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

In THE

Supreme Court of the United States

OCTOBER TERM, 1990

ROBERT D. GILMER,

.. Petitioner,

Y

aA

&

INTERSTATE/ JOHNSON LANE CORPORATION,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

ae

~

“J > eee -_,

BRIEF AMICUS CURIAE OF THE CHAMBER OF

ms COMMERCE OF THE UNITED STATES OF AMERICA

re. IN SUPPORT OF THE RESPONDENT

hy

ue Of Counsel: PETER G. NASH *

‘ STEPHEN A. BOKAT Dixie L. ATWATER

Mona C. ZEIBERG MICHAEL J. MURPHY

NATIONAL CHAMBER OGLETREE, DEAKINS, NASH,

LITIGATION CENTER, INC. SMOAK & STEWART

1615 H Street, N.W. 2400 N Street, N.W.

Washington, D.C. 20062 Washington, D.C. 20037

: (202) 463-5337 (202) 887-0855

‘ Counsel for the Chamber of

4 Commerce of the

zi United States of America,

oA Amicus Curiae

* Counsel of Record

..

*

:

-

Ps

e

-

WILSON - Eres PrinTING Co., Inc. - 789-0096 - WASHINGTON, D.C. 20001

TABLE OF CONTENTS

TABLE OF AUTHORITIES ..22002.22202.22.....ccccecceeeeeees

INTEREST OF THE AMICUS CURIAE |...

SUMMARY OF THE CASE 0022.2... .ceccceceeeeeee ee

SUMMARY OF ARGUMENT .......0

A REREEREES SHER We on So

THE FAA MANDATES ENFORCEMENT OF

INDIVIDUAL ARBITRATION AGREEMENTS

WITH RESPECT TO STATUTORY EMPLOY-

MENT DISCRIMINATION CLAIMS .....

A. The FAA Trilogy Establishes that Statutory

Claims Must Be Arbitrated Absent a Showing

of Contrary Congressional Intent .............-........

B. The Rationale of Alexander v. Gardner-Denver

and Its Progeny Is Inapplicable to the Issue

of Whether Claims Arising Under Federal Em-

ployment Discrimination Statutes Are Arbitrable

Pursuant to an Individual Arbitration Agree-

EST Ras = oe ee aC a

C. Neither ADEA’s Text, Its Legislative History,

nor Its Underlying Purposes Preclude Waiver of

the Judicial Forum ..................................... rae

1. Statutes Under Which Compulsory Arbitra-

tion Has Been Upheld Have Broad Public

EET EC I SC

2. Arbitration Pursuant to an Individual Arbi-

tration Agreement is Consistent With

ADEA’s Statutory Scheme 00.

3. The Arbitral Forum Is “Readily Capable” of

Protecting and Vindicating Petitioner’s Stat-

utory Rights Under ADEA

SEITEN <cnsesiessnspaiatsdianunsetrveunestsbebquitiesbeusansicinnciinssisisguene

or

16

17

19

21

26

ii

° TABLE OF AUTHORITIES

CASES Page

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

CIGD ccccssscessevisinttasitiniaiamai aia ee passim

Amoco Overseas Oil Co. v. Astir Navigation Co.,

490 F. Supp. 32 (S.D.N.Y. 1979) 0 25

Atchison, Topeka & Santa Fe Railway Co. v. Buell,

oS Ef, REE Eo 15

Barrentine v. Arkansas-Best Freight Systems,

os | 5 OTC ey passim

Carte Blanche (Singapore) Pte., Ltd. v. Carte

Blanche Int'l, Ltd., 888 F.2d 260 (2d Cir. 1989) .. 25

Clemons v. Dean Witter Reynolds, Inc., 708 F.

Supp. 62 (S.D.N.Y. 1989) 200000. 25

Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213

CIID <ccausessorsusinsquveiationsisseisannmsanniaansinan ase 7,8

DeShaney v. Winnebago Social Services, 489 U.S.

Ir mE 7

Ernst & Ernst v. Hochfelder, 425 U.S. 185 (1976)... 20

Jenkins v. Prudential-Bache Securities, Inc., 847

F.2d 681 (10th Cir. 1068) .........ccccccccccseceses-.---.--. 25

McDonald v. City of West Branch, 466 U.S. 284

ea passim

Mitsubishi Motors Corp. v. Soler Chrysler-

Plymouth, Inc., 473 U.S. 614 (1985) passim

Northern Pacific Ry. Co. v. United States, 356 U.S.

SE) Ne he 17

O.R. Securities, Inc. v. Professional Planning As-

sociates, Inc., 857 F.2d 742 (11th Cir. 1988)... 25

Oscar Mayer & Co. v. Evans, 441 U.S. 750 (1979) .. 16

Randall v. Loftsgaarden, 478 U.S. 647 (1986)... 19

Rodriguez de Quijas v. Shearson/American Ex-

press, Inc., 490 U.S. ——, 104 L. Ed. 2d 526

CRIP <caosacvesesissesunsststinnsenenniiiaaniadiinsiinnnaananan passim

Saturday Evening Post Co. v. Rumbleseat Press,

Inc., 816 F.2d 1191 (7th Cir. 1987)... 25

Shearson/American Express, Inc. v. McMahon, 482

eS fF) | ee passim

Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974) .. 20

Silver v. New York Stock Exchange, 878 U.S. 341

CIGD -x0cc.u2e- :ccsocenseoceuenienminmnaiinassieniinanaanannnnnn 19

iii

TABLE OF AUTHORITIES—Continued

Page

Tahoe Regional Planning Agency v. McKay, 769

ee 16

Union Pacific Ry. Co. v. Sheehan, 439 U.S. 89

ST 15

United States v. Naftalin, 441 U.S. 768 (1979). 18, 19

United States v. oem Associates, Inc., 405 U.S.

596 (1972) . 17

United Steelworkers ' v. Enterprise Wheel & Car

Corp., 368 U.S. 598 (1960) ................00.00000 13

United Steelworkers v. Warrior & Gulf Naviga-

tion Co., 368 U.S. 574 (1960)... 12, 13

Wilko v. Swan, 346 U.S. 427 (1953) _........ ee 8

STATUTES AND REGULATIONS

Age Discrimination in Employment Act, 29 U.S.C.

§§ 621, et seq. (1988) 0 passim

Fair Labor Standards Act, 29 U.S. C. §§ 201, et seq.

Ce cesenmonones 10

Federal Arbitration Act, 9 U.S.C. §§1, et seq.

I ecerecneornmed passim

Federal Employers’ Liability Act, 45 U.S.C. §§ 51,

ES 15

Railway Labor Act, 45 U.S.C. §§ 151, et seq.

EEE EE 15

Securities Act of 1933, 15 U.S.C. §§ 77a, et seq.

(1988) .. " = 18, 21

Securities Exchange Act of 1934, 15 U. Ss. C. §§ 78a,

SE 19, 20, 21

Sherman Act, 15 U.S.C. §§ 1, et seq. (1988). 17, 21

Title VII of the Civil Rights Act of 1964, 42 U.S.C.

§§ 2000e, et seg. (1988) 000. 10

ee cnscscusnecooncssoeces 10

29 C.F.R. §§ 1626.4, 1626.13, 1626.15 (1988) 20

MISCELLANEOUS

American Arbitration Association Commercial

Arbitration Rule 43 (1990)... 22

H.R. Rep. No. 96, 68th Cong., Ist Sess. (1924). 7,8

iv

TABLE OF AUTHORITIES—Continued

Page

Loevinger, Antitrust, Economics and Politics, 1

Antitrust Bulletin 225 (1955)... 18

NYSE Arbitration Rules

2 N.Y.S.E. Guide (CCH) ‘| 2600-37 (1989) ..15, 23, 24

S. Rep. No. 47, 73d Cong., Ist Sess. (1933) 19

Shell, ERISA and Other Federal Employment Stat-

utes: When is Commercial Arbitration an Ade-

quate Substitute for the Courts?, 68 Tex. L. Rev.

EERE Or, Cabernet ee 14

Shulman, Reason, Contract and Law in Labor Re-

lations, 68 Harv. L. Rev. 999 (1955) 13

IN THE

Supreme Court of the United States

OCTOBER TERM, 1990

No. 90-18

ROBERT D. GILMER,

. Petitioner,

INTERSTATE/JOHNSON LANE CORPORATION,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

BRIEF AMICUS CURIAE OF THE CHAMBER OF

COMMERCE OF THE UNITED STATES OF AMERICA

IN SUPPORT OF THE RESPONDENT

INTEREST OF THE AMICUS CURIAE

The Chamber of Commerce of the United States of

America (“the Chamber”) is a federation consisting of

approximately 180,000 companies and several thousand

other organiza*ions such as state and local chambers of

commerce and trade and professional organizations in

the United States.

A significant aspect of the Chamber’s activities is the

representation of the interests of its member-employers

in employment and labor relations matters before the

courts, the United States Congress, the Executive Branch

and independent regulatory agencies of the federal gov-

ernment. Accordingly, the Chamber has sought to ad-

vance those interests by filing amicus curiae briefs in a

2

wide spectrum of labor relations litigation before this

Court."

The instant case involves the issue of whether an

agreement between an individual employee and his em-

ployer to arbitrate all claims arising out of employ-

ment is enforceable under the terms of the Federal Ar-

bitration Act (“FAA” or “Arbitration Act”), 9 U.S.C.

$$ 1, et seg. (1988), when the claim against the em-

ployer is one for violation of the Age Discrimination in

Employment Act (“ADEA”), 29 U.S.C. §§ 621, et seq.

(1988). Relying on the reasoning and holdings of this

Court in a recent trilogy of FAA cases,’ the Fourth Cir-

cuit correctly answered this question in the affirmative.

Appendix to the Petition for Writ of Certiorari (“P.

App.”) la-36a. However, Petitioner contends that the

Fourth Circuit’s conclusion is foreclosed by the Court’s

earlier decisions in Alexander v. Gardner-Denver, 415

U.S. 36 (1974), and its progeny * and by the purposes of

ADEA.

A resolution of this issue is of vital concern to the

Chamber and its members, many of whom have individ-

ual arbitration agreements with at least some of their

employees. These agreements have been adopted in re-

sponse to the extraordinary growth of employment-

¥

1E.g., Lingle v. Norge Div. of Magi Chef, Inc., 486 U.S. 399

(1988); Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S.

27 (1987); Golden State Transit Corp. v. Los Angeles, 475 U.S.

608 (1986); Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985);

Trans World Airlines v. Thurston, 469 U.S. 111 (1985): NLRB v.

Burns International Security Services, 406 U.S. 272 (1972).

* Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473

U.S. 614 (1985); Shearson/American Express, Inc. v. McMahon,

482 U.S. 220 (1987); Rodriguez de Quijas v. Shearson/American

Express, Inc., 490 US. ——, 104 L. Ed. 2d 526 (1989).

8 Barrentine v. Arkansas-Best Freight Systems, Inc., 450 U.S.

728 (1981); McDonald v. City of West Branch, 466 U.S. 284

(1984).

3

related litigation and the equally extraordinary increase

in the cost of litigating such claims. Voluntary binding

arbitration provides a means for resolving such employ-

ment claims in a forum that is quicker, more efficient,

less disruptive, and less expensive, and one that has the

same access to expertise as the judicial forum because

the arbitrator can be selected with an eye to the nature

of the claim.

The insta1.t case will determine whether such arbitra-

tion agreements are enforceable with respect to age dis-

crimination claims, which represent one of the fastest-

growing areas of employment litigation. Moreover, the

Court’s rationale will also undoubtedly clarify whether

such agreements have any vitality with respect to claims

arising under other statutes relating to employment. Ac-

cordingly, with the consent of all parties pursuant to

Supreme Court Rule 37.3, the Chamber submits this

brief amicus curiae urging the Court to affirm the de-

cision of the Fourth Circuit compelling the arbitration

of Petitioner’s ADEA claim.

SUMMARY OF THE CASE

Petitioner Gilmer, an experienced securities agent

(Joint Appendix (“J.A.”) 44), was hired by Respondent

Interstate/Johnson Lane Corporation (“Interstate”) in

1981 as Manager of Financial Services. J.A. 21. As re-

quired for his employment, Gilmer executed a securities

representative’s registration form with the New York

Stock Exchange (“NYSE”) in which he “agree[d] 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 by-laws of

the organization with which I register... .” J.A. 18.

Among the latter was a provision, NYSE Rule 347,

which provided for the arbitration of “any controversy

... arising out of the employment or termination of em-

ployment” of a registered securities agent. J.A. 10-11.

SE e

4

Six years later, in 1987, Interstate terminated Gil-

mer’s employment. In direct contravention of his agree-

ment to arbitrate, Gilmer responded by filing suit in fed-

eral district court alleging that his termination violated

ADEA. J.A. 4-8, 11. Interstate moved to dismiss the

complaint and compel arbitration as authorized under

the FAA, 9 U.S.C. §§ 3, 4 (J.A. 11), and in reliance

upon this Court’s holdings and rationale in Mitsubishi

and McMahon. J.A. 22-39. However, the district court

denied the motion, ruling that this Court’s earlier deci-

sion in Gardner-Denver established, in effect, that “arbi-

tration proce Jures” are inadequate for the “final resolu-

tion” of discrimination claims such as those under ADEA

and that “Congress intended to protect ADEA claimants

from the waiver of a judicial forum.” J.A. 8&7.

On appeal, the Fourth Circuit reversed, agreeing with

Interstate that resolution of the arbitration issue was

controlled by the rationale set forth in this Court’s FAA

trilogy, not by the rationale of Gardner-Denver and its

progeny. P. App. 23a-27a. According to the appellate

court, Mitsubishi clearly established that “by agreeing

to arbitrate a statutory claim, a party does not forgo the

substantive rights afforded by the statute; it only sub-

mits to their resolution in an arbitral, rather than a ju-

dicial forum.” P. App. 6a. Thus, following the teachings

of the FAA trilogy, the Fourth Circuit concluded that

Gilmer’s individual arbitration agreement must be en-

forced unless Congress evidenced an intent to preclude

waiver of the judicial forum available to an ADEA

claimant. P. App. 6a-7a. Finding no such intent dis-

cernible in the ADEA’s text, legislative history or un-

derlying purposes, the Fourth Circuit held that Gilmer’s

ADEA claim must be arbitrated. P. App. 3a-36a.

5

SUMMARY OF THE ARGUMENT

The Court should hold that the rationale of the FAA

trilogy rather than that of Gardner-Denver and its

progeny controls the issue of whether claims arising un-

der employment discrimination statutes are arbitrable

pursuant to an individual arbitration agreement. In the

FAA trilogy, this Court announced in a clear and deci-

sive voice that individual agreements to arbitrate are en-

forceable with respect to federal statutory claims. The

Court held that the FAA’s mandate to enforce individual

arbitration agreements must be followed unless it can

be shown that Congress intended to preclude a waiver of

the judicial forum for the statutory claim. Such an in-

tention must be deducible from the text or the legislative

history of the statute or from an inherent conflict be-

tween arbitration and the statute’s underlying purposes.

There is nothing in the text or legislative history of

ADEA indicating Congress’ intention to preclude waiver

of the judicial forum by a claimant. Furthermore, inso-

far as this Court has found no inherent conflict between

compelling the arbitration of claims arising under the

1933 and 1934 Securities Acts and the Sherman Act,

statutes which implicate issues of broad public impor-

tance, the Court should not find a conflict between com-

pelling the arbitration of claims arising under ADEA.

The rationale and holdings of Gardner-Denver and its

progeny are inapplicable to the issue of whether claims

arising under ADEA, Title VII, 42 U.S.C. § 1983 or the

FLSA are arbitrable pursuant to an individual arbitra-

tion agreement. Those cases involved labor arbitrations,

which as this Court properly recognized, are intended to

resolve contractual disputes and foster harmonious rela-

tions between unions and management. A labor arbitra-

tor is expected to interpret and effectuate the terms of

the collective bargaining agreement not vindicate an in-

dividual’s statutory rights. In contrast, the arbitration

in this case as well as any other arbitration pursuant to

6

an individual arbitration agreement will concern itself

with resolving the particular statutory claim at issue,

and, moreover, the arbitrator is expected to resolve the

dispute and award damages in accordance with the terms

of the underlying statute.

ARGUMENT

THE FAA MANDATES ENFORCEMENT OF INDIVID-

UAL ARBITRATION AGREEMENTS WITH RESPECT

TO STATUTORY EMPLOYMENT DISCRIMINATION

CLAIMS

In the late 1980s this Court issued three decisions

dealing with the fundamental predicate issue that under-

lies the instant case—whether federal statutory claims

may be subject to mandatory arbitration under the Fed-

eral Arbitration Act.‘

Given the clarity and decisiveness with which the

Court spoke in this trilogy of FAA cases, one would sup-

pose that the instant case would involve a straightfor-

ward application of the standards and criteria the Court

there enunciated for deciding the arbitrability of statu-

tory claims. However, Petitioner and his amici curiae

argue, in effect, that, over a decade earlier in Gardner-

Denver and its progeny,® the Court had already conclu-

sively resolved questions relating to the arbitrability of

federal employment discrimination claims. They suggest

that the Fourth Circuit’s decision herein can be affirmed

4 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473

U.S. 614 (1985) (“Mitsubishi”); Shearson/American Express, Inc.

v. McMahon, 482 U.S. 220 (1987) (“McMahon”); Rodriguez de

Quijas v. Shearson/American Express, Inc., 490 U.S. , 104

L. Ed. 2d 256 (1989) (“Rodriguez”).

5 Alexander v. Gardner-Denver, 415 U.S. 36 (1974); Barrentine

v. Arkansas-Best Freight Systems, Inc., 450 U.S. 728 (1981)

(“Barrentine’’); McDonald v. City of West Branch, 466 U.S. 284

(1984) (“McDonald”). For ease of reference, these cases are

sometimes referred to as “the Gardner-Denver trilogy.”

7

only if the Court is willing to overrule those earlier

decisions.

The following sections demonstrate that such a step

is wholly unnecessary. The first section deals with the

Court’s FAA trilogy and the standards for determining

when the arbitration of statutory claims may be com-

pelled. The second section explains how the Gardner-

Denver trilogy fits within our nation’s system of indus-

trial self-government and why it is consequently not con-

trolling in the instant case. Finally, we show that proper

application of the FAA standards warrants affirmance

of the Fourth Circuit’s judgment.°

A. The FAA Trilogy Establishes That Statutory Claims

Must Be Arbitrated Absent a Showing of Contrary

Congressional Intent

It has long been recognized that Congress enacted the

Federal Arbitration Act to reverse longstanding judicial

hostility against arbitration agreements which had existed

in the English common law and had been adopted by the

American courts. H.R. Rep. No. 96, 68th Cong., 1st Sess.

1-2 (1924), cited in Dean Witter Reynolds, Inc. v. Byrd,

470 U.S. 213, 219 & n.6 (1985). Through the FAA, Con-

® Petitioner’s amici, but not Petitioner himself, contend that

the FAA does not apply to arbitration agreements contained in

employment contracts. See, e.g., amicus brief of the AFL-CIO in

support of Petitioner. Petitioner never raised this issue in either

the courts below or his petition for certiorari, and the Cham'jer

thus assumes that the Court will not decide the question. See, e.g.,

DeShaney v. Winnebago Social Services, 489 U.S. 189, 195 n.2

(1989) (Court will decline to consider issue first raised in peti-

tioner’s brief on the merits). Indeed, it would be particularly in-

appropriate to vary that rule here since, as pointed out in Re-

spondent’s brief, Petitioner’s agreement to arbitrate is contained

in his registration agreement with the New York Stock Exchange,

not merely in his employment contract. In view of these circum-

stances, the Chamber’s brief does not address the reach of the FAA

but instead merely adopts the arguments on this point made by

Respondent.

8

gress sought to ensure that the courts would enforce ar-

bitration agreements as they would any other contract:

“Arbitration agreements are purely matters of contract,

and the effect of the bill is simply to make the contract-

ing party live up to his agreement.” /d., cited in Byrd,

470 US. at 219-21 & n.6.

Despite this recognition, it was not until 1985 that this

Court concluded that the FAA presumptively requires the

arbitration of claims asserting federal statutory rights.

Mitsubishi, 473 U.S. at 625-27. See also McMahon, 482

U.S. at 226-27; Rodriguez, 104 L. Ed. 2d at 533-36." The

Court reasoned that, on its face, the FAA mandates the

arbitration of all claims that the parties have agreed to

resolve by arbitration and that this mandate “is not di-

minished when a party bound by an agreement raises a

claim founded on statutory rights.” McMahon, 482 U.S.

at 226.

The Court found no inconsistency between the presump-

tive arbitrability of statutory claims and the assurance

that statutory rights are protected. First, the Court rec-

ognized that, “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 ar-

bitrable, rather than a judicial forum.” Rodriguez, 104

L. Ed. 2d at 534; Mitsubishi, 473 U.S. at 628. Second,

the Court also recognized that “we are well past the time

when judicial suspicion of the desirability of arbitration

and of the competence of arbitral tribunals should in-

hibit enforcement of the Act in controversies based on

statutes.”” McMahon, 482 U.S. at 226. See also Mitsu-

bishi, 473 U.S. at 626-27.

Thus, the Court concluded that the “Arbitration Act,

standing alone, . . . mandates enforcement of agreements

7 The Court had earlier held the view that rights conferred by

statute could not appropriately be enforced by arbitration. Wilko

v. Swan, 346 U.S. 427 (1953).

9

to arbitrate statutory claims” unless the statute in ques-

tion overrides the FAA’s mandate by prohibiting waiver

of the judicial forum for the statutory right at issue.

McMahon, 482 U.S. at 226. The burden is on the party

opposing arbitration to demonstrate such a contrary con-

gressional intent either in the text or legislative history

of the statute or from an inherent conflict between arbi-

tration and the underlying purposes of the statute. Jd.

at 227.

Contrary to the assertions of the Petitioner and his

amici curiae, this Court should affirm the Fourth Cir-

cuit’s decision compelling arbitration of the Petitioner’s

ADEA claim under the FAA. As shown in the remainder

of this brief, the Fourth Circuit properly found the

Gardner-Denver trilogy inapplicable to this case and cor-

rectly applied the Court’s teachings in the FAA trilogy

in concluding that neither the ADEA’s text, its legislative

history, nor its underlying purposes precluded waiver of

the judicial forum. P. App. la-36a.

B. The Rationale of Alexander v. Gardner-Denver and

Its Progeny Is Inapplicable to the Issue of Whether

Claims Arising Under Federal Employment Discrimi-

nation Statutes Are Arbitrable Pursuant to an Individ-

ual Arbitration Agreement

Petitioner and his amici contend, at bottom, that this

Court has already performed the analysis necessary to

determine whet'.er ADEA claims are subject to compul-

sory arbitration under the Federal Arbitration Act. They

argue that, taken together, Gardner-Denver, Barrentine

and McDonald establish that arbitration is an inadequate

substitute for judicial determination of employee rights

under employment discrimination statutes and other laws

designed to provide minimum substantive guarantees to

individual workers. Any facial appeal of these arguments

evaporates when one considers the Court’s subsequent de-

cisions in the FAA trilogy and the labor relations context

of the Gardner-Denver trilogy.

10

Gardner-Denver, Barrentine and McDonald all involved

labor arbitrations under collective bargaining agreements

negotiated between employers and unions rather than pri-

vate arbitration pursuant to individual employee-employer

agreements. In each case, the Court held that a labor

arbitrator’s rejection of the employee’s claim would not

preclude or collaterally estop the employee from raising

the same or similar claims in federal court pursuant to

statute. See Gardner-Denver (claims under Title VII of

the Civil Rights Act) ; Barrentine (claims under the Fair

Labor Standards Act (“FLSA”)); McDonald (claims un-

der 42 U.S.C. § 1983).

It is clear that the conclusions in these cases were

premised on the Court’s view that labor arbitration would

not adequately protect statutory rights, rather than on

the nature of the statutes themselves.* First, the Court

repeatedly emphasized that labor arbitrators are confined

to deciding contract claims—not statutory claims—and

* While Gardner-Denver and its progeny do contain some dis-

cussion of the nature of the statutes in issue, the Court apparently

found it necessary only to ascertain that Congress intended to give

aggrieved employees access to the courts and also intended to pre-

clude the waiver of substantive statutory rights by either individ-

ual employees or their collective bargaining representative. See,

€.g., McDonald, 466 U.S. at 290 (only 'imited discussion of Section

1983); Gardner-Denver, 415 U.S. at 51 (distinguishing Title VII

rights from statutory rights concerning majoritarian processes

(eg., the right to strike) that may be waived by a union);

Barrentine, 450 U.S. at 740-41 (finding only that substantive rights

under the FLSA are nonwaivable). Moreover, to the extent the

Court focused on specific congressional intent regarding arbitrabil-

ity, it apparently searched for an indication that Congress intended

tu permit compulsory arbitration. See Gardner-Denver, 415 U.S. at

47 (“There is no suggestion in the statutory scheme that a prior

arbitral decision either forecloses an individual's right to sue or

divests federal] courts of jurisdiction.”). That is just the opposite of

the inquiry the Court prescribed in the FAA trilogy. See, e.g.,

McMahon, 482 U.S. at 226-27 (arbitration agreement will be en-

forced unless party opposing arbitration can show that Congress

intended to preclude compulsory arbitration).

11

that they are not even permitted to base their decisions

on their view of statutory requirements. Gardner-Denver,

415 U.S. at 53. See also Barrentine, 450 U.S. at 744;

McDonald, 466 U.S. at 290-91. Second, the Court em-

phasized that labor arbitrators’ specialized competence

“yertains primarily to the law of the shop, not the law

of the land,” and hence the Court feared that arbitrators

would lack the expertise required to resolve statutory

claims. Gardner-Denver, 415 U.S. at 57. See also Bar-

rentine, 450 U.S. at 743; McDonald, 466 U.S. 290-91.

Third, the Court expressed concern that in labor arbitra-

tion the contracting union usually has exclusive control

over the manner and extent to which an individual griev-

ance is prosecuted, and that union and employee interests

“are not always identical or even compatible.” McDonald,

466 U.S. at 291. See also Gardner-Denver, 415 U.S. at

58 n.19; Barrentine, 450 U.S. at 742. Finally, the Court

was concerned that the informal procedures of arbitration

would produce “arbitral factfinding [which] is generally

not equivalent to judicial factfinding.” McDonald, 466

U.S. at 291. See also Gardner-Denver, 415 U.S. at 57-58.

These views plainly cannot be squared with the view

of arbitration expressed in the Court’s subsequent FAA

trilogy. E.g., Rodriguez, 104 L. Ed. 2d at 534-35 (“[T]o

the extent that [a court’s decision not to enforce an ar-

bitration agreement] rest[s] on suspicion of arbitration

as a method of weakening the protections afiorded in the

substantive law to would-be complainants, it has fallen

far out of step with our current strong endorsement of

the federal statutes favoring this method of resolving dis-

putes.”); McMahon, 482 U.S. at 232 (“[T}he stream-

lined procedures of arbitration do not entail any conse-

quential restriction on substantive rights.”) ; Mitsubishi,

473 U.S. at 673 (“We decline to indulge the presumption

that the parties and the arbitral body conducting a pro-

ceeding will be unable or unwilling to retain competent,

conscientious and impartial arbitrators’). See also Sec-

12

tion C(3), infra, where we deal with Petitioner’s specific

attack on the adequacy of the arbitral forum.

There are two possible explanations for these contrast-

ing views of arbitration: either the Court has substan-

tially modified its view concerning the adequacy of arbi-

tration generally, or it was describing different kinds of

arbitration in the two lines of cases. While the Chamber

would welcome the Court’s decision to revisit the Gardner-

Denver rationale,’ we show below that that is unnecessary

since the two lines of cases can be reconciled when one

considers the labor relations context in which the Gardner-

Denver trilogy arose.

Initially, the Court has long recognized that both collec-

tive bargaining agreements and arbitration pursuant to

such agreements cannot be likened to ordinary commer-

cial or service contracts. The collective bargaining agree-

ment “is more than a contract; it is a generalized code to

govern a myriad of cases which the draftsmen cannot

wholly anticipate.” United Steelworkers v. Warrior &

Gulf Navigation Co., 363 U.S. 574, 578 (1960). It “is an

effort to erect a system of industrial self-government.”

Id. at 580. Furthermore, the grievance-arbitration ma-

chinery of collective bargaining agreements

is at the very heart of the system of industrial self-

government. Arbitration is the means of solving the

unforeseeable by molding a system of private law for

all the problems which may arise and to provide for

*In Rodriguez, the Court candidly acknowledged that its view

of arbitration had moderated. 104 L. Ed. 2d at 534. Moreover,

Gardner-Denver itself recognized that some arbitration proceedings

would contain sufficient safeguards to justify according those

arbitral resolutions “great weight” in subsequent judicial proceed-

ings. 415 U.S. at 60 n.21. Thus, the Court’s more recent views

of arbitration might indicate an ultimate conclusion that arbitra-

tion generally has become sophisticated enough to warrant a pre-

sumption of adequacy absent evidence of fraud, bias, or some other

factor sufficient to overturn an award.

13

their solution in a way which will generally acord

with the variant needs and desires of the parties.

Id. at 581.

Given these views, it is not at all surprising that the

Court also long ago concluded that labor arbitration is of

a fundamentally different character from arbitration pur-

suant to private agreements: “In a commercial case, ar-

bitration is the substitute for litigation. Here arbitration

is the substitute for industrial strife.... [It] is part and

parcel of the collective bargaining process itself.” Jd. at

578.

It is no less surprising that these considerations have

led the Court to conclude that labor arbitrators have spe-

cial functions not shared by the “arbitrator as judge”’:

The labor arbitrator performs functions which are

not normal to the courts; the considerations which

help him fashion judgments may indeed be foreign

to the competence of courts. “A proper conception of

the arbitrator’s function is basic. He is not a public

tribunal imposed upon the parties by superior au-

thority which the parties are obliged to accept. He

has no general charter to administer justice for a

community which transcends the parties. . . .”

.. . [Rather, the] arbitrator is usually chosen be-

cause of the parties’ confidence in his knowledge of

the common law of the shop. ... The parties expect

that his judgment of a particular grievance will re-

flect not only what the contract says, but . . . such

factors as the effect upon productivity of a partic-

ular result, its consequences to the morale of the

shop, his judgment whether tensions will be height-

ened or diminished.

Id. at 581-82, quoting Shulman, Reason, Contract and Law

in Labor Relations, 68 Harv. L. Rev. 999, 1016 (1955).

In short, as this Court recognized in Gardner-Denver

and it progeny, labor arbitration is a special brand of

dispute resolution in which the arbitrator is a

14

proctor of the bargain [whose] task is to effectuate

the intent of the parties. His source of authority

is the collective-bargaining agreement, and he must

interpret and apply that agreement in accordance

with the “industrial common law of the shop” and

the various needs and desires of the parties. The ar-

bitrator, however, has no general authority to invoke

public laws that conflict with the bargain between

the parties. . . . If an arbitral decision is based

“solely upon the arbitrator’s view of the requirements

of enacted legislation,” rather than on an interpre-

tation of the collective-bargaining agreement. the ar-

bitrator has “exceeded the scope of the submission,”

and the award will not be enforced. ... Thus the

arbitrator has authority to resolve only questions of

contractual rights [not statutory rights}.

Gardner-Denver, 415 U.S. at 53-54, quoting United Steel-

workers v. Enterprise Wheel & Car Corp., 363 U.S. 593,

597 (1960).

While these considerations obviously underlay the

Gardner-Denver trilogy, they just as obviously have no

applicability to arbitration pursuant to individual, pri-

vate agreements. For example, in the context of the ar-

bitration of claims arising under the 1933 and 1934 Se-

curities Acts, one commentator has noted:

([Uj|nlike labor arbitration, commercial arbitration

often depends on legal standards external to the con-

tract .... Many commercial arbitration agreements

explicitly refer to sources of external law that the

arbitrator is charged to apply .... Even when the

arbitration clause makes no such reference, commer-

cial arbitrators look to relevant law governing the

trade or transaction... .

Shell, ERISA and Other Federal Employment Statutes:

When is Commercial Arbitration an Adequate Substitute

for the Courts?, 68 Tex. L. Rev. 509, 532 (1990). Thus,

“there is no reason to assume . . . that arbitrators will

not follow the law” when specifically called upon to decide

15

claims arising under employment discrimination statutes

and other laws providing minimum job guarantees. Mc-

Mahon, 482 U.S. at 232.

Furthermore, unlike a grievant in a labor arbitration,

a complainant such as the Petitioner has complete control

over the presentation of his ADEA claim to an arbitrator,

the arbitration is pursuant to an agreement entered into

and signed by the complainant himself, and the com-

plainant may be represented “by counsel at any stage of

the” arbitration. NYSE Arbitration Rule 614, 2 N.Y.S.E.

Guide (CCH) {| 2614 (1989).

In sum, the concerns underlying the rationale of

Gardner-Denver and its progeny are inapplicable to the

arbitration of statutory claims pursuant to an individual

agreement. Thus, these decisions provide no reason for

the Court to “skew the otherwise hospitable inquiry into

arbitrability” under the FAA. McMahon, 482 U.S. at

226 (quoting Mitsubishi, 473 U.S. at 627).

1° The Court’s decision in Atchison, Topeka & Santa Fe Railway

Co. v. Buell, 480 U.S. 557 (1987), does not dictate a different con-

clusion. Buell did not involve the question of the FAA enforce-

ability of an individual arbitration agreement with respect to a

statutory claim. Rather, the issue before the Court was whether

the availability of “labor arbitration” under the Railway Labor Act

(“RLA”), 45 U.S.C. §§ 151, et seq. (1988), precluded an injured

employee from bringing a tort claim in court under the Federal

Employers’ Liability Act (“FELA”), 45 U.S.C. §§51, et seq.

(1988). Consistent with Gardner-Denver and its progeny, the

Court ruled against preclusion, finding that labor arbitration under

the RLA, like labor arbitration under the LMRA, is intended “to

promote stability in labor-management relations” not to vindicate

statutory rights. Buell, 480 U.S. at 561-66 & n.9 (quoting Union

Pacific Ry. Co. v. Sheehan, 439 U.S. 89 (1978) ).

Because Buell did not involve the enforceability of an individual

arbitration agreement with respect to a statutory claim, the Peti-

tioner has no basis for claiming that “Buell . . . demonstrates that

this Court has wisely treated employment discrimination and re-

lated claims as ‘a breed apart’ from the kinds of claims at issue”

in the FAA trilogy. Petitioner’s Brief 11-12.

16

C. Neither ADEA’s Text, Its Legislative History, nor Its

Underlying Purposes Preclude Waiver of the Judicial

Forum

It is clear from the foregoing that the Gardner-Denver

trilogy does not control the inquiry into whether statu-

tory employment discrimination claims may be subject to

compulsory arbitration pursuant to an individual agree-

ment to arbitrate. Instead, that question must be decided

by application of the Court’s usual FAA criteria, and

arbitration of Petitioner’s ADEA claim may be foreclosed

only if he can demonstrate that ADEA’s text, legislative

history or underlying purposes preclude waiver of the

judicial forum provided by ADEA.

As was the case for the statutes involved in the Court’s

FAA trilogy, arbitration is nowhere mentioned in the

text of ADEA, and “this silence in the text is matched

by silence in the statute’s legislative history.” McMahon,

482 U.S. at 238. Furthermore, there is no statement in

either the text or the legislative history of ADEA indi-

cating that Congress intended the federal judicial forum

to be the only appropriate forum for the vindication of

those rights."

Because the text and legislative history of ADEA are

silent on the issue of arbitration, Petitioner and his

amici curiae argue that waiver of the judicial forum is

precluded because there is an inherent conflict between

the purposes of ADEA and arbitration. They attempt to

1! Petitioner’s citation to the Joint Explanatory Statement of the

Committee of Conference on the 1990 Civil Rights Act for the

proposition that Congress intended to preclude waiver of the judi-

cial forum in ADEA is unavailing. This statement cannot be evi-

dence of congressional intent on any issue since the Civil Rights

Act of 1990 was never enacted into law. See Tahoe Regional Plan-

ning Agency v. McKay, 769 F.2d 534, 539 (9th Cir. 1985) (action

on a proposed amendment is not a significant aid to interpretation

of an act that was passed years before). See also Oscar Mayer &

Co. v. Evans, 441 U.S. 750, 758 (1979) (it is the intent of the

Congress that enacted the original legislation that controls).

17

establish this conflict (1) by asserting that, unlike the

statutes involved in the FAA trilogy, ADEA and other

civil rights statutes implicate issues of broad public im-

portance; (2) by asserting that arbitration inherently

conflicts with ADEA’s statutory scheme; and (3) by at-

tacking the competency of the arbitral forum for re-

solving ADEA claims. Petitioner’s Brief 15-24; Law-

yers’ Committee Brief 8-16; AARP’s Brief 15-25. These

assertions are without foundation.

1. Statutes Under Which Compulsory Arbitration Has

Been Upheld Have Broad Public Importance

Petitioner and his amici argue vigorously that employ-

ment discrimination statutes are a “breed apart” from

other federal statutes and have a broad public impor-

tance which precludes subjecting discrimination claims

to compulsory arbitration. This kind of argument not

only would require the lower courts to make inappro-

priate value judgments about the relative importance of

federal laws of equal stature, but also ignores the fact

that this Court’s FAA trilogy similarly involved statutes

of great public importance.

For example, in Mitsubishi the Court compelled the

arbitration of claims arising under the Sherman Act, 15

U.S.C. §§ 1, et seg. (1988), which clearly implicates is-

sues of broad public importance. Indeed, this Court itself

has described the Sherman Act as “the Magna Carta of

free enterprise,” which is “as important to the preserva-

tion of economic freedom and our free enterprise system

as the Bill of Rights is to the protection of our funda-

mental personal freedoms.” United States v. Topco As-

sociates, Inc., 405 U.S. 596, 610 (1972). See also North-

ern Pacific Ry. Co. v. United States, 356 U.S. 1, 4 (1958).

12 One commentator has stated:

It should also be understood that antitrust cases are political

in the sense that the decisions of the courts in these cases

actually make policy as to the character and structure of our

18

Like the Sherman Act, the Securities Act of 1933, 15

U.S.C. §§ 77a, et seg. (1988), implicates issues of broad

public importance and is intended to do more than pro-

vide individuals with compensation for economic injuries.

In United States v. Naftalin, 441 U.S. 768, 775 (1979),

this Court stated:

[The 1933 Act] emerged as part of the aftermath of

the market crash in 1929... . Indeed, Congress’ pri-

mary contemplation was that regulation of the se-

curities markets might help set the economy on the

road to recovery. ... Prevention of frauds against

investors was surely a key pert of that program,

but so was the effort to achieve a high standard of

business ethics .. . in every facet of the securities

industry. [Citations omitted; emphasis in original. |

Id. at 775. That the Securities Act of 1933 was enacted

to address issues of broad public importance is most

clearly demonstrated by Senate Report 47:

The purpose of this bill is to protect the investing

public and honest business. . .. The aim is to pre-

vent further exploitation of the public by the sale of

unsound, fraudulent, and worthless securities through

misrepresentation; to place adequate and true infor-

mation before the investor; to protect honest enter-

prise, seeking capital by honest presentation, against

the competition afforded by dishonest securities of-

fered to the public through crooked promotion; to re-

store the confidence of the prospective investor in his

society to a greater degree than in any other class of cases,

except possibly a few cases in constitutional interpretation.

The Supreme Court has said that the antitrust laws have a

generality and adaptability comparable to that of constitutional

provisions. President Franklin D. Roosevelt said that these

laws “have become as much a part of the American way of life

as the Due Process Clause of the Constitution.” The scope and

validity of the basic liberty sought to be secured by such

written laws remain to be given by the courts.

Loevinger, Antitrust, Economics and Politics, 1 Antitrust Bull.

225 (1955).

19

ability to select sound securities; to bring into pro

ductive channels of industry ané development capital

which has grown timid to the point of hoarding; and

to aid in providing employment and restoring buying

and consuming power.

S, Rep. No. 47, 73d Cong., 1st Sess. 1 (1933), quoted in

Naftalin, 441 U.S. at 775-76.

Similarly, in enacting the Securities Exchange Act of

1934, 15 U.S.C. §§$ 78a, et seg. (1988), “Congress’ aim

. . Was not confined solely to compensating defrauded

investors. Congress intended to deter fraud in the ma-

nipulative practices in the securities markets and to in-

sure full disclosure of information material to invest-

ment decisions.” Randall v. Loftsgaarden, 478 U.S. 647,

664 (1986). The 1934 Act was adopted in recognition

of the “enormous growth in power and impact .. . [se-

curities] exchanges ... [had on] our economy” and the

need “to curb” the widespread abuses therein. Silver «

New York Stock Exchange, 373 U.S. 341, 350-51 (1963).

In short, all of the statutes involved in this Court's

FAA trilogy addressed broad societal ills, yet the Court

compelled the arbitration of claims arising under those

statutes. The reason is obvious, since arbitrability turns

not upon whether a court thinks the statutory right “im-

portant,” but rather, upon whether Congress has indi-

cated its intent to preclude compulsory arbitration.

There being no such intention shown here, the Court

should find that compelling arbitration of Petitioner’s

ADEA claim does not conflict with Congress’s broad and

important purpose of eradicating age discrimination in

employment.

2. Arbitration Pursuant to an Individual Arbitration

Agreement is Consistent With ADEA’s Statutory

Scheme

Contrary to the assertions of Petitioner and his amici

curiae, compelling arbitration of Petitioner’s ADEA

claim is consistent with ADEA’s detailed statutory

20

scheme. First, an individual arbitration agreement

neither precludes a complainant from filing a charge

with the Equal Employment Opportunity Commission

(“EEOC”), as was demonstrated in this case (J.A. 5),

nor precludes the EEOC from independently investigat-

ing and prosecuting a claim of age discrimination. See

29 U.S.C. §626(b) (1988); 29 C.F.R. §§ 1626.4,

1626.13, 1626.15 (1988). Therefore, contrary to Peti-

tioner’s assertion, compelling arbitration of Petitioner’s

ADEA claim does not “undermine the role of the EEOC”

with respect to ADEA enforcement. Petitioner’s Brief

15.

Second, compelling arbitration of Petitioner’s claim is

also consistent with ADEA’s “overlapping system of

state, federal and administrative’ forums. See Peti-

tioner’s Brief 21; AARP’s Brief 23. In fact, Rodriquez

teaches that a statute’s provision of multiple forums is

indicative of congressional intent to permit arbitration.

As stated in Rodriguez, “arbitration agreements .. . are

‘in effect, a specialized kind of forum-selection clause,’

Scherk v. Alberto-Culver Co., 417 U.S. 506, 519...

(1974), [and] should not be prohibited . . . , since they,

- like the provision for concurrent jurisdiction, serve to

advance the objective of allowing [complainants] ... a

broader right to select the forum for resolving disputes,

whether it be judicial or otherwise.” 104 L. Ed. 2d at

535-36. Moreover, to the extent that Petitioner relies

upon the fact that a right of judicial action under ADEA

survives adverse administrative determination by the

EEOC, the same is true of parties’ rights of action under

the securities statutes at issue in McMahon and Rod-

riguez.™®

13 If the S.E.C. refuses to investigate or prosecute alleged viola-

tions of the Securities Acts, an individual complainant still has a

private right of action. Compare Ernst & Ernst v. Hochfelder,

425 U.S. 185, 196-97 (1976) (recognizing private right of action

under § 10(b) of the 1934 Securities Exchange Act) with 15 U.S.C.

§§ 78u, 78u-1 (authorizing S.E.C. to investigate and prosecute vio-

lations of the 1934 Securities Exchange Act) ; compare also section

21

Finally, compelling arbitration of Petitioner’s ADEA

claim does not inherently conflict with ADEA’s en-

forcement provisions. The fact that the EEOC “cannot

adjudicate claims or impose administrative saictions”’

(Lawyers’ Committee Brief 20 (quoting Gardner-

Denver, 415 U.S. at 44)), but must rely upon ‘he courts

for “final . . . enforcement” (id.), does not compel the

conclusion that Congress intended to preclude waiver of

the judicial forum by an individual agreement to ar-

bitrate. Under the Sherman Act, “final responsibility for

enforcement is vested with the courts.” 15 U.S.C. § 4.

See Lawyers’ Committee Brief 20 (quoting Gardner-

Denver, 415 U.S. at 44). Furthermore, under the 1933

and 1934 Securities Acts, only courts have the authority

to award damages and issue injunctive relief. See, e.g.,

15 U.S.C. §§ 77k, 771, 77t, 78i, 78p, 78r, 78u. Nonethe-

less, the Court found that waiver of the judicial forum

was not precluded under the latter statutes, and it thus

enforced individual arbitration agreements with respect

to claims arising under those statutes. Mitsubishi, 473

U.S. at 640; McMahon, 482 U.S. at 238; Rodriguez, 104

L. Ed. 2d at 536.

3. The Arbitral Forum Is “Readily Capable” of Pro-

tecting and Vindicating Petitioner’s Statutory

Rights Under ADEA

Petitioner and his amici attack the adequacy of arbi-

tration on three fronts: (1) questioning arbitrators’

ability to deal with “complex” ADEA issues; (2) ques-

tioning the availability of remedies sufficient to ensure

the eradication of age discrimination; and (3) question-

ing the adequacy of discovery, evidentiary rules and

other procedural safeguards. By and large these argu-

ments are merely “red herrings” inasmuch as this Court

12(2) of the 1933 Securities Act, 15 U.S.C. § 771(2) (authorizing

a private right of action for fraud in the sale of securities) with

15 U.S.C. §77t (authorizing the S.E.C. to investigate and prosecute

violations of the 1933 Act).

22

has previously concluded that, outside the collective bar-

gaining context, none of these arguments warrants a

determination that statutory claims are not arbitrable.

See Mitsubishi, 473 U.S. at 632-37; McMahon, 482 U.S.

at 231-42; and Rodriguez, 104 L. Ed. 2d at 434-36.

Nevertheless, we deal briefly with each contention.

First, there is nothing particularly “complex” about

most employment discrimination claims since such claims

usually involve primarily questions of fact. Certainly

such claims are no more complex than the antitrust and

securities claims for which arbitration was approved in

the Court’s FAA trilogy. Moreover, whatever their com-

plexity, this Court has unequivocally concluded that

potential complexity [of statutory claims] should not

suffice to ward off arbitration. . . . [A]daptability

and access to expertise are the hallmarks of arbitra-

tion. The anticipated subject matter of the dispute

may be taken into account when the arbitrators are

appointed, and arbitral rules typically provide for the

participation of experts either employed by the par-

ties or appointed by the tribunal.

Mitsubishi, 473 U.S. at 633. See also McMahon, 482 U.S.

at 239."

Second, Petitioner’s concern about inadequate remedies

in the arbitral forum is unfounded. Arbitrators are

creatures of the arbitration agreements under which

they serve, and they can grant any remedy that is not

foreclosed by those agreements.** Thus, if an arbitrator

14 Indeed, a complaining employee who intends to rely substan-

tially on statistical evidence to establish discrimination might find

it more advantageous to present that case to an arbitral tribunal

with statistical expertise than to a federal judge.

15 For example, Rule 43 of the American Arbitration Association

(“AAA”) Commercial Arbitration Rules (as amended and in effect

January 1, 1990) provides:

The arbitrator may grant any remedy or relief that the arbi-

trator deems just and equitable and within the scope of the

agreement of the parties... .

23

is considering a statutory claim, there is no reason that

the parties may not agree that the arbitrator has the

authority to grant any remedy that would be available in

a judicial proceeding. Indeed, in the Court’s FAA trilogy,

the Court was not the least concerned about ordering

arbitration of statutory claims that provided for treble

damages and attorney’s fees. Mitsubishi, 473 U.S. at 635-

37; McMahon, 482 U.S. at 240-42; Rodriguez, 104 L. Ed.

2d at 533-37.

Furthermore, the Chamber is unaware of any general

prohibition on arbitral claims containing “class” allega-

tions. And even if there were some impediment to such

class claims in arbitration, we have previously shown

that the EEOC retains full authority to investigate and

seek judicial relief for alleged discrimination even when

an individual’s specific claim is subject to arbitration. See

Section C(2), supra. Thus, the EEOC would remain free

to pursue any class claims relating to an employee’s in-

dividual claim.

Finally, arguments about insufficient procedural safe-

guards in private arbitration have failed to convince this

Court that arbitration of statutory claims creates any

substantial risk to statutory rights. E.g., McMahon, 482

U.S. at 232. This is borne out in this case by the broad

procedural rights and protections afforded by the New

York Stock Exchange (“NYSE”) Arbitration Rules that

would govern petitioner’s ADEA claim. See 2 N.Y.S.E.

Guide (CCH) 7 2600-37 (1989).

Under the NYSE Arbitration Rules, a panel consisting

of a majority of “public arbitrators” would resolve Peti-

tioner’s claim. NYSE Arbitration Rule 607(1), § 2607."

16 A “public arbitrator” is an arbitrator who

1. is [not] a person associated with a member, broker/dealer,

government securities dealer, municipal securities dealer, or

registered investment adviser, or

24

Each arbitrator would be required to disclose any direct

or indirect interests or relationships that are likely to

affect impartiality or that might reasonably create an

appearance of partiality in an arbitration to which he

might. be assigned. This duty of full disclosure precedes

the arbitration and also continues throughout the pro-

ceeding. NYSE Arbitration Rule 610(c), (d), | 2610.

With this information, a party may exercise a peremptory

challenge or move the Director of Arbitration to dis-

qualify the arbitrater for cause. NYSE Arbitration Rule

609, 7 2609.

In addition to these procedural protections, the Peti-

tioner is entitled to be represented by counsel at any stage

of the arbitration. NYSE Arbitration Rule 614, {| 2614.

Moreover, he or his attorney is entitled to engage in broad

pre-arbitration discovery and utilize the subpoena process

as provided by law. NYSE Arbitration Rule 619(a)-(g),

| 2619. In addition, a verbatim record of the arbitration

hearing is to be kept by stenographic reporter or tape

recording (NYSE Arbitration Rule 623, { 2623), and a

written award must be rendered and made public. NYSE

Arbitration Rule 627(e), (f), ] 2627.

Finally, parties such as the Petitioner are protected

from an improper arbitration award by the availability

2. has [not] been associated with any of the above within the

past five (5) years, or

3. is [not] retired from or spent a substantial part of his

or her business career in any of the above, or

4. is [not] an attorney, accountant or other professional

who devoted twenty (20) percent or more of his or her pro-

fessional work effort to securities industry clients within the

last two (2) years, [and]

5. does not have a spouse or other member of the household

who is a person associated with a registered broker, dealer,

municipal securities dealer, government securities broker, gov-

ernment securities dealer or investment adviser.

See NYSE Arbitration Rule 607 (a) (1)-(3), { 2607.

25

of judicial review. The FAA provides that a court may

vacate an arbitration award when it is established that

the award is tainted by (1) corruption, fraud or undue

means; (2) evident partiality or corruption on the part

of an arbitrator; (3) misconduct on the part of an arbi-

trator; or (4) the exceeding or improper execution of an

arbitrator’s powers. 9 U.S.C. §10. While an arbitra-

tion award will not be set aside due to a misinterpreta-

tion of the law, courts will vacate an award rendered “in

manifest disregard of the law,” '’ and will also vacate an

..ward that is irrational or contrary to public policy."

Such review “is sufficient to ensure that arbitrators com-

ply with the requirements of the statute” at issue.

McMahon, 482 U.S. at 232 (citing Mitsubishi, 473 U.S.

at 636-37).

Given the availability of judicial review, the Court’s

findings in the FAA trilogy and the broad procedural

protections and rights afforded the Petitioner under

NYSE Arbitration Rules, the arbitral forum is “readily

capable” of protecting and vindicating Petitioner’s rights

under ADEA.

17 See, e.g., Carte Blanche (Singapore) Pte., Ltd. v. Carte

Blanche Int'l, Ltd., 888 F.2d 260, 265 (2d Cir. 1989); O.R.

Securities, Inc. v. Professional Planning Associates, Inc., 857 F.2d

742, 746 (11th Cir. 1988); Jenkins v. Prudential-Bache Securities,

Inc., 847 F.2d 631, 634 (10th Cir. 1988); Clemons v. Dean Witter

Reynolds, Inc., 708 F. Supp. 62, 63 (S.D.N.Y. 1989).

18 See, e.g., Saturday Evening Post Co. v. Rumbleseat Press, Inc.,

816 F.2d 1191, 1197 (7th Cir. 1987); Amoco Overseas Oil Co. v.

Astir Navigation Co., 490 F. Supp. 32, 37 (S.D.N.Y. 1979).

26

CONCLUSION

For the foregoing reasons, the Chamber urges this

Court to affirm the judgment of the Fourth Circuit com-

pelling the arbitration of Petitioner’s ADEA claim.

Respectfully submitted,

Of Counsel: PETER G. NASH *

STEPHEN A. BOKAT DIXIE L. ATWATER

Mona C. ZEIBERG MICHAEL J. MURPHY

NATIONAL CHAMBER OGLETREE, DEAKINS, NASH,

LITIGATION CENTER, INC. SMOAK & STEWART

1615 H Street, N.W. 2400 N Street, N.W.

Washington, D.C. 20062 Washington, D.C. 20037

(202) 463-5337 (202) 887-0855

Counsel for the Chamber of

Commerce of the

United States of America,

Amicus Curiae

Date: December 19, 1990 * Counsel of Record