# 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

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0001%3A12. Public record. Not legal advice.