Amicus Curiae Brief — Wright v. Universal Maritime Service Corp.

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No. 97-889 Y

0. Y/- a

Court U.S

IN THE FIL Ep

Supreme Court of the United/ States 7 1995

OCTOBER TERM, 1997 CLERK

CEASAR WRIGHT,

Petitioner,

UNIVERSAL MARITIME SERVICE CORP.; STEVENS

SHIPPING & TERMINAL COMPANY; STEVEDORING

SERVICES OF AMERICA; RYAN-WALSH INC-.;

STRACHAN SHIPPING COMPANY; CERES MARINE

TERMINALS, INC.; and SOUTH CAROLINA

STEVEDORES ASSOCIATION,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

BRIEF AMICI CURIAE OF LAWYERS’ COMMITTEE

FOR CIVIL RIGHTS UNDER LAW AND AMERICAN

ASSOCIATION OF RETIRED PERSONS IN SUPPORT

OF PETITIONER CEASAR WRIGHT

Barbara R. Armwine Thomas R. Meites

Thomas J. Henderson Paul W. Mollica*

Richard T. Seymour Meites, Frackman, Mulder &

Teresa A. Ferrante Burger

Gia B. Lee 208 South LaSalle Street

Lawyers’ Committee for Suite 1410

Civil Rights Under Law Chicago, Illinois 60604

1450 G Street NW, Suite (312) 263-0272

400 * Counsel of Record

Washington, DC 20005 Additional Counsel Listed

(202) 662-8600 Inside Cover

| 7

Cathy Ventrell-Monsees

Sally Dunaway

AARP Foundation Litigation

601 E Street N.W.

Washington, D.C. 20049

(202) 434-2060

Attorneys for Amici Curiae

TABLE OF CONTENTS

INTEREST OF AMICI CURIAE .................... l

SUMMARY OF ARGUMENT ..................... 2

ee Ey Le RCE TE EET CTE EETET 3

L. THE LABOR MANAGEMENT

RELATIONS ACT, RATHER THAN THE

FEDERAL ARBITRATION ACT,

GOVERNS THIS CASE .............. 3

Il. ALEXANDER v. GARDNER-DENVER CO.

WAS CORRECTLY DECIDED AND

SHOULD BE REAFFIRMED .......... 7

Il. THE LARGER CONTEXT OF THIS CASE

DEMONSTRATES THE NEED FOR

FURTHER GUIDANCE ON THE

ARBITRATION OF CIVIL RIGHTS

Fe ee ee y

A. Agreements to Arbitrate Should Be

Knowing and Voluntary ........ 12

B. Arbitration Agreements Should

Not Impose Potentially Onerous

Costs on The Claimant ......... 16

S. Arbitration Procedures Must

Provide Remedies And Safeguards

Coextensive With Those Available

in a Judicial Forum ............ 17

D. Arbitration Must Provide Fair

and Accountable Procedures ..... 20

Arbitration Awards Must Be

Subject to Meaningful Judicial

FS SUES See FUE. iw eh ee 22

SE. . 3. ce detec bes Gables Beeb tides 25

TABLE OF AUTHORITIES

1. Cases

Aetna Insurance Co. v. Kennedy,

ee EE So ou wssupneesé teeeawe 14

Albemarle Paper Co. v. Moody,

DE f6 Rb ac00cesuesed ccoass 17

Alcaraz v. Avnet, Inc.,

933 F. Supp. 1025 (D.N.M. 1996) ........... 18

Alexander v. Gardner-Denver Co..,

GOO ERE. SE bk aeds Ca-cida 2,6,8,9,11,15,22

American Postal Workers Union v. United States

Postal Service, 861 F.2d 211 (9th Cir. 1988) ..... 4

Tree Experts Co. v. Bates,

Fe EY EE ahh cesicc ce cecces 5

Austin v. OwensBrockway Glass Container, Inc.,

78 F.3d 875 (4th Cir.), cert. denied,

ih Bl BE ie a ee 5,7,9

Barrentine v. Arkansas-Best Freight System, Inc.,

Ce ES ee 6,8, 19,23

Battle v. Prudential Insurance Co..,

973 F. Supp. 861 (D. Minn. 1997) ........... 13

v. Great West Life Assurance Co.,

918 F. Supp. 1091 (E.D. Mich. 1996) ......... 13

Bernhardt v. Polygraphic Co. of America,

ESN OE 23

Bishop v. Smith Barney, Inc..,

No. 97 CIV. 4807(RWS), 1998 WL 50210

Rs ce UL EE Ci Sein 665 ce view nce e 13

Brisentine v. Stone & Webster Engineering Corp.,

tpg 2 fb J) ls Re 7

Burnett v. Grattan,

ee tes i cn esh ss 19

Chisolm v. Kidder, Peabody Asset Mgt., Inc.,

966 F. Supp. 218 (S.D.N.Y. 1997) ........... 24

Cole v. Burns International Security Services,

105 F.3d 1465 (D.C. Cir. 1997) .... 5,16,17,24,25

Consolidation Coal Co. v. Local 1643, United Mine

Workers of America, 48 F.3d 125 (4th Cir. 1995) . 5

v. Shearson Lehman Brothers,

105 F.3d 659 (6th Cir.), cert. denied,

ES a 12

DeGaetano v. Smith Barney, Inc.,

983 F. Supp. 459 (S.D.N.Y. 1997) ........... 18

DiRussa v. Dean Witter Reynolds Inc.,

121 F.3d 818 (2d Cir. 1997), cert. denied,

ee eae 12,24

Dickstein v. DuPont,

443 F.2d 783 (ist Cir. 1971) ................. 5

Domino Sugar Corp. v. Sugar Workers Local Union 392,

10 F.3d 1064 (4th Cir. 1993) ................. 5

EEOC v. Associated Dry Goods Corp.,

Se eee 22

EEOC v. River Oaks Imaging and )

67 FEP Cases (BNA) 1243 (S.D. Tex. 1995) _.. 12

EEOC v. Board of Governors of State Colleges,

957 F.2d 424 (7th Cir.), cert. denied,

Es 5 kWUGS eb bai. o's ere 19

EEOC v. United Air Lines, Inc.,

560 F.2d 224 (7th Cir. 1977), cert. denied,

oo ee 20

Excel Corp. v. United Food & Commercial Workers,

102 F.3d 1464 (8th Cir. 1996) ............... 20

First Options of Chicago v. Kaplan,

SS SF 6b.d0 ot. 6% cuweee we 24

Franks v. Bowman Transportation Co.,

II, og Sais bb Wels Sade s 0 8,20

Gibson v. Neighborhood Health Clinics, Inc.,

121 F.3d 1126 (7th Cir. 1997) ............... 13

Gilmer v. Interstate / Johnson Lane Corp..,

500 U.S. 20(1991) ....... 1,3,4,9,15,17,20,22,23

Goodman v. Lukens Steel Co.,

OPT ee ee Pere 8

Great Western Mortgage Corp. v. Peacock,

110 F.3d 222 (3d Cir.), cert. denied,

B90 Gh Bee SINS PU oe 12,13,18

Harrison v. Eddy Potash, Inc.,

112 F.3d 1437 (10th Cir. 1997), petition for cert.

filed, 66 U.S.L.W. 3137 (U.S. Aug. 6, 1997) .. 4,7

Hoteles Condado Beach, La Concha and Convention

Center v. Union de Tronquistas Local 901,

po RT a 20

International Union of Electrical, Radio & Machine

Workers v. Ingram Mfg. Co., 715 F.2d 886

(Sth Cir. 1983), cert. denied, 466 U.S. 928 (1984) 5

Johnson v. Hubbard Broadcasting, Inc.,

940 F. Supp. 1447 (D. Minn. 1996) .......... 18

KMC Co. v. Irving Trust Co.,

pope 8 Ul A ee 14

Kiernan v. Piper Jaffray Cos., Inc.,

137 F.3d 588 (8th Cir. 1998); ............... 24

Kinnebrew v. Gulf Insurance Co.,

67 FEP Cases (BNA) 189 (N.D. Tex. 1994) .... 18

Leonard v. Clear Channel Communications I,

No. 972320-D/A, 1997 WL 581439

CIR IE El BNUUD 05 coe w ete convene. 13

Livadas v. Bradshaw,

Se ees 8,15

Casualty Co. v. Realty Advisory Board,

fe footy. re 5

Mastrobuono v. Shearson Lehman Hutton, Inc.,

SR HR ar STS... ei 6

Maye v. Smith Barney, Inc.,

897 F. Supp. 100(S.D.N.Y. 1995) ........... 13

McDonald v. City of West Branch,

EE 4 SC'S'Sb b's o SESS L 9,23

Mcllroy v. Painewebber Inc.,

989 F.2d 817 (Sth Cir. 1993) ................ 24

Metropolitan Edison Co. v. NLRB,

ee PTE TEE EET Tee 6

Montes v. Shearson Lehman Brothers, Inc.,

128 F.3d 1456 (11th Cir. 1997) .............. 24

Nadeau v. Thomas,

No. 96-20383, 1997 WL 542708 (N_D. Cal.

eet MINED. OPCeIVTR EOE 702K. voeavs... 13

Nelson v. Cyprus Bagdad Copper Corp.,

119 F.3d 756 (9th Cir. 1997), cert. denied,

66 U.S.L.W. 3474 (U.S. Apr. 20, 1988) ... 4,12,14

Nghiem v. NEC Electronic, Inc.,

25 F.3d 1437 (9th Cir.), cert. denied,

IED oid 5 Oi do aired < wis'e we 7

O'Neil v. Hilton Head Hospital,

Tipe) Te Be 6

Occidental Chemical Corp. v. International Chemical

Workers Union,

853 F.2d 1310 (6th Cir. 1988) ................ 5

Paladino v. Avnet Computer Technologies, Inc.,

134 F.3d 1054 (1ith Cir. 1998) ............ 5,17

Patterson v. Tenet Healthcare, Inc.,

113 F.3d 832 (8th Cir. 1997) .............. 5,13

Penny v. United Parcel Service,

128 F.3d 408 (6th Cir. 1997) ................. 7

Posadas de Puerto Rico v. Association de Empleados,

oe To 5

Prudential Insurance Company of America v. Lai,

42 F.3d 1299 (9th Cir. 1994), cert. denied,

I co os ica ovis ei Se. ven 13

Pryner v. Tractor Supply Co.,

109 F.3d 354 (7th Cir.), cert. denied,

tee | eae eee 5,7,8,14,15,18

Rojas v. TK Communications Inc.,

C7 P36 PIO CGE. 1FBB). ... ww ccc eee. 5

Rosenberg v. Merrill Lynch, Pierce, Fenner &

Smith, 76 FEP Cases (BNA) 681

8 8 Bet Peer 10,15,21,22

Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith,

965 F. Supp. 190 (D. Mass. 1997) ........... 14

v. Board of Public Education,

903 F.2d 243 (3d Cir. 1990) ................ 20

Sears v. Bennett,

645 F.2d 1365 (10th Cir. 1981), cert. denied,

| ert taet eee 20

Shankle v. B-G Maintenance Mgt. of Colorado, Inc..,

74 FEP Cases (BNA) 94 (D. Colo. 1997) ...... 16

Shearson/American Express Inc. v. McMahon,

By Ot ee ee 12,23

Sheller by Sheller v. Franks Nursery & Crafts, Inc.,

957 F. Supp. 150 (N.D. Ill. 1997) ............ 10

Sine v. Local No. 992 International Brotherhood,

644 F.2d 997 (4th Cir.), cert. denied,

eg BI one eS 5

State Oil Co. v. Khan,

oe Ee ee 7

Teamsters, Chauffeurs, Warehousemen, Helpers and

Food Processors, Local Union 657 v.

Structures, Inc., 735 F.2d 903

oe Ta Oe ee 20

Tenney Engineering, Inc. v. United Electrical Radio and

Machine Workers, 207 F.2d 450 (3d Cir. 1953) .. §

Textile Workers v. Lincoln Mills,

Sa as 7 Rie Se 4

Tran v. Tran,

Oo ee Se GE 8 bs Pe Swe ce cee cee. 7

United Electrical, Radio & Machine Workers of

America v. Miller Metal Products, Inc.,

23S F.26 220 COCO. BOGS) on. wc ce eee 6

United Paperworkers International Union v. Misco, Inc.,

of YL, RR ee re ae 4

United Steelworkers of America v. Enterprise Wheel

& Car Co., 363 U.S. 593 (1960) .......... 19,23

Vaca v. Sipes,

POR i Peak aes GUN So ykes ees 8

Varner v. National Super Markets, Inc..,

94 F.3d 1209 (8th Cir. 1996), cert. denied,

Fee Gh EE 8 ov hae .o3 40 00s cee e8 7

Walker v. Consolidated Freightways Inc.,

930 F.2d 376 (4th Cir.), cert. denied,

Se es COCO FUCA Ue erect eens 20

2. Docketed Cases

Duffield v. Robertson Stephens & Co. (pending 9th Cir.),

AN CURSE ee OER ee. 3,16

3. Statutes and Legislative Materials

Age Discrimination in Employment Act (“ADEA”), 29

EER ee 2,3

Americans With Disabilities Act, 42 U.S.C. § 12116 .. 2,12

Americans With Disabilities Act, 42 U.S.C. § 12117(a) 2,19

Americans With Disabilities Act, 42 U.S.C. § 12212 .. 2,14

Civil Rights Act of 1964, 42 U.S.C. § 2000e-S(e) ...... 19

Civil Rights Act of 1964, 42 U.S.C. § 2000e-12 ..... 2,12

Civil Rights Act of 1991, § 118, Pub. L. No. 102-166, 105

ne nr ee 2,14

Federal Arbitration Act, 9 U.S.C. § 1 ef seg. .... 2,3,5,6,13

Labor Management Relations Act, 29 U.S.C. § 185 .... 2,3

Railway Labor Act § 3 First (i), (j),

USGS ISS PRRGA@ ............... 2,7

Securities Exchange Act of 1934, 15 U.S.C. § 78s.... 2,12

SE a oe 2,7

H.R. Rep. No. 102-40, Part I, 102d Cong. Ist Sess.,

reprinted in 1991 U.S.C.C.A.N. 549 ........ 2,14

4. Treatises, Law Reviews, and Other Sources

Alleyne, Reginald , Statutory Discrimination Claims:

Rights “Waived” and Lost in the Arbitration

Forum, 13 Hofstra Lab. L. J. 381 (1996) .. 11,16,17

Appellant’s Opening Brief at 34-36, Duffield v.

Robertson Stephens & Co. (pending 9th Cir.)

GS eS eS RS SR 16

viii

Bureau of National Affairs, Basic Patterns in Union

Ce Se es Oli AG Soda... 7

Code of Professional Responsibility for Arbitrators of

Labor Management Disputes, art. I, §C(1)(c),

reprinted at Jay E. Grenig, 26 WEST LEGAL FORMS:

ALTERNATIVE DISPUTE RESOLUTION, App. 11C

i PRS a xaeO Teco eM uae es Sek 21,22

Finkin, Matthew W., “Workers’ Contracts” Under the

United States Arbitration Act: An Essay in

Historical Clarification, 17 Berkeley J. Of

Employ. & Lab. L. 131 (1996) ................ 4

Grodin, Joesph R., Arbitration of Employment

Discrimination Claims: Doctrine and Policy

in the Wake of Gilmer, 14 Hofstra Lab. L. J.

So TRS AR eo ie eee Fe 11,14,17

Hayford, Stephen L., & Evers, Michael J., The Interaction

Between the Employment-at-Will Doctrine and

Employer-Employee Agreements to Arbitrate

Statutory Fair Employment Practices Claims:

Difficult Choices for At-Will Employers, 73 N.C. L.

ee, PGs Sd witadee Sobalads Gals diss 21

Kaufman, Leslie, and Underwood, Anne, Sign or Hit the

Street, NEWSWEEK, June 30, 1997 ............ 10

Kelly, H. David Jr., An Argument for Retaining the Well

Established Distinction Between Contractual and

Statutory Claims in Labor Arbitration, 75 Univ. of

Det. Mercy L. Rev. 1 (1997) ................ 11

Lanni, Adriaan, Note, Protecting Public Rights in Private

Arbitration, 107 Yale L. J. 1157 (1998) ........ 22

Malin, Martin H., Arbditrating Statutory Employment

Claims in the Aftermath of Gilmer,

40 S. Louis U. L. J. 77 (1996)... ... 2.2.2.2... 1]

Matthews, Donna Meredith, Employment Law After

Gilmer: Compulsory Arbitration of Statutory

Anti-Discrimination Rights, 18 Berkeley J. of

Employ. & Lab. L. 347 (1997) ........... 11,14

National Academy of Arbitrators, Statement of the

NAA on Individual Contracts of Employment

and Guidelines on Arbitration of Statutory

Claims Under Employer-Promulgated Systems,

RE Vc sie aw Obes CV ee EMU <« 11

National Academy of Arbitrators Task Force on ADR in

Employment, A Due Process Protocol for

Mediation and Arbitration of Statutory Disputes

Arising Out of the Employment Relationship,

a SN 4 > IRE VERSE CRUD ORS Sess. 21

Nicolau, George, Gilmer v. Interstate/Johnson Lane

Corp.: /ts Ramifications and Implications for

Employees, Employers and Practitioners,

1 U. Pa. J. of Lab. and Employ. Law 175 (1998) . 10

Securities Industry Conference on Arbitration, 7he

Arbitrator’s Manual (1996) ................. 23

Stone, Katherine Van Wezel, Mandatory Arbitration of

Individual Employment Rights: The Yellow Dog

Contracts for the 1990s, 73 Denv. U. L. Rev. 1017

IU Da Sete ie eee eds Neatwes 10

Verespej, Michael A., Sidestepping Court Costs, Industry

EE Ee per ies Sree en 10

INTEREST OF AMICI CURIAE'

The Lawyers’ Committee for Civil Rights Under Law is

a tax-exempt, nonprofit civil rights legal organization founded

in 1963 by the leaders of the American bar at the request of

President Kennedy, to provide legal representation to the

victims of civil rights violations. Its members include former

Attorneys General, former Assistant Attorneys General for the

Civil Rights Division of the Justice Department, former Chairs

of the Equal Employment Opportunity Commission, former

Secretaries of Cabinet Departments, law school deans and

professors, and many of the nation’s leading lawyers. Over the

last thirty-three years, the Lawyers’ Committee and local

Committees in Boston, Chicago, Denver, Los Angeles, Philadel-

phia, San Antonio, San Francisco, and Washington have

represented members of minority groups and women in hun-

dreds of civil rights cases.

The American Association of Retired Persons (“AARP”)

is a nonprofit membership organization of persons age 50 and

older that is dedicated to addressing the needs and interests of

older Americans. More than one-third of AARP’s thirty million

members are employed. One of AARP’s primary objectives is

to strive to achieve dignity and equality in the workplace

through positive attitudes, practices, and policies towards work

and retirement. In pursuit of this objective, AARP has, since

1985, filed more than 150 amicus curiae briefs before this

Court and the Federal appellate and district courts.

This case presents the issue of whether a collective

—— agreement may serve as a compulsory pre-dispute

—and thus preclude a civil action—within

eu scope of this Court’s decision in Gilmer v. Interstate /

' The position that the Lawyers’ Committee and AARP take in the

following brief has not been approved or financed by petitioner or his

counsel. No counsel for any party had any role in authoring this brief. The

written consents of both parties have been filed with the Clerk of the Court

pursuant to Supreme Court Rule 37.3(a).

Johnson Lane Corp., 500 U.S. 20 (1991). Because the Law-

yers’ Committee and AARP represent many unionized employ-

ees, the outcome of this case is critical to its efforts to enforce

the civil rights of those clients. The Court’s decision may also

have collateral effects for arbitration of employment disputes in

all settings, an issue in which the Lawyers’ Committee and

AARP—owing to their civil rights caseload—have an especially

keen interest.

SUMMARY OF ARGUMENT

There is no federal statutory basis for enforcement of the

arbitration provisions of the instant collective bargaining

agreement. The Federal Arbitration Act (FAA) does not extend

to contracts of employment, as is the case here, of workers in

the transportation industry. Similarly, the Labor Management

Relations Act (LMRA) does not permit the general arbitration

provisions at issue to bar judicial enforcement of Petitioner’s

statutory civil rights claim. Under the LMRA, not only must a

waiver of statutory rights under a labor contract be clear and

unmistakable—a requirement that was not satisfied here—but

a union may not bargain away the statutory rights of employees

beyond the labor-management arena.

Enforcement of the collective bargaining agreement’s

arbitration provisions to cover Petitioner’s statutory civil rights

claim would also squarely conflict with this Court’s decision in

Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974). The

interests of the union, which represents the collective, and those

of the individual, whose rights are the subject of the civil rights

acts, can differ significantly. Alexander therefore held that the

prior grievance and arbitration of claims under a collective

bargaining agreement does not preclude a civil action under

Title VII. Because the tension between majoritarian and

individual interests remains as salient today as in the past,

Alexander should be reaffirmed, and Petitioner’s ability to

secure a judicial forum for resolution of his federal statutory

claim should be preserved.

tte ewe i tale Be.

ee ee

More broadly, the types of arbitration provisions that are

intended to cover statutory claims vary widely in quality and

fairness. Many employers simply impose procedures of their

own devising on their applicants and employees, without any

negotiation. As a result, some employees who are victims of

civil rights violations are unable to pursue and obtain effective

relief through the arbitration process. Before enforcing

arbitration provisions for the adjudication of civil rights claims,

courts should ensure that, at a minimum, five factors are met:

(1) the waiver of a judicial forum is knowing and voluntary; (2)

the employee’s exercise of the arbitration right does not require

undue cost or burden; (3) arbitration remedies are coextensive

with those provided by the statute at issue; (4) the arbitration

process is fair; and (5) arbitration awards are subject to mean-

ingful judicial review.

ARGUMENT

L THE LABOR MANAGEMENT RELATIONS

ACT, RATHER THAN THE FEDERAL

ARBITRATION ACT, GOVERNS THIS CASE

The lower court did not directly address the federal

statutory basis for enforcement of the arbitration provisions of

the collective bargaining agreement. There are two possibilities:

(1) the FAA, 9 U.S.C. § 1 ef seq.; or (2) section 301 of the

LMRA, 29 U.S.C. § 185. The FAA codifies enforcement of

arbitration clauses in federal law, and provided the statutory

framework for Gilmer v. Interstate/Johnson Lane Corp., 500

U.S. 20 (1991), which held that a pre-dispute arbitration

agreement imposed by the New York Stock Exchange as a

condition of registration as a broker-dealer extended to the

employee’s claims under the Age Discrimination in Employment

Act, 29 U.S.C. § 621 et seg. (*ADEA”). But as Gilmer

recognized, § 1 of the FAA excludes arbitration of “contracts of

employment of seamen, railroad employees, or any other class

of workers engaged in foreign or interstate commerce.”” 500

U.S. at 25 n.2.

labor contracts would appear to be excluded

from the scope of the FAA, the Court has yet to interpret the

§ 1 exclusion’ and the courts of appeals have been divided for

decades over its scope. Some courts hold that the clause

excludes all labor contracts from coverage,‘ others hold that the

exclusion is limited to contracts of employment in the transpor-

? See Matthew W. Finkin, “Workers’ Contracts” Under the United

States Arbitration Act: An Essay in Historical Clarification, 17 Berk. J.

of Employ. & Lab. L. 131 (1996) (history of the FAA § | exclusion).

> In Gilmer, the Court reserved the issue whether FAA § | excludes

employment contracts, 500 U.S. at 25 n.2, while the dissent would have

found that the FAA categorically excludes them, id. at 36-43. In United

Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 40 n.9 (1987), the

Supreme Court stated, without particular discussion of the issue, that the

FAA did not apply to a labor contract at a paper converting plant. See also

Textile Workers v. Lincoln Mills, 353 U.S. 448 (1957) (applying § 301 of

the Labor Management Relations Act, 29 U.S.C. § 185, to collective

bargaining agreement without mentioning FAA), and id at 466

(Frankfurter, J. dissenting) (concluding that FAA did not apply to labor

contract).

* The Ninth and Tenth Circuits hold that FAA § | excludes all

collective bargaining agreements. See, e.g., American Postal Workers

Union v. United States Postal Service, 861 F.2d 211, 215 n.2 (9th Cir.

1988); Harrison v. Eddy Potash, Inc., 112 F.3d 1437, 1454 (10th Cir.

1997), cert. filed, 66 U.S.L.W. 3137 (U.S. Aug. 6, 1997) (No. 97-232).

But see Nelson v. Cyprus Bagdad Copper Corp., 119 F.3d 756, 759-60 n.4

(9th Cir. 1997) (scope of FAA exemption for individual employment

agreements “remains an open question in this Circuit”), cert. denied, 66

U.S.L.W. 3474 (U.S. Apr. 20, 1988) (No. 97-1137).

tation industry,° and a third group adopts different interpreta-

tions depending on whether the contract is collectively bar-

gained or individual. The Fourth Circuit falls into the last of

these camps, holding that the FAA does not apply to collective

bargaining agreements.’ Yet even by the narrowest interpreta-

* The Second, Third, Seventh, Eighth, and D.C. Circuits have all

adopted this position. Maryland Casualty Co. v. Realty Advisory Board,

107 F.3d 979, 982 (2d Cir. 1997), Tenney Engineering, Inc. v. United

Electrical Radio and Machine Workers, 207 F.2d 450, 452 (3d Cir. 1953)

(en banc), Pryner v. Tractor Supply Co., 109 F.3d 354, 356-60 (7th Cir.),

cert. denied, 118 S. Ct. 295 (1997), Cole v. Burns Int'l Security Services,

105 F.3d 1465, 1470-72 (D.C. Cir. 1997); Patterson v. Tenet Healthcare,

Inc., 113 F.3d 832, 835-36 (8th Cir. 1997). The Eleventh Circuit recently

assumed in one opinion that the FAA applied to an employment contract,

Paladino v. Avnet Computer Technologies, Inc., 134 F.3d 1054, 1056 n.1

(11th Cir. 1998).

* The First, Fifth and Sixth Circuits report conflicting decisions.

Compare Posadas de Puerto Rico v. Association de Empleados, 873 F.2d

479, 482 (ist Cir. 1989); Int’! Union of Electrical, Radio & Machine

Workers v. Ingram Mfg. Co., 715 F.2d 886, 889 (Sth Cir. 1983), cert.

denied, 466 U.S. 928 (1984); Occidental Chemical Corp. v. Int'l Chemical

Workers Union, 853 F.2d 1310, 1315 (6th Cir. 1988) (all holding that FAA

§ 1 excludes collective bargaining agreements) with Dickstein v. DuPont,

443 F.2d 783, 785 (ist Cir. 1971); Rojas v. TK Communications Inc., 87

F.3d 745, 748 (Sth Cir. 1996); Asplundh Tree Experts Co. v. Bates, 71

F.3d 592, 596-602 (6th Cir. 1995) (all holding that FAA § 1 doer not

exclude individual contracts of employment, other than in the

transportation sector).

” Compare Austin v. Owens—Brockway Glass Container, Inc., 78 F.3d

875, 879 (4th Cir.), cert. denied, 117 S. Ct. 432 (1996), Consolidation

Coal Co. v. Local 1643, United Mine Workers of America, 48 F.3d 125,

128-29 (4th Cir. 1995); Domino Sugar Corp. v. Sugar Workers Local

Union 392, 10 F.3d 1064, 1067 (4th Cir. 1993); Sine v. Local No. 992 Int'l

tion of the exclusion, this collective bargaining agreement would

be excluded from the FAA because Mr. Wright is employed in

the transportation industry as a longshoreman. (JA 50a.)

Moving then to the second possible statutory basis for

respondent’s enforcement of this agreement, the LMRA, two

obstacles were not recognized by the court below. First, a

waiver of statutory rights under a labor contract must be clear

and unmistakable, Metropolitan Edison Co. v. NLRB, 460 U.S.

693, 708 (1983), while courts proceeding under the FAA must

indulge every ambiguity in favor of arbitration. Mastrobuono

v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 62 (1995).

Here, the agreement failed to recite clearly and unmistakably

that members of the bargaining unit would be barred from

bringing private rights of action under the ADA or other civil

rights statutes. Second, a union does not have license to

bargain away the statutory rights of employees beyond the

labor-management arena. Barrentine v. Arkansas-Best Freight

Sys., Inc., 450 U.S. 728, 740-41 (1981). Indeed, this Court has

specifically held that Title VII rights could not be bargained

away in a collective bargaining agreement. Alexander v.

Gardner-Denver Co., 415 U.S. 36, 51-52 (1974). These

statutory standards, rather than the commercially-oriented

provisions of the FAA, properly govern this case and compel

reversal of the judgment below.

Brotherhood, 644 F.2d 997, 1002 (4th Cir.), cert. denied, 454 U.S. 965

(1981); United Electrical, Radio & Machine Workers of America v. Miller

Metal Products, Inc., 215 F.2d 221, 224 (4th Cir. 1954) (FAA § | excludes

collective bargaining agreements), with O ‘Neil v. Hilton Head Hospital,

115 F.3d 272, 274 (4th Cir. 1997) (“contracts of employment” exclusion

covers individual employment agreements only in the transportation

industry).

Il. ALEXANDER v. GARDNER-DENVER CO. WAS

CORRECTLY DECIDED AND SHOULD BE

REAFFIRMED

As recently as this Term, this Court emphasized that “it

is this Court’s prerogative alone to overrule one of its prece-

dents.” State Oil Co. v. Khan, 118 S. Ct. 275, 284 (1997). Yet

in Austin v. Owens-Brockway Glass Container, Inc., 78 F.3d

875, 880 (4th Cir.), cert. denied, 117 S. Ct. 432 (1996), the

Fourth Circuit preemptively declared Alexander effectively

overruled by Gilmer. No other Circuit has taken this step."

Alexander was correctly decided and should be reaf-

firmed. Petitioner and his amici present a variety of arguments

in support of Alexander. We join in these arguments, and

summarize here just a few of the problems presented when

unions are placed in exclusive charge of workplace civil nights

enforcement. To put this matter in perspective, antidiscrimina-

tion clauses are nearly universal in labor contracts.” Yet it is

unions, not employees, that decide which grievances to

pursue."° They may turn down claims that they do not want to

* Penny v. United Parcel Serv., 128 F.3d 408, 414 (6th Cir. 1997),

Brisentine v. Stone & Webster Eng'g Corp., 117 F.3d 519, 526 (11th Cir.

1997); Harrison v. Eddy Potash, Inc., 112 F.3d 1437, 1453 (10th Cir.),

petition for cert. filed, 66 U.S.L.W. 3137 (U.S. Aug. 6, 1997) (No.

97-232); Pryner v. Tractor Supply Co., 109 F.3d 354, 363 (7th Cir.), cert

denied, 118 S. Ct. 294, 295 (1997); Varner v. National Super Markets,

Inc., 94 F.3d 1209, 1213 (8th Cir. 1996), cert. denied, 117 S. Ct. 946

(1997); Tran v. Tran, 54 F.3d 115, 117 (2d Cir. 1995).

* The Bureau of National Affairs, Basic Patterns in Union Contracts

131-32 (13th ed. 1992) (survey of CBAs revealed that 97% of them

included such clauses).

' A partial exception to this is the Railway Labor Act § 3 First (i), (j),

45 U.S.C. § 153 First (i), (j), and 45 U.S.C. § 184, which creates a

pursue, whether to conserve political capital for other battles or

for other reasons unrelated to the merits of the claims. Barren-

tine, 450 U.S. at 742; Vaca v. Sipes, 386 U.S. 171, 191-92

(1967). This approach, while perhaps fitting for enforcement of

purely contractual rights, is incompatible with the individual

rights at stake under the civil rights acts. As this Court recog-

oa ger 415 US. at 51, Title VII “concerns not

majoritarian processes, but an individual’s right to equal

employment opportunities.” Indeed, history has shown that a

union’s majoritarian interests periodically clash with the

interests of minority employees, particularly in the area of

seniority. See, e.g., Franks v. Bowman Transportation Co. , 424

U.S. 747, 773-79 (1976).

Unions, too, would buckle under the demands of full-

time civil rights enforcement. Their ability to turn down civil

rights grievances against employers would be sharply limited

because of the risk of incurring their own civil rights liability.

Goodman v. Lukens Steel Co., 482 U.S. 656, 664-69 (1987).

The hydraulic pressure would put unions to an unholy choice:

either divert limited resources to civil rights claims, potentially

driving the unions into receivership or extinction, or drop the

antidiscrimination provisions from labor contacts, thereby

depriving employees of the option of filing a grievance to

challenge discriminatory practices. Even though antidiscrimina-

tion clauses have been with us for decades, employers only

recently began to demand that discrimination claims be grieved.

These demands exploit the holding in Gilmer to serve employ-

ers’ goals of barring civil litigation and imposing financial and

statutory nght for employees to submit grievances to adjustment boards.

" See also Livadas v. Badshaw, 512 U.S. 107, 127 n.21 (1994)

(reiterating concern from A/exander about majoritarian processes); Pryner,

109 F.3d at 363 (rejecting employer's position which “delivers the

enforcement of the rights of these minorities into the hands of the

majority”).

political pressure on unions.

The preclusive effect that arbitration awards should have

on later proceedings is also a significant question. Austin, 78

F.3d at 878 n.1, held that an applicable labor arbitration

agreement “ousts a court of jurisdiction... .” In the present

case, the district court relied upon Austin and dismissed the

action without prejudice for lack of subject matter jurisdiction,

and the Fourth Circuit affirmed. However, this Court in

Alexander held that an unsuccessful arbitration under a collec-

tive bargaining agreement does not foreclose a de novo civil

action by the employee under Title VII. Alexander, 415 U.S.

at 59-60; see also McDonald v. City of West Branch, 466 U.S.

284, 292 (1984) (unappealed arbitration of § 1983 civil rights

claim has no collateral effect on subsequent judicial proceed-

ings). The rulings of the courts below cannot be squared with

Alexander, and this Court should reaffirm that grieving and

arbitrating a statutory civil rights claim under a collective

bargaining agreement is not a predicate to maintaining a judicial

action to enforce statutory rights.

iil THE LARGER CONTEXT OF THIS CASE

DEMONSTRATES THE NEED FOR FURTHER

GUIDANCE ON THE ARBITRATION OF

CIVIL RIGHTS CLAIMS

Gilmer did not envision that the use of arbitration

processes to resolve statutory civil rights claims would entail a

transformation of the respective rights of employers and

members of a protected class. Indeed, it presumed that parties

to an arbitration agreement would “‘not forgo the substantive

rights afforded by the statute,” and that the arbitral forum

would afford claimants a fair opportunity to present their claims

and obtain legal and equitable remedies. Gilmer, 500 U.S. at

26, 31-32 (quoting Mitsubishi Motors Corp. v. Soler Chry-

sler-Plymouth, Inc., 473 U.S. 614, 628 (1985)). George

Nicolau, a past president of the National Academy of Arbitra-

tors, observed that a voluntary arbitration system living up to

the promise of Gilmer would, of its own accord, attract

employees who desired a prompt hearing of their claims."

Contrary to these aspirations, some employers have

abused the opening presented by Gilmer to pursue an agenda

inimical to civil rights. The labor market has become flooded

with arbitration agreements,’ flowing down even to high

school-age store clerks. See Sheller by Sheller v. Frank's

Nursery & Crafts, Inc., 957 F. Supp. 150, 154 (N_D. Ill. 1997)

(teenage cashiers bringing sex harassment suit against retailer

barred by arbitration clause in their employment applications).

These “agreements,” often imposed involuntarily on a captive

workforce, vary widely in quality and fairness. Some agree-

ments that have come to public attention force workers to bear

half of the often substantial costs of arbitration, surrender rights

to damages and attorneys’ fees, or proceed under one-sided

rules. See Rosenberg v. Merrill Lynch, Pierce, Fenner &

Smith, 76 F_E.P. Cases (BNA) 681, 694-700 (D. Mass. 1998)

(finding “structural bias in the system” caused by the fact that

the New York Stock Exchange arbitration system is dominated

by the securities industry). Nicolau, supra note 12, at 181—182

(describing a plan that waived punitive damages and allowed no

"? See, e.g., George Nicolau, Gilmer v. Interstate/Johnson Lane Corp.:

Its Ramifications and Implications for Employees, Employers and

Practitioners, 1 U. PA. J. OF LAB. AND EMPLOY. LAW 175, 189-90 (1998)

(forthcoming).

" See, e.g., Michael A. Verespej, Sidestepping Court Costs, Industry

Week, Feb. 2, 1998, at 68 (more than 400 employers, with a combined 4.5

million employees, have subscribed to some form of alternative dispute

resolution for employment claims, mostly within the past two years); Leslie

Kaufman and Anne Underwood, Sign or Hit the Street, Newsweek, June

30, 1997, at 48 (noting that employers such as ITT, JCPenney, Brown &

disputes).

discovery besides an exchange of exhibits and witness lists).'*

Concerns with the fairness of imposed arbitration procedures

have recently led the National Academy of Arbitrators to state

that it “opposes .nandatory employment arbitration as a

condition of employment when it requires waiver of direct

access to either a judicial or administrative forum for the pursuit

of statutory rights,” and to urge its members conducting such

arbitrations to conduct their own independent evaluation of the

fairness of the procedures.'* Many arbitrators, of course, may

not do so because their livelihoods are at stake. Without

adequate procedural and substantive safeguards, a worker’s

involuntary “agreement” to arbitrate may thus become nothing

more than a prospective waiver of civil rights, an approach that

this Court decisively rejected in Alexander, 415 U.S. at 51-52

(“an employee’s rights under Title VII are not susceptible of

prospective waiver’).

'* Commentators have written widely about the abuses of arbitration

in the employment arena. See, e.g, Reginald Alleyne, Statutory

Discrimination Claims: Rights “Waived” and Lost in the Arbitration

Forum, 13 Hofstra Lab. L. J. 381 (1996); Joseph R. Grodin, Arbitration of

Employment Discrimination Claims: Doctrine and Policy in the Wake of

Gilmer, 14 Hofstra Lab. L. J. 1 (1996); H. David Kelly, Jr., An Argument

for Retaining the Well Established Distinction Between Contractual and

Statutory Claims in Labor Arbitration, 75 Univ. of Det. Mercy L. Rev. 1

(1997); Martin H. Malin, Arbitrating Statutory Employment Claims in the

Aftermath of Giimer, 40 St. Louis U. L. J. 77 (1996), Donna Meredith

Matthews, Employment Law After Gilmer: Compulsory Arbitration of

Statutory Anti-Discrimination Rights, 18 Berkeley J. of Employment &

Lab. L. 347 (1997); Katherine Van Wezel Stone, Mandatory Arbitration

of Individual Employment Rights: The Yellow Dog Contracts for the

1990s, 73 Denv. U. L. Rev. 1017 (1996).

'S See National Academy of Arbitrators, Statement of the NAA on

Individual Contracts of Employment and Guidelines on Arbitration of

Statutory Claims Under Employer-Promulgated Systems, May 21, 1997

(available at http://www.naarb org/guidelines. html).

Numerous, unresolved issues surround the arbitration of

civil rights claims.'* Unlike the arbitration of claims in the

securities industry, which is regulated by the Securities and

Exchange Commission, see 15 U.S.C. § 78s; Shearson/Ameri-

can Express Inc. v. McMahon, 482 U.S. 220, 233-34 (1987),

there is no overarching federal executive authority for civil

rights arbitration.'’ Because the lower courts are divided over

these issues, there is a pressing need for clarity as to the

required elements of a fair and effective arbitration process.

A. Agreements to Arbitrate Should Be

Knowing and Voluntary

Amici have witnessed many attempts by employers to

impose arbitration unilaterally as a condition of continued

employment or consideration for employment. For instance,

some employers include unilateral arbitration provisions in their

employment manuals or written policies. See EEOC v. River

Oaks Imaging and Diagnostic, 67 F.E.P. Cases (BNA) 1243

(S.D. Tex. 1995) (employer adopts arbitration agreement in the

'* Already during the present Term, the Court has denied certiorari in

several cases raising issues about arbitration of civil rights claims.

DiRussa v. Dean Witter Reynolds Inc., 121 F.34818 (2d Cir 1997) (denial

of attorneys’ fees to prevailing plaintiff), cert. denied. 118 S. Ct. 695

(1998); Nelson v. Cyprus Bagdad Copper Co., 119 F.3d 756 (9th Cir.

1997) (arbitration clause in employment manual not enforceable), cert.

denied, 66 U.S.L.W. 3474 (US. Apr. 20, 1998) (No. 97-1137); Great

Western Mortgage Corp. v. Peacock, 110 F.3d 222 (3d Cir.) (enforced

arbitration clause over employee's objection that the clause was coercive),

cert. denied, 118 S. Ct. 299 (1997); Cosgrove v. Shearson Lehman Bros..

105 F.3d 659 (6th Cir.) (unpublished order) (arbitration agreement in

employment application enforceable), cert. denied, 118 S. Ct. 169 (1997).

" The EEOC’s regulatory authority under Title VII and the ADA is

largely hortatory. 42 U.S.C. § 2000e-12 (Title VII); 42 U.S.C. § 12116

(Americans With Disabilities Act).

midst of an EEOC investigation). While some courts have

rejected such involuntary programs,'* most courts have upheld

the right of employers to enforce these policies based solely on

the willingness of employees to continue working, or of

applicants to continue applying. '®

The Circuits are split on the question whether relinquish-

ment of the federal judicial forum and jury right requires a

knowing and voluntary waiver, or is governed instead by

ordinary contract principles. Most courts have applied a

contract standard, holding that arbitration must be compelled

except in cases tainted by fraud or coercion.” However, the

Ninth Circuit, in Prudential Insurance Company of America v.

* Sportelli v. Circuit City Stores, Inc., No. CIV. A. 97-5850, 1998

WL 54335 (E.D. Pa. Jan 13, 1998) (finding that employee opted out of

company arbitration program); Nadeau v. Thomas, No. 96—20383, 1997

WL 542708 at *3—4 (N.D. Cal. Aug 21, 1997).

'* Nghiem v. NEC Electronic, Inc., 25 F.3d 1437, 1439-40 (9th Cir.)

(enforcing policy in employment manual), cert. denied, 513 U.S. 1044

(1994); Bishop v. Smith Barney, Inc., No. 97 CIV. 4807(RWS), 1998 WL

50210 (S.D.N.Y. Feb. 6, 1998) (enforcing arbitration clause in employee

FAA); Leonard v. Clear Channel Communications I, No. 972320-D/A,

1997 WL 581439 (W.D. Tenn. July 23, 1997) (enforcing unsigned.

unacknowledged arbitration agreement in employment manual)

*° See, e.g., Patterson v. Tenet Healthcare, Inc., 113 F.3d 832.

834-35 (8th Cir. 1997); Great Western Mortgage Corp. v. Peacock, 110

F.3d at 229-30; Battle v. Prudential Ins. Co., 973 F. Supp. 861, 864-67

(D. Minn. 1997); Beauchamp v. Great West Life Assurance Co., 918 F.

Supp. 1091, 1097-98 (E.D. Mich. 1996); Maye v. Smith Barney, Inc., 897

F. Supp. 100, 107 (S.D.N.Y. 1995); see also Gibson v. Neighborhood

Health Clinics, Inc., 121 F.3d 1126, 1129-30 (7th Cir. 1997) (noting split

of authority and declining to decide whether contract or waiver standard

applies).

Lai, 42 F.3d 1299, 1304—05 (9th Cir. 1994), cert. denied, 516

U.S. 812 (1995), has held that the “text and legislative history

of Title VII" required that an employee “knowingly agree[] to

submit such disputes to arbitration.”

The “knowing and voluntary” standard flows from the

standard generally applied to the waiver of a civil jury trial. See

Aetna Ins. Co. v. Kennedy, 301 U.S. 389, 393 (1937) (“as the

right of [civil] jury trial is fundamental, courts indulge every

reasonable presumption against waiver”); KMC Co. v. Irving

Trust Co., 757 F.2d 752, 756 (9th Cir. 1985) (courts “over-

whelmingly appl[y] the knowing and voluntary standard” to

determine “the validity of a contractual waiver of [a civil] jury

trial”); Grodin, supra note 14, at 36-39. A waiver standard

also comports with the history of the Civil Rights Act of 1991.

Section 118 of the Act states that “[w]here appropriate and to

the extent authorized by law, the use of alternative means of

dispute resolution, including . . . arbitration, is encouraged to

resolve disputes arising under the Acts or provisions of Federal

law amended by this title.” Pub. L. No. 102-166, § 118, 105

Stat. 1071, 1081 (1991). The Seventh Circuit interpreted this

provision in Pryner v. Tractor Supply Co., 109 F.3d 354, 363

** See also Nelson v. Cyprus Bagdad Copper Corp., 119 F.3d 756,

760-61 (9th Cir. 1997) (applying the holding of Lai to the ADA), cert.

denied, 66 U.S.L.W. 3474 (U.S. Apr. 20, 1998) (No. 97-1137); Hooters of

America, Inc. v. Phillips, C_A No. A:96-3360—22, at 53 (D.S.C. Mar. 12,

1998) (applying knowing and voluntary standard to review of arbitration

Clause asserted by employer in sex harassment case), Rosenberg v. Merrill

Lynch, Pierce, Fenner & Smith, 965 F. Supp. 190, 202 (D. Mass. 1997)

(applying knowing and voluntary standard to waiver of jury right in sex

discrimination case); Matthews, supra note 14, at 381-85.

® See also H.R. Rep. No. 102-40, Part I, 102d Cong. Ist Sess.,

reprinted in 1991 U.S.C.C.A.N. 549, 635 (stating that this section was

“intended to supplement, not supplant, the remedies provided by Title

VII"), 42 U.S.C. § 12212 (same provision for the ADA).

(7th Cir.), cert. denied, 118 S. Ct. 295 (1997) (Posner, C.J.), to

hold that arbitration would not be “appropriate when it is not

agreed to by the worker but instead is merely imposed,” as by

a collective bargaining agreement. The Pryner court also relied

on unchallenged history, observing that “by being forced into

binding arbitration [employees] would be surrendering their

right to trial by jury — a right that civil rights plaintiffs .

fought hard for and finally obtained in the 1991 amendments to

Title VII.” Jd at 362. See also Rosenberg, 76 F.E.P. Cases

(BNA) at 694 (1991 Act affirmed primacy of jury trials for Title

VII cases).

The collective bargaining agreement in this case was not

a knowing and voluntary waiver of Petitioner’s rights under the

ADA. As this Court noted in Alexander, while unions are

generally empowered to waive the bargaining unit’s statutory

rights related to collective activity, such as the right to strike,

individual civil rights are different:

Title VII's strictures are absolute and represent

a congressional command that each employee be

free from discriminatory practices. Of necessity,

the rights conferred can form no part of the

collective-bargaining process since waiver of

these rights would defeat the paramount con-

gressional purpose behind Title VII. In these

circumstances, an employee’s nights under Title

VII are not susceptible of prospective waiver.

Alexander, 415 U.S. at 51-52. This Court has reaffirmed this

point twice since Alexander, both in Gilmer, 500 U.S. at 35

(under a collective bargaining agreement, employees do not

agree to arbitration of their own statutory claims), and in

Livadas v. Bradshaw, 512 U.S. 107, 127 n.21 (1994) (reiterat-

ing concern from Alexander about majoritarian processes) Any

waiver of “an individual’s rights to equal opportunities,”

ae 415 U.S. at 51, should be on a “knowing and

voluntary” basis, under which the employee is given an in-

formed and individual choice either to accept arbitration and its

presumed benefits or to retain his or her right to a judicial forum

and jury trial.

B. Arbitration Agreements Should Not Impose

Potentially Onerous Costs on The Claimant

If arbitration were fair, it could be voluntary and many

employees may sign up for it. As long as employers are free to

impose arbitration on their employees, however, they can add

onerous terms without loss of employee participation. Thus,

employers have generally sought to shift some or all of the costs

of arbitration to the complaining party. See, e.g., Appellant’s

Opening Brief at 34-36, Duffield v. Robertson Stephens & Co.

(pending 9th Cir.) (No. 97-15698) (record of proceeding

established that arbitrators in the securities field charge fees

starting from $1,000 per half-day, mounting up to a total of

$82,800 in one complex case, and such fees are imposed on

each party); Alleyne, supra note 14, at 410-11 (noting that

arbitrators’ fees can run from hundreds to thousands of dollars).

An employee notified by letter, as often happens in practice, that

she must within a few days pay several hundred—or even

thousands of—dollars in fees prior to arbitration can be deterred

from pursuing even a meritorious claim. Common sense

suggests that this happens frequently.

A few courts confronting this situation have barred fee

shifting.” Yet this issue is only in its infancy and it remains to

® See, e.g., Cole v. Burns Int'l Security Services, 105 F.3d 1465,

1485 (D.C. Cir. 1997) (interpreting the fees provision from the arbitration

agreement to apply only to the employer, and holding that it is

impermissible to charge the employee for all or part of the arbitrator’s fees

and expenses); McWilliams v. Logicon, Inc., No. CIV. A. 95-2500-GTV,

1997 WL 383150, at *2 (D. Kan. June 4, 1997) (holding that employer

must pay the arbitrator's fee); Shankle v. B-G Maintenance Mgt. of

Colorado, Inc., 74 F E.P. Cases (BNA) 94, 96 (D. Colo. 1997) (contract

be seen whether other courts may resolve the issue differently.”

G Arbitration Procedures Must Provide

Remedies And Safeguards Coextensive With

Those Available in a Judicial Forum

Gilmer recognized as a precondition to arbitration that

the parties may “not forgo the substantive rights afforded by the

statute; [the agreement] only submits to their resolution in an

arbitral, rather than a judicial, forum.” Gilmer, 500 U.S. at 26

(quoting Mitsubishi, 473 U.S. at 628). As Congress has

decided, a panoply of remedies and statutory safeguards is

essential to deter and remedy discrimination, both in particular

cases and throughout our society. Albemarle Paper Co. v.

Moody, 422 U.S. 405, 416 (1975) (remedies available under

Title VII constitute a “complex legislative design directed at an

historical evil of national proportions”).

Notwithstanding Gilmer’s careful reservation, employ-

ers have forced workers to waive statutory rights and remedies.

See, e.g., Paladljp #. Avnet Computer Technologies, Inc., 134

F.3d 1054, 1060-62 (11th Cir. 1988) (arbitration clause that

requiring plaintiff to shoulder one-half of fee for arbitrator, including half

of a $6000 deposit, held unenforceable). As the D.C. Circuit held in Cole,

105 F.3d at 1485, a plaintiff “could not be required to agree to arbitrate his

public law claims as a condition of employment if the arbitration

agreement required him to pay all or part of the arbitrator's fees and

expenses.” See also Alleyne, supra note 14, at 410-11 (noting the risks of

excess costs to the integrity of arbitration, no matter who pays); Grodin,

supra note 14, at 44-45 (elimination, or at least lowering, of financial

barriers essential to fair arbitration).

* Cf. Rollins Inc. v. Foster, No. Civ.A. 97-T-945-N, 1998 WL 25702,

at *9-11 (M.D. Ala. Jan. 20, 1998) (rejecting unconscionability challenge

to arbitration clause in homeowner's agreement with pest control company

that required homeowner to pay arbitration fees).

EST AVAILABLE COPY

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provides only for award of contract damages) (Cox and Tjoflat,

JJ., concurring); DeGaetano v. Smith Barney, Inc., 983 F.

Supp. 459, 464-70(S.D.N. Y. 1997) (barring award of statutory

attorneys’ fees); Johnson v. Hubbard Broadcasting, Inc., 940

F. Supp. 1447, 1462 (D. Minn. 1996) (holding that if arbitrator

finds that provision requiring both parties to bear own attor-

neys’ fee bars award of fee to prevailing plaintiff, agreement

would be unenforceable); Alcaraz v. Avnet, Inc., 933 F. Supp.

1025, 1027-28 (D.N.M. 1996) (employee’s Title VII and ADA

claims not subject to arbitration because agreement did not

provide full range of statutory damages). While these efforts to

limit the rights of claimants are stopped by some courts such as

the above, other courts let them pass and the mere existence of

such efforts shows that some employers cannot resist the

temptations they think Gilmer allows them.

The Third Circuit has given tacit approval to this

approach, allowing that such terms may be enforced by an

arbitrator. In Great Western Mortgage Corp. v. Peacock, 110

F.3d 222, 23 1-32 (3d Cir.), cert. denied, 118 S. Ct. 299 (1997)

the arbitration agreement included provisions waiving the

employee’s right to attorneys’ fees and punitive damages, and

imposing a two-year statute of limitations on her state law

discrimination claims. The court did not hold the terms

unenforceable as a matter of law, but instead referred the

matters to the arbitrator to determine whether the plaintiff had

in fact agreed to abandon statutory rights. See also Kinnebrew

v. Gulf Insurance Co., 67 F.E.P. Cases (BNA) 189, 191 (N.D.

Tex. 1994) (referring claim to arbitration under policy that bars

punitive damages, injunctive relief and attorneys’ fees). By

referring these matters to arbitration, the courts may simply

have deferred litigation until the time to enforce the award, thus

undermining the expectation that arbitration will afford prompt

and inexpensive relief. See Pryner, 109 F.3d at 362 (noting the

“spectre” of satellite litigation).

In this case, the contract denied Mr. Wright not only his

personal right to control his own claim, but also sufficient time

to make his claim. Under the collective bargaining agreement

at issue, Mr. Wright was allowed only 48 hours to file a

grievance, the first step for invoking arbitration. (JA 55a.) In

contrast, under the Americans with Disabilities Act, Mr. Wright

would otherwise have had 300 days to file a charge with the

Equal Employment Opportunity Commission. 42 U.S.C.

§ 12117(a) (adopting Title VII enforcement procedures), 42

U.S.C. § 2000e—5S(e) (providing time for filing charges).

The period provided by many collective bargaining

short-circuits the schedule set forth by Congress for

reporting violations of civil rights. Such a limitations period

should not be enforced because it fails “to take into account

practicalities that are involved in litigating federal civil nghts

claims and policies that are analogous to the goals of the Civil

Rights Act.” Burnett v. Grattan, 468 U.S. 42, 49 (1984)

(holding that the district court erred when it borrowed Mary-

land’s six-month limitations period for administrative filing of

civil rights charge for section 1981 lawsuit).

Arbitration under collective bargaining agreements also

hobbles potential injunctive relief. Arbitrators have no power

to invalidate or refuse to enforce parts of a collective bargaining

agreement. Barrentine, 450 U.S. at 745. As this Court held in

United Steelworkers of America v. Enterprise Wheel & Car

Co., 363 U.S. 593, 597 (1960):

[A]n arbitrator is confined to interpretation and

application of the collective bargaining agree-

ment; he does not sit to dispense his own brand

of industrial justice. He may of course look for

guidance from many sources, yet his award is

legitimate only so long as it draws its essence

from the collective bargaining agreement.

Courts, by contrast, may enjoin labor agreements. See, ¢.g.,

EEOC v. Board of Governors of State Colleges, 957 F.2d 424,

429-31 (7th Cir.) (provision that precludes arbitration of any

claim after employee files an EEOC charge violates anti-

retaliation section of the ADEA), cert. denied, 506 U.S. 906

(1992), Schafer v. Board of Public Education, 903 F.2d 243,

248 (3d Cir. 1990) (provision of CBA making childrearing leave

available for up to one year only for female teachers violates

Title VII per se). Likewise, arbitrators cannot modify labor

agreements,”* while courts are allowed to do so. Unless the

institution of labor arbitration were to be radically transformed,

arbitrators will always lack the power to provide remedies

outside of the agreement itself.

D. Arbitration Must Provide Fair and

Accountable Procedures

The Court established in Gilmer that arbitration may

substitute for civil litigation only when the alternative forum

affords fundamental procedural protections. Gilmer, 500 U.S.

® See, e.g., Excel Corp. v. United Food & Commercial Workers, 102

F.3d 1464, 1468 (8th Cir. 1996): Walker v. Consolidated Freightways Inc.,

930 F.2d 376, 381 (4th Cir.), cert. denied, 502 U.S. 1004 (1991); Hoteles

Condado Beach, La Concha and Convention Center v. Union de

Tronquistas Local 901, 763 F.2d 34, 41 (ist Cir 1985), Teamsters,

Chauffeurs, Warehousemen, Helpers and Food Processors, Local Union

657 v. Stanley Structures, Inc., 735 F.2d 903, 905 (Sth Cir. 1984).

* This Court approved an award of retroactive seniority in Franks v.

Bowman Transportation Co., 424 U.S. 747, 773-79 (1976), over an

employer's argument that it would violate seniority expectations of other

employees in the bargaining unit. See also Sears v. Bennett, 645 F.2d

1365, 1378 (10th Cir. 1981) (award of seniority to plaintiffs within broad

discretion of court), cert. denied, 456 U.S. 964 (1982). EEOC v. United Air

Lines, Inc., 560 F.2d 224, 234 (7th Cir. 1977) (CBA may be modified to

grant enhanced seniority), cert. denied, 434 U.S. 1063 (1978).

at 30-32.”” However, the case law reveals instances in which

against employees. In Rosenberg v. Merrill Lynch, Pierce,

Fenner & Smith, 76 F.E.P. Cases (BNA) 681, 694-700 (D.

Mass. 1998), for example, the district court reviewed the New

York Stock Exchange arbitration system and held that domina-

tion of decision-making by agents of the securities industry

rendered it an unfit forum for civil rights actions. See also

Hooters of America, Inc. v. Phillips, C_.A No. A:96-3360-22

(D.S.C. Mar. 12, 1998) (rejecting arbitration policy that barred

allowable damages, and barred award of attorneys’ fees).

A significant problem in the labor field is the secrecy of

confidential,” yet publication of decisions in the civil rights field

”” See generally National Academy of Arbitrators Task Force on ADR

in Employment, A Due Process Protocol for Mediation and Arbitration of

Statutory Disputes Arising out of the Employment Relationship, May 9,

1995 (available at http://www.naarb.org/protocol. html) (signed by

representatives of the National Academy of Arbitrators, the American

Arbitration Associations, the Labor & Employment Section of the

American Bar Association, and other organizations). See also Stephen L.

Hayford & Michael J. Evers, The Interaction Between the Employment-at-

Will Doctrine and Employer-Employee Agreements to Arbitrate Statutory

Fair Employment Practices Claims: Difficult Choices for At-Will

Employers, 73 N.C. L. Rev. 443, 489-90 (1995) (enforceable arbitration

system would have to include right to counsel, adequate discovery, mutual

selection of arbitrator, ability to call witnesses, and anti-retaliation

commitment to cooperating witnesses).

™* See Code of Professional Responsibility for Arbitrators of Labor

Management Disputes, art. Il, § C(1)(c) (making it a “violation of

professional responsibility for an arbitrator to make public an award

serves an irreplaceable public good. Private civil rights litiga-

tion is the engine that drives enforcement of America’s

antidiscrimination laws. EEOC v. Associated Dry Goods Corp.,

449 U.S. 590, 602 (1981) (“[t}he private right of action remains

an important part of Title VII's scheme of enforcement . .

[and] Congress considered the charging party a ‘private

attorney general,’ whose role in enforcing the ban on discrimi-

nation is parallel to that of the Commission itself”); Alexander,

415 US. at 45 (“Congress gave private individuals a significant

role in enforcement process of Title VII”). Published opinions

are integral to this function: they are necessary to educate

employers and employees alike about the norms of civil rights

law. See Rosenberg, 76 F.E.P. Cases (BNA) at 687-88,

Adriaan Lanni, Note, Protecting Public Rights in Private

Arbitration, 107 Yale L. J. 1157, 1160-61 (1998) (encouraging

disclosure of arbitration decisions); Stone, supra note 14, at

1043-47 (discussing educational function of civil rights

opinions). In Gilmer, the Court recognized the need for public

opinions, noting that enforcement of the U-4 form arbitration

clause would not harm civil rights enforcement because New

York Stock Exchange rules require written and publicly

available arbitration awards, and “judicial decisions addressing

ADEA claims will continue to be issued because it is unlikely

that all or even most ADEA claimants will be subject to

arbitration agreements.” 500 U.S. at 31-32. Without a

mechanism to disseminate the results of civil rights arbitrations,

an essential element of civil rights litigation will be lost.

E. Arbitration Awards Must Be Subject to Meaningful

Judicial Review

In Gilmer, the Court stated that judicial review is a

corrective to errant arbitrators. 500 U.S. at 30-31. Yet the

without consent of the parties”), reprinted at Jay E. Grenig, 26 WEST

LEGAL FORMS: ALTERNATIVE DISPUTE RESOLUTION, App. 11C at 770

(1995).

awards of commercial and labor arbitrations, based on interpre-

Steelworkers, 363 U.S. at 597-99 (where arbitrator’s award

concerns construction of collective bargaining agreement, court

lacks authority to overrule the arbitrator’s interpretation);

Bernhardt v. Polygraphic Co. of Am., 350 U.S. 198, 203 n.4

(1956) (no review of arbitrator’s error in interpreting contract).

This area must be reevaluated in light of the expansion of

arbitration to the civil rights arena.

Review of arbitration awards of statutory claims must

rise to a level “sufficient to ensure that arbitrators comply with

the requirements of the statute.” Shearson/American Express

v. McMahon, 482 U.S. 220, 232 (1987); see also Gilmer, 500

U.S. at 32 n.4 (making same point in context of ADEA). The

appropriate level of review should necessarily be higher in a

case reviewing a statutory employment discrimination claim

than in one reviewing garden-variety labor disputes, because

arbitrators have “authority only to resolve questions of contrac-

tual rights.” Jd. at 34; see, e.g., McDonald v. City of West

Branch, 466 U.S. at 290 (rejecting suggestion that arbitration

can “provide an adequate substitute for a judicial proceeding in

the federal statutory and constitutional rights that

§ 1983 is designed to safeguard”), Barrentine, 450 U.S. at 737

(“[w]hile courts should defer to an arbitral decision where the

employee’s claim is based on rights arising out of the collective

bargaining agreement, different considerations apply where the

employee’s claim is based on rights arising out of a statute

designed to provide minimum substantive guarantees to

individual workers”).

Unfortunately, however, most courts currently do not

subject arbitration decisions of statutory claims to sufficient

review. In some instances, courts are essentially precluded from

reviewing awards because of the absence, as noted above, of

written opinions. Indeed, in THE ARBITRATOR’S MANUAL

(1996), issued by the Securities Industry Conference on

Arbitration, arbitrators are instructed that they need neither

strictly follow decisional law nor issue written opinions. Even

when courts are able to review awards, their application of the

general standard of review for arbitration awards, “manifest

disregard of the law,” First Options of Chicago v. Kaplan, 514

U.S. 938, 942 (1995), fails to ensure that arbitrators give due

regard to statutory requirements. Typical is the Eleventh

Circuit’s recent decision in Montes v. Shearson Lehman

Brothers, Inc., 128 F.3d 1456, 1461 (11th Cir. 1997), hoiding

that reversal of an award for manifest disregard of the law

requires proof that the arbitrator was “conscious of the law and

deliberately ignore[d] it.” Moreover, not all Circuits allow

even this paltry standard of merits review. Mcliroy v.

Painewebber Inc., 989 F.2d 817, 820 n.2 (Sth Cir. 1993)

(declining to recognize “manifest disregard” standard).

A more appropriate approach to review has been

adopted by the D.C. Circuit. While noting that courts ordinarily

defer to arbitrator's awards, Cole held that the manifest

disregard standard is somewhat elastic and “must be defined in

light of the bases underlying the Court’s decisions in Gilmer-

type cases.” 105 F.3d at 1487. The court explained:

The nearly unlimited deference paid to arbitra-

tion awards in the context of collective bargain-

ing is not required, and not appropriate, in the

context of employees’ statutory claims. In this

context, the Supreme Court has assumed that

® See also Kiernan v. Piper Jaffray Cos., Inc., 137 F.3d 588, 594 (8th

Cir. 1998) (applying deferential “manifest disregard” standard to civil

rights case); DiRussa v. Dean Witter Reynolds Inc., 121 F.3d 818, 821 (2d

Cir. 1997), cert. denied, 118 S. Ct. 695 (1998) (applying deferential

standard to reverse an award in favor of plaintiff that awarded no

attorneys’ fees to him as a prevailing party), Chisolm v. Kidder, Peabody

Asset Mgt., Inc., 966 F. Supp. 218, 224-29 (S.D.N.Y. 1997) (rejecting

argument for heightened scrutiny in civil rights cases).

Id. at 1468-69. Thus, “there will be some cases in which novel

or difficult legal issues are presented demanding judicial

judgment. In such cases, the courts are empowered to review

an arbitrator’s award to ensure that its resolution of public law

issues is correct.” Jd. at 1487. However, even Cole failed to

recognize the need for factual findings to ensure that the law

was properly applied to the facts, let alone the need for review

of plainly erroneous findings.

CONCLUSION

For the foregoing reasons, we respectfully request that

the judgment of the United States Court of Appeals for the

Fourth Circuit be reversed.

Dated: May 7, 1998

Barbara R. Arnwine Thomas R. Meites

Thomas J. Henderson Paul W. Mollica*

Richard T. Seymour Meites, Frackman, Mulder

Teresa A. Ferrante & Burger

Gia B. Lee 208 South LaSalle Street

” Committee for Suite 1410

Civil Rights Under Law Chicago, Illinois 60604

1450 G Street NW (312) 263-0272

Suite 400

Washington, DC 20005 *Counsel of Record

(202) 662-8600

Cathy Ventrell-Monsees

Sally Dunaway

nn ay

Retired Persons

Roundetica Litiesti

601 E Street N.W.

Washington, D.C. 20049

(202) 434-2060

Attorneys for Amici Curiae

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