resolved, the names of the arbitrators, the dates the claim was filed and the award rendered, the number and dates of hearing sessions, the location of the hearing, and the signatures of the arbitrators concurring in the award. (f) The awards shall be made publicly available, provided however, that the name of the customer party to the arbitration will not be publicly available if he or she SO requests in writing. Amended. May 10, 1989. Miscellaneous Rule 628. This Code shall be deemed a part of and incorporated by reference in every duly-executed Sub- mission Agreement which shall be binding on all parties. Renumbered. May 10, 1989. App. 25 Schedule of Fees Rule 629. (a) At the time of filing a Claim, Counter- claim, Third-Party Claim or Cross-Claim, a Claimant shall deposit with the New York Stock Exchange, Inc. the amount indicated below unless such deposit is specifi- cally waived by the Director of Arbitration. Amount in Dispute Deposit (Exclusive of interest and expenses) Nea a aans cnc cuasaccccceccccccs..... $ 15 Above $1,000-but not exceeding $2,500 .............. 25 Above $2,500-but not exceeding $5,000 ............. 100 Above $5,000-but not exceeding $10,000............ 200 Above $10,000-but not exceeding $50,000... ..___ 400 Above $50,000-but not exceeding $100,000.......... 500 Above $100,000-but not exceeding $500,000......... 750 areas ics cacccccccccccecee... $1,000 Where the amount in dispute is $10,000 or less, no additional deposits shall be required despite the number of hearing sessions. Where the amount in dispute is above $10,000 and multiple hearing sessions are required, the arbitrators may require any of the parties to make additional deposit for each additional hearing session. In no event shall the aggregate amount Geposited per hear- ing session exceed the amount of the initia] deposit as set forth in the above schedule. (b) A hearing session is any meeting between the parties and the arbitrator(s), including » pre-hearing con- ference, which lasts four (4) hours or less. (c) The arbitrators, in their awards, may determine the amount chargeable to the parties as forum fees (fees) and shall determine by whom such fees shall be borne Where the amount in dispute is $10,000 or less, total fees App. 26 to the parties shall not exceed the amount of the total initial deposit deposited by the parties, regardless of the number of hearing sessions conducted. Where the amount in dispute is above $10,000, total fees chargeable to the parties per hearing session may equal but shall not exceed the amount of the total initial deposit(s) deposited by the parties. Amounts deposited by a party shall be applied against fees, if any. If the fees are not assessed against a party who has made a deposit, the deposit will be refunded. In addition to forum fees, the arbitrator(s) may determine in their awards the amount of costs incurred pursuant to Rules 617, 619 and 624, and unless applicable law directs otherwise, other costs and expenses of the parties and arbitrator(s) that are within the scope of the agreement of the parties or are otherwise permitted by law. The arbitrator(s) shall determine by whom such costs shall be borne. (d) If the dispute, claim or controversy does not involve or disclose a money claim, the amount to be deposited by the Claimant shall be $100, or such amount as the director of arbitration or the panel of arbitrators may require but shall not exceed $1,000. (e) Any matter submitted and thereafter settled or withdrawn prior to the commencement of the first ses- sion shall entitle the parties to a refund of all but $25 of the amount deposited with the New York Stock Exchange, Inc. (f) Any matter submitted and thereafter settled or withdrawn subsequent to the commencement of the first session may be subject to such refund of assessed App. 27 deposits, if any, as the New York Stock Exchange, Inc. may determine. | (g) The arbitrators may assess forum fees and costs incurred pursuant to Rules 617, 619 and 623 in any matter settled or withdrawn subsequent to the commencement of the first session. (h) The fees for a pre-hearing conference with an arbitrator shall be seventy-five (75%) per cent of the fees contained in subsection (a). Amendment. December 6, 1984. May 20, 1987. May 10, 1989. Uniform Arbitration Code Rule 636. The provisions of the Uniform Arbitration Code contained in Rules 600 through 630 shall also apply to controversies between members, allied members, member firms, member organizations and/or nonmem. bers who are not public customers, except insofar as such Provisions specifically apply to matters involving public customers. Amendment. June 18, 1986. Renumbered. May 10, 1989. App. 28 Schedule for Member Controversies Rule 631. At *he time of filing a Submission Agree- ment, a Claimant suall deposit with the New York Stock Exchange, Inc. the amount indicated below: Deposit Per Hearing EE Se eh ae eR Le $200°* $5000 or more but less than $100,000.............. $750 REIT er pacer ree eS $1,000 Where the controversy does not involve a money claim, the costs and the amount to be deposited shall be such amount as may be fixed in advance by the Exchange, except that such amount shall not exceed $1,000 per hearing. When the controversy is resolved in any way other than by arbitration award, the Exchange shall retain $25. Amendment. May 20, 1987. Renumbered. May 10, 1989. Member Controversies Rule 632. Any controversy between parties who are members, allied members, member firms or member cor- porations shall be submitted for arbitration to members of the Board of Arbitration, unless non-members are also * This shall also be the fee for non-member claimants who are not public customers. App. 29 parties to the controversy. If the amount (exclusive of interest and costs) involved in the controversy is less than $10,000 the controversy shall be heard by one arbitrator. If such amount is $10,000 or more the controversy shall be heard by at least three but not more than five arbitra- tors. If nonmembers are also parties to such controver- sies, the arbitrators shall be appointed in accordance with Rule 607 unless the non-member(s) consent to arbitration before members of the Board of Arbitration. Adopted. November 30, 1983. Amendment. June 18, 1986. Renumbered. May 10, 1989. Filing Fee for Member Non-Member Controversies Rule 633. A member organization shall, when filing a claim against a nonmember, pay a non-refundable filing fee of $500. This fee shall be an addition to all other fees, deposits or costs which may be required. Adopted. December 6, 1984. Renumbered. May 10, 1989. App. 30 Board of Arbitration Rule 634. Promptly after the annual election of the Exchange, the Chairman of the Board of Directors shall appoint, subject to the approval of the Board of Directors, a Board of Arbitration to be composed of such number of present or former members, allied members and officers of member corporations of the Exchange who are not members of the Board of Directors as the Chairman of the Board of Directors shall deem necessary to serve at the pleasure of the Board of Directors or until the next annuai election of the Exchange and their successors are appoin- ted and take office. Adopted. May 20, 1987. Renumbered May 10, 1989. Panel of Arbitrators Rule 635. The Chairman of the ard of Directors shall from time to time appoint two panels of arbitrators, composed of persons who are residents of or have their places of business in the Metropolitan area of the City of New York. The first of such panels shall be composed of persons engaged in or retired from the securities business and the second of such panels shall be composed of persons not engaged in the securities business. The Chairman of the Board of Directors may likewise appoint panels similar to the panels above described to serve outside the City of New York. App. 31 Adopted. May 20, 1987. Renumbered. May 10, 1989. Direction of Arbitration Rule 636. The Chairman of the Board, shall designate one of the officers or other employees of the Exchange as Director of Arbitration. The Director of Arbitration shall be charged with the duty of performing all ministerial duties in connection with matters submitted for arbitra- tion pursuant to these Rules. Adopted. May 20, 1987. Amended. May 10, 1989. Requirements When Using Pre-Dispute Arbitration Agreements With Customers Rule 637. (1) Any pre-dispute arbitration clause shall be highlighted and shail be immediately preceded by the following disclosure language (printed in outline form as set forth herein) which shall also be highlighted: (a) Arbitration is final ard binding on the parties. (b) The parties are waiving their right to seek remedies in court, including the right to jury trial App. 32 (c) Pre-Arbitration discovery is generally more limited than and different from court pro- ceedings. (d) The arbitrators’ award is not required to include factual findings or legal reasoning and any party’s right to appeal or to seek mod- ification of rulings by the arbitrators is strictly limited. (e) The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with securities industry. (2) Immediately preceding the signature line, there shall be a statement which shall be highlighted that the agreement contains a pre-dispute arbitration clause. The statement shall also indicate at what page and paragraph the arbitration clause is located. (3) A copy of the agreement containing any such clause shall be given to the customer who shall acknow!- edge receipt thereof on the agreement or on a separate document. (4) No agreement shall include any condition which limits or contradicts the rules of any self-regulatory or- ganization or limits the ability of a party to file any claim in arbitration or limits the ability of the arbitrators to make any award. (5) The requirements of this section shall apply only to new agreements signed by an existing or new customer of a member or member organization after September 7, 1989. Adopted. May 10, 1989. App. 33 NOTE: Additional amendments were made to the NYSE Arbitration Rules effective September 10, 1990. See 55 Fed. Reg. 38181. These amendments were not available in final published form in time for inclusion-in this appendix. Principally, the amendments liberalize the availability of collective proceedings, Rule 612, allow the awarding of interest on awards, Rule 627, and modify the fee provi- sions, Rules 629, 631 and 633. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0001%3A06. Public record. Not legal advice.