# Amicus Curiae Brief — Gilmer v. Interstate/Johnson Lane Corp.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1991
- **Citation:** 500 U.S. 20

## Text

~

4) ue ee Fi
No. 90-18 soeti atin

IN THE

Supreme Court of the United States

OCTOBER TERM, 1990

ROBERT D. GILMER.

y Petitioner,

INTERSTATE/JOHNSON LANE CORPORATION,
Respondent.

On Writ of Certiorari To the United States
Court of Appeals for the Fourth Circuit

BRIEF FOR THE LAWYERS’ COMMITTEE FOR
CIVIL RIGHTS UNDER LAW AS
AMICUS CURIAE IN SUPPORT OF THE

PETITIONER
ROBERT F. MULLEN ALAN E. Kraus*
DaviD S. TATEL NICHOLAS DEB. KATZENBACH
Co-Chairmen LAURA J. LOKKER

PETER C. HARVEY
NORMA REDLICH

Trustee RIKER, DANZIG, SCHERER,
BARBARA R. ARNWINE HYLAND & PERRETTI
THOMAS J. HENDERSON Headquarters Plaza

Morristown, NJ 07962-1981
LAWYERS’ COMM!TTEE FOR (201) 538-0800

CiviL RIGHTS UNDER Law
1400 “Eye” Street, N.W.
Suite 400
Washington, DC 20005
(202) 371-1212
Attorneys for Amicus Curiae
Lawyers’ Committee for Civil Rights
Under Law

November 15, 1990 *Counsel of Record

2\

*~

eee.

QUESTION PRESENTED

Whether an employee who signs a pre-employment con-
tract with his employer to arbitrate any claims between the
parties bargains away his right to have his federal statutory
claims of discrimination adjudicated in the courts?

li

TABLE OF CONTENTS
PAGE
QUESTION PRESENTED .......... fe ete eG l
INTEREST OF AMICUS CURIAE ........... l
SUMMARY OF ARGUMENT.............. 2

ARGUMENT

I. THE FOURTH CIRCUIT’S DECISION
ALLOWING COMPULSORY ARBITRATION
OF ADEA CLAIMS DISREGARDS THIS
COURT'S HOLDINGS IN GARDNER-
DENVER, MCDONALD, AND BARRENTINE
AND IS CONTRARY TO THE LEGISLATIVE
INTENT OF FEDERAL CIVIL RIGHTS
STAC UE ss 00-0 bS ae eee se bs « 16
1. The FAA exempts employment disputes 17
2. The legislative history of Title VII
evidences a clear preference for judicial
PP NR 18
CORRS ce cetevesere eee 24

TABLE OF AUTHORITIES
Cases

Albemarle Paper Co. v. Moody, 422 U.S. 405
SE a

Alexander v. Gardner-Denver Co., 415 U.S. 36
a

Alford v. Dean Witter Reynolds, 905 F.2d 104
a ag ge nella

American Postal Workers Union v. United States
Postal Service, 823 F.2d 466 (i ith Cir. 1987)...

Barrentine v. Arkansas-Pest Freight System, Inc.,
450 U.S. 728 (1981), cert. denied, 471 U.S. 1054
aes 2 oe wane onesie ee 0 9

Connecticut v. Teal, 457 U.S. 440 (1982) ......

Derwin v. General Dynamics Corp., 719 F.2d 484
ee

Gilmer v. Interstate/Johnson Lane Corporation,
895 F.2d 195 (4th Cir. 1990).............

Hazelwood School District v. United States,
CE ES

Johnson v. University of Wisconsin - Milwaukee,
I

International Brotherhood of Teamsters v. United
States, 431 U.S, 324 (1977)... ........4.4..

Lewis v. Bloomsburg Mills, Inc., 773 F.2d 561
Tt 6 UW be da 0's

Lorillard v. Pons, 434 U.S. 575 (1978)... .....

McDonald v. City of West Branch, 466 U.S. 284
oi LECCE creie TE ody Avo dic 6 a cle ve «

Mitsubishi Motors Corp. v. Soler Chrysler-
Plymouth, Inc., 473 U.S. 614 (1985) ........

Nicholson v. CPC International, Inc., 877 F.2d 221
Nee tees

18

iv

Occidental Chemical Corp. v. Intn’l Chemical

Workers Union, 853 F.2d 1310 (6th Cir. 1988). .
Oscar Mayer and Co. v. Evans, 441 U.S. 750

BOO wi ed a Oe aera
Payne v. Travenol Laboratories, Inc., 673 F.2d 798

(Sth Cir.), cert. denied, 459 U.S. 1038 (1982)...
Rodriguez De Quijas v. Shearson/American

Express, Inc., 490 U.S. 477 (1989) .........
Shearson/American Express, Inc. v. McMahon,

GS ee Lace st tet ates sees
Sledge v. J.P. Stevens & Co., 585 F.2d 625

(4th Cir. 1978), cert. denied, 440 U.S. 981 (1979)
Swenson v. Management Recruiters International,

Inc., 858 F.2d 1304 (8th Cir. 1988), cert. denied,

OS. .¢ RODE Ge Pe eee tec ccce.

Tenney Engineering, Inc. v. United Electrical,

Radio and Machine Workers’ of America,

207 F.2d 450 (3d Cir. 1953) .............
Trans World Airlines, Inc. v. Thurston,

Se eee Pe ee
United Paperworkers Intn’l Union, AFL-CIO v.

Misco, Inc., 484 U.S. 29 (1987) ...........
United Steelworkers of America v. Enterprise

Wheel & Car Corp., 363 U.S. 593 (1960) .....
Utley v. Goldman Sachs & Co., 883 F.2d 184

(ist Cir. 1989), cert. denied, US. ,

} 29 % Qh ae ae
Wards Cove Packing Co., Inc. v. Atonio,

GO UB. Geeeress oe ok PIG. ccc cee’
Watson v. Fort Worth Bank & Trust, 487 U.S. 977
SEE ¢ 6 oc oo CUSSED S'S 6 JOR DVS.

PAGE

1,24

Other

Report of House Comm. on Education and Labor,
87th Congress, 2d Sess., H. Report No. 1370
(reprinted in Legislative History of Titles VII and
XI of Civil Rights Act of 1964, United States
Equal Opportunity Commission) ..........

House and Senate Committees on Labor and
Public Wellfare, Legislative History of the Equal
Employment Opportunity Act of 1972
See ce cc eee

9 U.S.C. § 1, et seg. (1990)... .. 2.2.2.0.
28 U.S.C. § 1983 (1990) ................
Sn. oc wwe sce couse:
29 U.S.C. §§ 621, 634(1990) .............
29 U.S.C. § 623(aX2) (1990)... 2.2... ee.
29 U.S.C. § 626(b) (1990) ...............
29 U.S.C. § 626(d) (1990) ...............
42 U.S.C. § 20006e et seq. (1990) ...........
42 US.C. § 2000e-2(aX2) (1990) ...........
42 U.S.C. § 2000e-5 (1990)... ............
42 U.S.C. § 2000e-5(f) (1990) .............

PAGE

19

l
INTEREST OF AMICUS CURIAE

The Lawyers’ Committee for Civil Rights Under Law
submits this brief as amicus curiae urging reversal of the
decision by the Court of Appeals for the Fourth Circuit in
Gilmer v. Interstate/Johnson Lane Corporation, 895 F.2d 195
(4th Cir. 1990).!

The Lawyers’ Committee is a nonprofit organization
established in 1963 at the request of the President of the
United States to involve leading members of the bar through-
out the country in the national effort to insure civil rights to
all Americans. It has represented and assisted other lawyers
in representing numerous plaintiffs in administrative pro-
ceedings and lawsuits under Title VII. £.g., Lewis v. Blooms-
burg Mills, Inc., 773 F.2d 561 (4th Cir. 1985); Payne v.
Travenol Laboratories, Inc., 673 F.2d 798 (Sth Cir.), cert.
denied, 459 U.S. 1038 (1982); Sledge v. J.P. Stevens & Co.,
585 F.2d 625 (4th Cir. 1978), cert. denied, 440 U.S. 981
(1979). The Lawyers’ Committee has also represented parties
and participated as an amicus in Title VII cases before this
Court. E.g., Wards Cove Packing Co., Inc. v. Atonio,
490 U.S. 642 (1989); Watson v. Fort Worth Bank & Trust,
487 U.S. 977 (1988); Connecticut v. Teal, 457 U.S. 440
(1982); Hazelwood School District v. United States,
433 U.S. 299 (1977).

The question presented by this case raises important and
recurring issues in all civil rights cases. Whether claims
brought pursuant to the Age Discrimination in Employment
Act, 29 U.S.C. §§ 621-634 (1990). (“ADEA”) are subject to
compulsory arbitration is an issue that potentially affects
every case of employment discrimination brought under a

' Pursuant to Rule 37.3, written consents of the parties to the sub-
mission of this brief as amicus curiae are on file with the Clerk of the
Supreme Court.

2

federal employment discrimination statute which provides
for resolution of claims through the courts, and particularly
Title VII of the Civil Rights Act of 1964 (“Title VII"),
42 U.S.C. §§ 2000e to -17 (1990), the principal focus of the
Lawyers’ Committee's activities.

This Court’s decision will undoubtedly have far reaching
and important implications for present and future employ-
ment discrimination cases in which the Lawyers’ Committee
participates. Morcover, the Lawyers’ Committee has a long-
standing interest in persuading the Court to adopt principles
that will result in the sound administration of the discrimina-
tion laws, so that findings of liability will be obtainable by
persons with legitimate claims and limited resources. Finally,
the Lawyers’ Committee also brings the Court the benefit of
its actual experience in litigating numerous employment dis-
crimination cases, and is therefore in a position to discuss the
relative advantages and disadvantages of resolution of such
cases through arbitration as opposed to the court system.

SUMMARY OF ARGUMENT

In Gilmer, the Fourth Circuit Court of Appeals held that
this Court’s decisions in Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614 (1985); Shear-
son/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, 104 L.Ed. 2d 526
(1989) endorsing arbitration as a means to resolve commer-
cial disputes had sub silentio overruled this Court's well-
established pronouncements that arbitration cannot be a
compulsory remedy in employment rights cases. E.g., Alex-
ander v. Gardner-Denver Co., 415 U.S. 36 (1974) (Title VII);
Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S.

3

728 (1981), cert. denied, 471 US. 1054 (1985) (Fair Labor
Standards Act); McDonald v. City of West Branch, 466 U.S.
284 (1984) (28 U.S.C. § 1983).

The Fourth Circuit’s ruling is wrong and should be
reversed by this Court.? First, the Fourth Circuit failed to
recognize, contrary to this Court's express holdings in Gard-
ner-Denver, Barrentine and McDonald, that employment
rights cases are different from commercial disputes. There
are public interests at issue in civil rights cases that mandate
public resolution in the courts, with the full panoply of proce-
dural rights and remedies available there that arbitration sim-
ply does not provide. In short, Gardner-Denver and its
progeny are still good law and the Fourth Circuit erred by
assuming they had been silently overruled by Mitsubishi,
McMahon and Rodriguez.

Second, the Fourth Circuit’s ruling ignores the fact that,
as this Court explained in Gardner-Denver, however well-
suited arbitration might be for the resolution of private com-
mercial disputes, arbitration is not an appropriate forum for
adjudicating civil rights violations.

Third, the Fourth Circuit’s holding ignores the funda-
mental inequality in bargaining between employers and
employees. It cannot fairly be assumed that prospective

waivers by individual employees of court remedies in favor of
arbitration are knowing or voluntary.

2 Indeed, it is worth noting that every Circuit that has considered the
issue has ruled exactly opposite to Gilmer and refused to order compul-
sory arbitration in employment rights cases. E.g., Alford v. Dean Witter
Reynolds, 905 F.2d 104 (Sth Cir. 1990) (Title VII); Utley v. Goldman
Sachs & Co., 883 F.2d 184 (ist Cir. 1989), cert. denied, US.

, 110 S. Ct. 842 (1990) (Title VII); Nicholson v. CPC Interna-
tional, Inc., 877 F.2d 221 (3d Cir. 1989) (ADEA); Swenson v. Manage-
ment Recruiters International, Inc., 858 F.2d 1304 (8th Cir. 1988), cert.
denied, US. ,1108.Ct. 143 (1989) (Title VII); Johnson v. Univer-
sity of Wisconsin - Milwaukee, 783 F.2d 59 (7th Cir. 1986) (ADEA).

4

Finally, the Fourth Circuit's approach to statutory inter-
pretation is artificial and stilted. In effect, the Fourth Circuit
ruled that, unless Congress had expressly stated that court
remedies could not be waived by an agreement to arbitrate,
Mitsubishi and the Federal Arbitration Act (“FAA”), 9
U.S.C. §§ 1-15 (1990), require the strict enforcement of pri-
vate contracts to arbitrate. That ruling ignores the FAA’s
own exclusion of employment disputes from its reach and,
even more significantly, Congress’ oft-expressed insistence on
the necessity for court remedies for civil rights violations as
set forth in, among other places, Title VII and its legislative
history.

In this amicus brief, we focus the foregoing arguments
on the Title VII model. This Court has often observed that
the substantive provisions of the ADEA are “derived in haec
verba from Title VII’ and that Title VII precedents apply
“with equal force” to ADEA claimants. Trans World Air-
lines, Inc. v. Thurston, 469 U.S. 111, 121 (1985); Oscar Mayer
and Co. v. Evans, 441 U.S. 750, 756 (1979); Lorillard v. Pons,
434 U.S. 575, 584 (1978). Indeed, the similarities between
the ADEA and Title VII are substantial. Both statutes seek to
eliminate discrimination in the work place, albeit on different
bases; both statutes rely upon the conciliation procedures of
the Equal Employmert Opportunity Commission (“EEOC”);
and both statutes provide for civil actions in the courts to
remedy and enjoin discriminatory employment practices and
procedures. Compare 42 U.S.C. § 2000e-2(aX2) (1990) and
29 U.S.C. § 623(aX2) (1990); 42 U.S.C. § 2000e-5S(f) (1990)
and 29 U.S.C. § 626(b) (1990); and 42 U.S.C. § 2000e-5(f)
(1990) and 29 U.S.C. § 626(d) (1990). Moreover, the Law-
yers’ Committee has extensive experience in litigating Title
VII cases in the trial and appellate courts. That experience
convincingly demonstrates that, contrary to the Fourth Cir-
cuit’s ruling, employment rights cases—whether brought
under ADEA, Title VII or any other civil rights stat-
ute—belong in the courts, not compulsory arbitration.

5

In sum, we respectfully submit that this Court should
reafirm Gardner-Denver, Barrentine and McDonald and
reverse the Fourth Circuit’s decision in Gilmer.

ARGUMENT

I. THE FOURTH CIRCUIT’S DECISION ALLOWING
COMPULSORY ARBITRATION OF ADEA CLAIMS
DISREGARDS THIS COURT’S HOLDINGS IN
GARDNER-DENVER, MCDONALD, AND BARREN-
TINE AND IS CONTRARY TO THE LEGISLATIVE
INTENT OF FEDERAL CIVIL RIGHTS STATUTES.

In Gilmer, the Fourth Circuit held that this Court’s
recent endorsement of private arbitration in commercial
cases in Mitsubishi, McMahon and Rodriguez effectively
overruled this Court’s earlier rejection of compulsory arbitra-
tion in the employment rights area in Gardner-Denver, Bar-
rentine and McDonald. Gilmer, 895 F.2d at 201-02. The
Fourth Circuit further held that, applying the statutory inter-
pretation test espoused by Mitsubishi, it could find no evi-
dence in ADEA of a Congressional preference for court
remedies over arbitration. The Fourth Circuit also summa-
rily rejected the argument that civil rights cases are different
from commercial disputes with respect to the federal court’s
deference to arbitration. Accordingly, the Fourth Circuit
enforced a broadly worded arbitration clause in the employ-
ment contract signed by Mr. Gilmer six years before he was
allegedly terminated unlawfully due to his age, and sent him
to arbitration.’

The Fourth Circuit first stated its broad reading of Mit-
subishi and its progeny:

. This appeal thus addresses the enforceability of prospective waivers
of judicial remedies. It does not implicate agreements to arbitrate
reached after the dispute has arisen.

6

In a trilogy of recent cases, Mitsubishi Motors
Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614,
105 S. Ct. 3346, 87 L.Ed. 2d 444 (1985); Shear-
son/American Express, Inc v. McMahon, 482 U.S.
220, 107 S. Ct. 2332, 96 L.Ed. 2d 185 (1987); and
Rodriguez de Quijas v. Shearson/American Express,
Inc., US. 109 S. Ct. 1917, 104 L.Ed. 2d 526
(1989), the Supreme Court has endorsed arbitration
as an effective and efficient means of dispute resolu-
tion . . . . An arbitration agreement is unenforce-
able [under Mitsubishi and its progeny] only if
Congress has evinced an intention to preclude
waiver of the judicial forum for a particular statu-
tory right, or if the agreement was procured by fraud
or use of excessive economic power.

7

Gilmer points to three cases decided before the
Supreme Court’s recent trilogy and argues that those
cases are controlling here [citing Gardner-Denver,
Barrentine and McDonald]... . .

We find these cases inapposite. First, none of the
three even mention the FAA... .. .

Second, Gardner-Denver, Barrentine and McDon-
ald all involved arbitration under collective bargain-
ing agreements . . . [C]oncern about the divergent
interests of employee and union simply does not
exist where, as in Gilmer’s case, the individual
employee has agreed to arbitration... . .

For the foregoing reasons we think it clear that
Gardner-Denver, Barrentine, and McDonald do not

control our decision here.

The Fourth Circuit next rejected the contention that 895 F.2d at 201-02.
ADEA's text or regent history evidenced a preference for ) Finally, the Fourth Circuit rejected the notion that there
a judicial forum: is a distinction between commercial disputes and employ-
We find nothing in the text, legislative history, or ment rights cases for purposes of enforcing arbitration
underlying purposes of the ADEA indicating a con- agreements: 4

895 F.2d at 196-97.

gressional intent to preclude enforcement of arbitra-
tion agreements. Arbitration is nowhere mentioned
in the text of the statute, and “[tJhis silence in the
text is matched by silence in the statute’s legislative
history.” . . . Moreover, 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 (citations omitted).

The Fourth Circuit also summarily dismissed the con-
tinued vitality of Gardner-Denver and its line of cases:

We remain sensitive to the fact that the context in
which this case arises differs somewhat from the
contexts of Mitsubishi, McMahon and Rodriguez.
Whereas the statutes in those cases were primarily
commercial in focus, the ADEA is a civil rights stat-
ute. Moreover, the complainants in those cases were
securities customers and persons injured by anti-
trust violations, not employees who are allegedly
victims of discrimination in the workplace.
Although the beneficiaries of statutory protections
~ vary, the principles of statutory interpretation

O not.

895 F.2d at 203.

The Fourth Circuit’s reasoning, we respectfully submit,
is fatally flawed. Civil rights actions, unlike private commer-
cial disputes, involve public interests that require judicial
resolution; for that reason alone, Gardner-Denver and its
progeny remain good law, notwithstanding the Mitsubishi
trilogy of cases. Moreover, as this Court properly recognized
in Gardner-Denver, arbitration simply does not provide ade-
quate procedural and substantive protections for civil rights
cases. Nor can it be said that individual employees, such as
Mr. Gilmer, knowingly and voluntarily waived their right to a
judicial forum for their civil rights claims. Finally, the statu-
tory language and legislative history of the FAA and civil
rights statutes such as Title VII evidence an unambiguous
Congressional preference for judicial remedies.

A. There are Significant Differences Between Civil Rights
and Commercial Disputes That Warrant a Lesser
Deference to Arbitration.

The substantive issue in Mitsubishi was a breach of con-
tract and aniitrust dispute between an automobile manufac-
turer and a car dealer. Mitsubishi, 473 U.S. at 616-20.
Similarly, the underlying substantive issues in both McMa-
hon, 482 U.S. at 222 and Rodriguez, 490 U.S. 477, 104 L.Ed.
2d 526, 533, were alleged violations of the securities laws. At
bottom, each of those cases centered upon a private litigant’s
claim for money damages.‘

4 Indeed, the Mitsubishi Court rejected a claim by the plaintiff that
its antitrust claim raised important public policy issues that should not
be sent to private arbitration:

Notwithstanding its important incidental policing function, the
treble-damages cause of action conferred on private parties by § 4
(footnote continues)

9

As this Court has often stated, however, civil rights cases
are different. Civil rights cases necessarily implicate issues of
public importance that require the public forum of a court-
room and the wide discretion that only a court has to fashion
remedies that go beyond the interests of the private litigants
in order to eradicate employment discrimination in this
country. Civil rights issues should not be addressed in the
relative privacy of arbitration before decisionmakers empow-
ered only to resolve the particular private dispute before
them. Thus, in /nternational Brotherhood of Teamsters v.
United States, 431 U.S. 324 (1977), this Court noted in the
Title VII context that: “The primary purpose of Title VII was
‘to assure equality of employment opportunities and to elimi-
nate those discriminatory practices and devices which have
fostered racially stratified job environments to the disadvan-
tage of minority citizens’.” Jd. at 348-49 (citations omitted).

In Teamsters, this Court emphasized the importance of
the courts in enforcing Title VII's legislative mandate to erad-
icate discrimination:

In Griggs v. Duke Power Co., and again in
Albermarle, the Court noted that a primary objective

of Title VII is prophylactic: to achieve equal

employment opportunity and to remove the barriers

that have operated to favor white male employees

(footnote continued)
of the Clayton Act, 15 U.S.C. § 15 and pursued by Soler here by
way of its third counterclaim, seeks primarily to enable an injured
competitor to gain compensation for that injury.

Mitsubishi, 473 U.S. at 635.

Similarly, in McMahon, this Court rejected the argument that
claims brought under the Racketeer Influenced Corrupt Organizations
Act (“RICO”), 18 U.S.C. § 1962 et seg., involved public policy issues
that should not be sent to arbitration, holding that RICO claims are
also mere private money damages claims. McMahon, 482 U.S. at 240-
42.

10

over other employees . . . . An equally important
purpose of the Act is ‘to make persons whole for
injuries suffered on account of unlawful discrimina-
tion.” In determining the specific remedies to be
afforded, a district court is ‘to fashion such relief as
the particular circumstances of a case may require to
effect restitution.’
Thus, the Court has held that the purpose of Con-
gress in vesting broad equitable powers in Title VII
courts was “to make possible the ‘fashion{ing] [of]
the most complete relief possible,’ and that the dis-
trict courts have ‘not merely the power but the duty
to render a decree which will so far as possible elimi-
nate the discriminatory effects of the past as well as
bar like discrimination in the future.’ ”
Id. at 364 (citations omitted). See also Albemarle Paper Co. v.
Moody, 422 U.S. 405, 420-21 (1975) (“Congress’ purpose in
vesting a variety of ‘discretionary’ powers in the courts
was .. . to make possible the fashion{ing] [of] the most
complete relief possible’’).

In short, in each and every civil rights employment case,
there is a public interest present that goes beyond simply
making the plaintiff-victim whole and cequires the fashioning
by a court of a broad remedy designed to prevent any further
discrimination. It is the public policy of the United States, as
enacted in Title VII, ADEA and other civil rights statutes, to
eliminate discrimination from the workplace. That public
policy can only be vindicated in the courts; the private rem-
edy of arbitration can never adequately address that public
interest. As this Court succinctly stated in Gardner-Denver:

The private right of action remains an essential
means of obtaining judicial enforcement of Title

VII. Jn such cases, the private litigant not only

a

—-

redresses his own injury but also vindicates the impor-
tant congressional policy against discriminatory
employment practices.

Gardner-Denver, 415 U.S. at 45 (citations omitted; emphasis
added).

B. The Courts are Far Better Suited Than Private

Arbitrators to Adjudicate Employment Discrimination
Claims.

As this Court expressly held in McDonald v. City of West
Branch, 466 U.S. 284, 290 (1984)—which, notably, was
decided only one year before Mitsubishi—“although arbitra-
tion is well-suited to resolving contractual disputes .. . it
cannot provide an adequate substitute for a judicial proceed-
ing in protecting the federal statutory and constitutional
rights that § 1983 [and other civil rights statutes are] designed
to safeguard.”

First, the federal courts have greater expertise in adjudi-
cating Title VII claims. While arbitrators are experienced in
labor contract and other commercial disputes, they are not, as
a group, well versed in the complexities of Title VII jurispru-
dence. Moreover, arbitraiors perform a role different from
courts in that they are charged with effectuating the intent of
the parties under a contract rather than enforcing the require-
ments of ADEA, Title VII or any other civil rights statute.
See Gardner-Denver, 415 U.S. at 57. Indeed, where the col-
lective bargaining agreement or other employment contract
conflicts with the dictates of ADEA or Title V1, the arbitra-
tor must apply the provisions of the agreement to enforce its
terms. As this Court observed in McDonald, the arbitrator's
expertise “pertains primarily to the law of the shop, not the
law of the land.” 466 U.S. at 290; see also Barrentine, 450
U.S. at 743; Gardner-Denver, 415 U.S. at 57. As noted in
Gardner-Denver:

12

Parties usually choose an arbitrator because they
trust his knowledge and judgment concerning the
demands and norms of industrial relations. On the
other hand, the resolution of statutory or constitu-
tional issues is a primary responsibility of courts,
essary with respect to Title VII, whose broad lan-
guage frequently can be given meaning only by
reference to public law concepts.

415 USS. at 57.

Second, unlike judges, a “substantial proportion of .. .
arbitrators are not lawyers.” Barrentine, 450 U.S. at 743 n.
21. These non-lawyer arbitrators cannot be expected to be
familiar with the extensive body of law interpreting Title VII.
Issues arising under Title VII, ADEA and other civil rights
statuies must be resolved in light of volumes of legislative
history and decades of legal interpretation. Though an arbi-
trator may be competent to resolve many preliminary factual
questions, he may lack the competence to decide the ultimate
legal issue in a civil rights case. See Barrentine, 450 US. at
743. That lack of competence is unacceptable in cases of such
paramount public concern.

In addition, even if competent to resolve the complex
legal issues presented by civil rights cases, arbitrators can add
nothing to the development of the law in the civil rights area,
and may even detract from that development. Arbitration
decisions are not often publicly reported and they conse-
quently cannot contribute to either the public knowledge of
discrimination law or the ever-growing body of decisions that
guide law-abiding employers in their personnel decisions.
Further, because arbitrators are not bound by the principles
of stare decisis, they necessarily will detract from legal cer-
tainty in the employment discrimination field. Thus, manda-
tory submission of Title VII and ADEA claims to arbitration

13

will frustrate rather than further the “legislative purposes” of
federal civil rights statutes, which “require[s] . . . the prin-
cipled application of standards consistent with those pur-
poses . . . . Important national goals would be frustrated by
a regime of discretion than ‘produce[d] different results for
breaches of duty in situations that cannot be differentiated in
policy.” ” Albermarle, 422 U.S. at 417 (citation omitted).

Third, unlike the courts, arbitrators lack the authority to
enforce fully the important individual rights protected by
Title VII. An arbitrator’s power is both derived from, and
limited by, the collective bargaining agreement or other con-
tract. McDonald, 466 U.S. at 290; Barrentine, 450 U.S. at
744; Gardner-Denver, 415 U.S. at 53. Arbitrators lack the
broad discretionary power granted to the courts by Title VII
and ADEA. In Gardner-Denver, this Court recognized the
severe limitations on the authority of the arbitrator to stray
from the employment agreement to invoke public laws that
conflict with the contract between the parties:

{A]n arbitrator is confined to interpretation and

application of the collective bargaining agreement;

he does not sit to dispense his own brand of indus-

trial justice. He may of course look for guidance

from many sources, yet his award is legitimate only

so long as it draws its essence from the collective

bargaining agreement. When the arbitrator’s words

manifest an infidelity to this obligation, courts have

no choice but to refuse enforcement of the award.
415 U.S. at 53 (quoting United Steelworkers of America v.
Enterprise Wheel & Car Corp., 363 U.S. 593, 597 (1960)); see
also McDonald, 466 U.S. at 291-92; Barrentine, 450 U.S. at
744. Accordingly, if the individual rights guaranteed by
ADEA or Title VII conflict with the parties’ employment
agreement, the arbitrator must enforce the agreement even if

14

to do so requires a ruling contrary to the public policies
underlying Title VII. McDonald, 466 U.S. at 291; Barrentine,
450 U.S. at 744.

Arbitrators also lack the power that courts have to hold a
recalcitrant defendant in contempt, both during and after
Title VII or ADEA actions, for willfully refusing to obey court
orders. 42 U.S.C. § 2000e-5 (1964).

Fourth, subsequent judicial review of an arbitrator's
decision is severely limited. An arbitrator’s decision is final
and binding on the employer and employee, thereby prohibit-
ing de novo review by the courts. Gardner-Denver, 415 U.S. at
54. Moreover, arbitrators have no obligation to any reviewing
court to give reasons for their decision or award. See McDon-
ald, 466 U.S. at 290-91; Gardner-Denver, 415 U.S. at 57-58.
Accordingly, the role of the appellate courts in developing
and articulating the important public policies at issue in Title
VII, ADEA and other civil rights cases would be sharply
circumscribed, if not almost entirely eliminated, by a rule
that allowed employers routinely to insert enforceable arbi-
tration clauses into employment contracts.

Finally, the procedural tools available to Title VII,
ADEA and other civil rights claimants in judicial proceedings
are not available in arbitration, which is, as a result, an inade-
quate substitute for judicial factfinding. McDonald, 466 U.S.
at 291-92; Barrentine, 450 U.S. at 738; Gardner-Denver, 415
U.S. at 57-58. As the McDonald Court observed:

{A}rbitral factfinding is generally not equivalent to
judicial factfinding. As we explained in Gardner-

Denver, “[t}he record of the arbitration proceedings

is not as complete; the usual rules of evidence do not

apply; and rights and procedures common to civil

trials, such as discovery, compulsory process, cross-

15

examination, and testimony under oath, are often
severely limited or unavailable.” 415 U.S. at 57-58,
94S. Ct. 1011, 39 L.Ed. 2d 147.

466 U.S. at 291.

The absence of court procedures in arbitrations limits
the remedies available under ADEA, Title VII and other civil
rights statutes and promotes inefficiency, if not injustice. For
example, the class action device under Rule 23 of the Federal
Rules of Civil Procedure provides for the resolution of multi-
ple claims of discrimination in a single action. The class
action procedure also permits the court to fashion a class-
wide remedy affecting numerous employees nationwide.
There is no similar procedure in arbitration. Absent the class
action device, many meritorious employment discrimination
complaints may well go unremedied, either because (a) none
of the individual claims warrants the expense of a contested
arbitration proceeding or (b) the lack of any possible attor-
neys’ fee award discourages lawyers from bringing such
claims on behalf of discrimination victims.

In sum, as this Court has already recognized, arbitration
is not an appropriate forum for the resolution of the critically
important public and private interests at stake in employ-
ment discrimination cases. Gardner-Denver and its progeny
were correctly decided; the Fourth Circuit erred in conclud-
ing that Mitsubishi, McMahon and Rodriguez sub silentio
overruled those decisions; and this Court should reaffirm the
continued viability of Gardner-Denver and its line of cases.

C. The Inequality of Bargaining Leverage Between
Employers and Employees Justifies Less Deference to the
FAA.

In Gilmer, the Fourth Circuit distinguished Gardner-
Denver and its progeny, in part, on the ground that those cases
arose in the context of collective bargaining agreements,

—

16

whereas this case arises out of an individual employment
contract. 895 F.2d at 201. That distinction misses the point.
The individual employment contract situation presents a
more, not less, compelling reason to disfavor a claimed
waiver of judicial remedies in favor of arbitration.

Unlike the usual presumption in commercial cases, it is
virtually always the case in employment rights disputes that
the employer has substantially greater bargaining leverage
than does the employee. That is, in fact, the fundamental
premise of this nation’s labor laws. As Congress recognized
in enacting the Norris-La Guardia Act, “the individual unor-
ganized worker is commonly helpless to exercise actual lib-
erty of contract and to protect his freedom of labor, and
thereby to obtain acceptable terms and conditions of employ-
ment.” 29 U.S.C. § 102 (1973). See also Barrentine, 450 U.S.
at 735.

Thus, when an employer insists upon a broad arbitration
clause in an individual employment contract, the employee
ordinarily has little choice but to agree and, in most instances,
little knowledge of the statutory rights he is giving up. Con-
trary to the Fourth Circuit’s conclusion, that is all the more
reason to be suspicious of arbitration clauses in individual
employment contracts and to hold, as this Court did in Gard-
ner-Denver, that an employee’s right to a judicial forum in
civil rights cases is “not susceptible of oreranie waiver.”
415 US. at 51-52. .

D. The Text and Legislative History of the FAA and Title
VII Amply Demonstrate a Congressional Preference for
a Judicial Remedy.
Even in commercial cases, the Mitsubishi decision recog-
nized that the presumption in favor of arbitration is not
irrebuttable:

That is not to say that all controversies implicat-
ing statutory rights are suitable for arbitration.

17

There is no reason to distort the process of contract
interpretation, however, in order to ferret out the
inappropriate. Just as it is the congressional policy
manifested in the Federal Arbitration Act that
requires courts liberally to construe the scope of
arbitration agreements covered by that Act, 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 arbi-
trate will be held unenforceable.

Mitsubishi, 473 U.S. at 627.

In the employment context, there is ample evidence ir
the text and legislative history of the FAA and Title YTl to
lead inescapably to the conclusion that employment di® +» :i-
nation cases should be heard in the courts, rather thax in
arbitration. For that reason alone, the Fourth Circuit’s deci-
sion in Gilmer should be reversed.

1. The FAA exempts employment disputes.

The Fourth Circuit’s decision in Gilmer was expressly
predicated on the “federal policy favoring arbitration”
enacted in the Federal Arbitration Act. Gilmer, 895 F.2d at
201. Section 1 of the FAA, however, explicitly excludes from
the Act all “contracts of employment of seamen, railroad
employees, or any other class of workers engaged in foreign or
interstate commerce.” 9 U.S.C. § 1 (emphasis added).

The unambiguous intent of Section | of the FAA is to
exempt from the federal policy favoring arbitration employ-
ment contracts of workers engaged in interstate commerce.°

5 The purpose of Section | to exclude all employment contracts from
the FAA is apparent from the plain language of the statute. That pur-
pose is confirmed by the legislative history of Section | which is dis-
cussed in detail in the Amicus Brief of the American Association of
Retired Persons.

18

Although some courts of appeals long ago held that Section :
of the FAA applied only to workers in the transportation
industry, that conclusion was based upon an incomplete read-
ing of the legislative history and ignored the plain language of
Section |. See, e.g., Tenney Engineering, Inc. v. United Elec-
trical, Radio and Machine Workers’ of America, 207 F.2d 450
(3d Cir. 1953) (en banc). More recently, however, this Court
and several lower federal courts have recognized that the
employment contract exemption of Section | of the FAA is
far broader than the transportation industry and in fact cov-
ers collective bargaining agreements in all industries engaged
in interstate commerce. See, e.g., United Paperworkers Int’!
Union, AFL-CIO v. Misco, Inc., 484 U.S. 29 n.9 (1987); Occi-
dental Chemical Corp. v. Int'l Chemical Workers Union, 853
F.2d 1310, 1315-16 (6th Cir. 1988); American Postal Workers
Union v. United States Postal Service, 823 F.2d 466, 469 (11th
Cir. 1987); Derwin v. General Dynamics Corp., 719 F.2d 484,
488 n.3 (1st Cir. 1983). Although the issue has not yet arisen
in any decision by this Court, it is equally clear that Section |
of the FAA exempts individual employment contracts. In
short, Section | of the FAA itself evidences Congress’ intent
to exempt employment rights disputes from compulsory
arbitration.

2. The legislative history of TYtle VII evidences a clear
preference for judicial remedies.

In enacting Title VII, the model for ADEA,*® Congress
made plain that its purpose in passing employment rights
legislation was not just to adjudicate private wrongs and rem-
edies but also to eradicate discrimination at all levels of
employment, nationwide. As the 1964 Report of the House
Committee on Education and Labor explained:

® As discussed above, the legislative history and judicial construc-
tion of Title VII are directly relevant to the interpretation of ADEA, as
this Court has often recognized. See p. 4, supra.

cc MT en

19

The committee finds that testimony ‘ece:ved
regarding the need for this legislation cowid scarcely
be mors cogent and convincing. The conclusion
inescapably to be drawn from 98 witnesses in 12
days of hearings, held in various sections of the
country as well as in Washington, and from many
statements filed without oral testimony, is that in all
likelihood fully 50 percent of the people of the
United States in search of employment suffer some
kind of job opportunity discrimination because of
their race, religion, color, national origin, ancestry,
or age. It shculd be made clear that the evidence
poured in from all parts of the Nation - East, West,
North, and South. This act cannot then be viewed as
an act intended merely to correct abuses in any one
section of the country. Clear enunciation and imple-
mentation of a national policy on equal employment
opportunity are obviously long overdue at this point
in the history of the United States.

In short, this act proposes active steps toward
achievement of basic constitutional and moral trans-
forming from the theoretical into the actual the fun-
damental principles which are the very foundation of
American democracy - and undertakes to remove
deficiencies and to attain positive benefits necessary
to internal well-being and to continued world
leadership.

H.R. Rep. No. 1370, 87th Cong., 2d Sess. 1-2, 5(1962),
(reprinted in Legislative History of Titles VII and XI of Civil
Rights Act of 1964 at 2155-56, 2159 (emphasis added).

In enacting Title VII, Congress relied upon the availabil-
ity of federal court actions to achieve its goal of eliminating
employment discrimination. As explained by Mr. Justice
Powell, writing for the Court in Gardner-Denver:

— 20

Congress enacted Title VII . . . to assure equal-
ity of employment opportunities by eliminating
those practices and devices that discriminate on the
basis of race, color, religion, sex, or national ori-
gin . . Cooperation and voluntary compliance
were selected as the preferred means for achieving
this goal. To this end, Congress created the Equal
lished a procedure whereby existing state and local
equal employment opportunity agencies, as well as
the Commission, would have an opportunity to set-
tle disputes through conference, conciliation, and
aa creat tate
to file a lawsuit .

Even in its amended form, however, Title VII
does not provide the Commission with direct pow-
ers of enforcement. The Commission cannot adju-
dicate claims or impose administrative sanctions.
Rather, final responsibility for enforcement of Title
VII is vested with federal courts. The Act authorizes
courts to issue injunctive relief and to order such
affirmative action as may be appropriate to remedy
the effects of unlawful employment practices... .
Taken together, these provisions make plain that fed-
eral courts have been assigned plenary powers to
secure compliance with Title VII.

415 US. at 44-45 (citations omitted; emphasis added).

Indeed, the legislative history of the 1972 Equal Employ-
ment Opportunities Enforcement Act is replete with refer-
ences to the particular qualities of federal courts which, in
Congress’ judgment, made them the best forum for adjudicat-
ing civil rights cases. For example, the 1972 House Commit-
tee on Education and Labor Report states:

21

The problem Title VII seeks to correct is not one
susceptible to the kind of policy balancing that is
usual in the administration of law regulating utilities
or other situations involving competing interests.
Racial discrimination does not occupy the status of
an “interest” under our system of law. It is a grave
injustice which should be eliminated in as quick and
efficient a manner as possible.

The appropriate forum to resolve civil rights ques-
tions, questions of employment discrimination as
well as such matters as public accommodations,
school desegregation, fair housing, and voting rights,
is a court. Civil rights issues usually arouse strong
emotions. United States district court proceedings
provide procedural safeguards: [ederal judges are
well known in their areas and enjoy great respect; the
forum is convenient for the litigants and is impar-
tial; the proceedings are public, and the judge has
power to resolve the problem and fashion a com-
plete remedy.

The district court approach has a great advantage
over an administrative hearing procedure in securing
the needed evidence. The Federal Rules of Civil Pro-
cedure, with respect to discovery, would greatly
facilitate the collection of evidence for trial... .
Discovery procedures take less time than adminis-
trative fact-gathering techniques, and the contempt
powers of the court operate to inhibit any intimida-
tion of witnesses, which is a rather difficult problem
that is often real, but seldom apparent.

22

H.R. Rep. No. 92-238, 92d Cong., Ist Sess. 62-63 (1971),
(reprinted in Legislative History of the Equal Employment
Opportunity Act of 1972 at 62-63) (1972) (emphasis added)
(hereinafter “1972 Act Legis. Hist.”’).

During Congressional debate of the 1972 amendments
to Title VII, Congress’ insistence on the availability of a fed-
eral court remedy was frequently expressed. Thus, in favor-
ing judicial enforcement over cease and desist power vested
in the EEOC, Congressman Erlenborn noted:

There are those who say that the cease-and-desist
approach is much preferable; that the courts cannot

do the job of guaranteeing equal opportunity for

employment .. . . [I}f the courts are so inefficient

and unable to grant relief in this area, why is it that
over the past many years great strides have been
made in the civil rights field primarily through [the]

Federal courts?

1972 Act Legis. Hist. at 248.

Congressman Gerald R. Ford made a similar
observation:

In this kind of situation [Title VII cases], discre-
tion is very, very important. I happen to believe the
system of justice in the courts is‘ better forum for
that, rather than leaving it in the hands of an agency
which has the right to investigate, to prosecute, to
make a decisioa and then to enforce it. I strongly
prefer the use of the courts for enforcement, rather
than the agency itself.

1972 Act Legis. Hist. at 263.

Likewise, in the Senate, Senator Dominick, the leading
proponent of an amendment requiring federal court enforce-
ment instead of agency cease and desist power, explained his
preference for a judicial remedy as follows:

23

This approach is superior for several reasons.
First it provides a combination of the expertise of
the EEOC in investigating, processing, and concili-
ating unfair employment cases with the expertise
and independence of the Federal courts. The equal
employment area is one which produces strong emo-
tions among all parties . . . . J believe that these
strong emotions should be tempered by restraint
when the adjudication of rights is at issue. The Fed-
eral courts are best able to provide the tempering
restraint which will allow for a rational resolution of
the issues of any given case.

1972 Act Legis. Hist. at 333.

There are many advantages to allowing the courts
to decide whether ~. .ot a charge [of discrimination]
has been substam:ated and then let it issue and
enforce the cease-and-desist order. First of all, it is a
fact that the courts have done a good job in dealing
with civil rights questions, including Title VII ques-
tions. This use of the courts would assure an impar-
tial tribunal, thus guaranteeing each side the due
process of law.

1972 Act Legis. Hist. at 682 (emphasis added).

Similarly, Senator Fannin observed that “t]he district
court judges have shown in recent years their capacity to
resolve civil rights disputes . . . because of the respect with
which the Federal judiciary is viewed, their decisions have
greater immediate impact and moral sanctions than would
the decision of an executive administrative agency.”

1972 Act Legis. Hist. at 699.

24

In short, Congress’ insistence upon the resolution of
employment discrimination cases, as evidenced by the legis-
lative history of Title VII, is beyond dispute. To be sure,
there is no explicit reference to a preference for a judicial
remedy over arbitration in the text of Title VII or ADEA. But
that reflects a distinction without a difference. It is facile at
vest to suggest, as did the Fourth Circuit in Gilmer, that a
choice of a judicial rather than administrative forum “says
nothing about Congress’ attitude toward arbitration.” 895
F.2d at 199. Each of the reasons expressed by Congress in
1972 for preferring the courts over an EEOC remedy applies
just as well to the arbitration alternative: The courts are
public while administrative proceedings are private; the
courts receive far greater public respect as a general rule than
do arbitrators; the Federal Rules of Civil Procedure provide
far greater discovery rights than are « ailable in arbitration;
and the courts have greater remedial , wers, and experience
in employing those powers in the employment discrimination
field, than do arbitrators.

CONCLUSION

The Fourth Circuit’s decision in Gilmer, if allowed to
stand by this Court, could well sound a death knell for the
public, judicial enforcement of anti-employment discrimina-
tion laws in this country. If the Fourth Circuit’s ruling is not
reversed, employers can be expected to include as a matter of
course in their employment contracts broad arbitration
clauses and to insist upon the arbitration of all employment
discrimination disputes. In that fashion, employers will
escape the extensive discovery so often needed to prove a
discrimination case, see Wards Cove Packing Co. v. Atonio,
490 U.S. 642 (1989), the public scrutiny of a court trial aiid
the power of the court system to fashion wide-ranging reme-
dies in order to eliminate past and future discrimination.

25

This Court, we submit, should not countenance such a
reversal in this country’s commitment to equal employment
opportunity. The availability of a judicial forum for the
resolution of employment discrimination disputes is, and
always has been, essential to the enforcement of ADEA, Titie
VII and all other civil rights statutes. The Fourth Circuit's
decision in Gilmer should be reversed and the continuing
viability of Gardner-Denver and its progeny affirmed.

Respectfully submitted,

ROBERT F. MULLEN ALAN E. KRAUS*

DAVID S. TATEL NICHOLAS peB. KATZENBACH
Co-Chairmen LAURA J. LOKKER
PETER C. HARVEY

NORMAN REDLICH
T RIKER, DANZIG, SCHERER,

rustee HYLAND & PERRETTI
BARBARA R. ARNWINE Headquarters Plaza
THOMAS or HENDERSON One Speedwell Avenue
RICHARD T. SEYMOUR Morristown, N.J.

07962-1981

LAWYERS’ COMMITTEE FOR (201) 538-0800

Washington, DC 20005
(202) 371-1212

Attorneys for Amicus Curiae
Lawyers’ Committee for Civil Rights
Under Law

November 15, 1990

*Counsel of Record.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0001%3A09. Public record. Not legal advice.