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

EITED

nm 29 1998

‘ No. 97-889 MSY cee TE

IN THE eos

Supreme Court Of The United States

OCTOBER TERM, 1997

CEASAR WRIGHT.

Petitioner.

UNIVERSAL MARITIME SERVICE CORP.., ef. al

Respondents

On Writ of Certiorari to the United States

Court of Appeals for the Fourth Circuit

BRIEF AMICUS CURIAE OF

NATIONAL ASSOCIATION OF MANUFACTURERS

IN SUPPORT OF RESPONDENTS

JAN S. AMUNDSON CLIFFORD M. SLOAN

General Counsel Counsel of Record

QUENTIN RIEGEL DAVID S. FORTNEY

Deputy General Counsel SAMUEL D. WALKER

NATIONAL ASSOCIATION OF N. CHRISTOPHER HARDEI

MANUFACTURERS WILEY, REIN & FIELDING

3 7 1331 Pennsylvania Ave.,N.W. 1776 K Street, N.W.

Washington, D.C. 20004-1790 Washington, D.C. 20006

(202) 637-3000 (202) 429-7000

Counsel for Amicus Curiae

June 29, 1998

BEST AVAILABLE COPY

TABLE OF CONTENTS

INTRODUCTION AND SUMMARY OF

ARGUMENT

ARGUMENT

I. ARBITRATION IS A WELL-

ESTABLISHED, VITAL ASPECT OF A

BROAD RANGE OF LEGAL

RELATIONSHIPS

A. This Court Has Emphasized The

Broad Federal Policy Favoring

Arbitration

l. This Court Repeatedly Has

Embraced Arbitration

The Broad Federal Policy

Favoring Arbitration

Includes Resolution Of

Claims Founded on

Statutory Rights

The Broad Federal Policy

In Favor Of Arbitration

Includes Arbitration In The

Collective Bargaining

I cinder

B. Arbitration Provisions Play A

Critical Role In Labor Relations........

Il. ARBITRATION PROVISIONS IN

COLLECTIVE BARGAINING

AGREEMENTS SHOULD BE

AEE SE a

A. The Capacity of Arbitrators and

the Arbitration Process Is Not A

Valid Reason To Deny

Enforcement Of An Arbitration

RSA GR A a

B. The Nature Of The Collective

Bargaining Process Provides A

Strong Basis For Enforcement Of

Arbitration Provisions.................0000.

xd This Court’s Decision In Gardner-

Denver Does Not Preclude

REI I Sa

CONCLUSION

13

14

19

23

ee

ill

TABLE OF AUTHORITIES

Cases Page

Abood v. Detroit Board of Education, 431 U.S. 209

Ee ee a ee cee ne ee ee 16

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

AR ree Te Sea wea EE ae tr ae 3, 11,20

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202

ES eS ee 14

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

EE ee eC Ce 20

Bercovitch v. Baldwin School, Inc., 133 F.3d 141

RE eee ee 12

Bolden v. Southeastern Pennsylvania Transportation

Authority, 953 F.2d 807 (3d Cir. 1991), cert.

denied, 504 U.S. 543 (1992)........ccccccceccescesesesesenes 15

Boys Markets, Inc. v. Retail Clerks Union, Local

ee ek EE re 15

Brown v. Pro Football, Inc., 518 U.S. 231 (1996) ... 2

Chicago Teachers Union v. Hudson, 475 U.S. 292

Clayton v. International Union, United Automobile,

Aerospace and Agricultural Implement Workers

of America, 451 U.S. 679 (1981) .....cccccccccccceceeeeeneee 17-18

Crawford-El v. Britton, 118 S. Ct. 1584 (1998)........ 20

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

tienen che tae aceite 5

DelCostello v. International Brotherhood of

Teamsters, 462 U.S. 151 (1983) ...ccccccccccccecsccseceeeee 18

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S.

ee ee a eT passim

Livadas v. Aubry, 510 U.S. 1083 (1994)...0....0cccc.. 2

iv

TABLE OF AUTHORITIES — Continued

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

CUD winitaricbiiatiniasietuisitiisteaiiaadiaiciaiaia ak aati. 20

MeWilliams v. Logicon, Inc., No. 97-3190, 1998 U.S.

App. LEXIS 8445 (10th Cir. May 1, 1998) ........... 6, 12

Miller v. Public Storage Management, Inc., 121

ee 12

Mitsubishi Motors Corp. v. Soler Chrysler-

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

Moses H. Cone Memorial Hospital v. Mercury

Construction Corp., 460 U.S. 1 (1983) .o...ccccccccceee. 3,6

National Posters, Inc. v. NLRB, 494 U.S. 1026

GP icesecinnntinsiviinins pecccenneapidhsitubinediineataiummnationtdninens 2

Republic Steel Corp. v. Maddox, 379 U.S. 650

Sea vcrenesstininiscatdeticitaaaneniageiinialdiaibiliala in ainsi tin 18

Rodriguez de Quijas v. Shearson/American Express,

ow ER ee ee passim

Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974)... 5

Shearson/American Express Inc. v. McMahon, 482

is AE bcinticiinteeeammmininnnimins. passim

Textile Workers Union of America v. Lincoln Mills

of Alabama, 353 U.S. 448 (1957) ....ccccccccccccceeeseeeeee 6, 18

United Paperworkers International Union, AFL-

CIO v. Misco, Inc., 484 U.S. 29 (1987) .o...ccccccccceees 6, 21

United States v. Stanley, 483 U.S. 669 (1987)............ 20

United Steelworkers of America v. Enterprise Wheel

& Car Corp., 363 U.S. 593 (1960) .o....cccccccccceeeeee. 9,17

United Steelworkers of America v. Warrior & Gulf

Navigation Co., 363 U.S. 574 (1960) ......cccccccccceeeee passim

Wilko v. Swan, 346 U.S. 427 (1953) .o.cccccccccccccceseeeeees 5

Willmar Electric Service, Inc. v. NLRB, 507 U.S. 909

v

TABLE OF AUTHORITIES -— Continued

Statutes

eS Ee ee OO Rae TE 4

8) Ea a ee 21

| RESET R e- 18

Public Law No. 101-336, 104 Stat. 327 (1990)......... 12

Miscellaneous

a etiam The smart

Arbitration Association Implements the Smart

Solution, A New Three Step Dispute Resolution

Program to Resolve Disputes With Its Employees

(visited June 25, 1998) <http://www.adr.org/press/

EES a ee 9

Mark Berger, Can Employment Law Arbitration

Work?, 61 U. Mo. L. Rev. 693 (1993) 00.00.0000. 10

The Bureau of National Affairs, Basic Patterns in

Union Contracts (13th ed. 1992) ..........ccccccccceeeeeeees 9

Department of Labor and Department of Commerce,

Commission on the Future of Worker-Management

Relations, Report and Recommendations (Dec.

aaa ncocesicaseirt ciaeatvenieitainteiiaetinieinlnieaasianatrinaaadntn 10

Frank Elkouri & Edna Asper Elkouri, How

Arbitration Works (Sth ed. 1997) ...........cccccccceeeeeeeee 9,14

Robert A. Gorman, The Gilmer Decision and the

Private Arbitration of Public Law Disputes, 1995

8 FR | Ee eee 17

No. 97-889

IN THE

Supreme Court Of The United States

OCTOBER TERM, 1997

CEASAR WRIGHT,

Petitioner,

Vv.

UNIVERSAL MARITIME SERVICE CorpP., ef. al.

Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the Fourth Circuit

BRIEF AMICUS CURIAE OF

NATIONAL ASSOCIATION OF MANUFACTURERS

IN SUPPORT OF RESPONDENTS

The National Association of Manufacturers respectfuily

submits this brief as amicus curiae in support of

respondents. '

The parties have consented to the filing of this brief, Copies of the letters

of consent have been filed with the Clerk of the Court. This brief was not

authored in whole or in part by counsel for a party, and no person or entity,

other than the amicus curiae, its members, and its counsel, made a monetary

contribution to the preparation and submission of this brief.

2

INTEREST OF AMICUS CURIAE

The National Association of Manufacturers (“NAM”) is

the oldest and largest broad-based industrial trade

association in the United States. Its nearly 14,000 member

companies and subsidiaries, including 10,000 small

manufacturers, employ approximately eighty-five percent of

all manufacturing workers and produce over eighty percent

of the nation’s manufactured goods. More than 158,000

businesses are affiliated with the NAM through its

Associations Council and National Industrial Council.

The NAM and these councils are vitally interested in the

reasonable and fair enforcement of workplace laws, so as:

(1) not to impair the ability of manufacturers to compete in

the world market; (2) to ensure equal footing with other

types of employers; and (3) to secure the benefits of such

laws for employees of the NAM’s members. To this end,

the NAM has filed amicus briefs in various cases involving

workplace issues, including Brown v. Pro Football, Inc., 518

U.S. 231 (1996), Livadas v. Aubry, 510 U.S. 1083 (1994),

Willmar Electric Service, Inc. v. NLRB, 507 U.S. 909 (1993),

and National Posters, Inc. v. NLRB, 494 U.S. 1026 (1990).

American employers have a vital interest in the legal

question presented by this case — the legal standards

governing the enforceability of arbitration provisions in

collective bargaining agreements. The outcome of this case

accordingly will have a substantial impact on the NAM’s

members.

INTRODUCTION AND SUMMARY OF ARGUMENT

This Court repeatedly has recognized the strong federal

policy favoring enforcement of arbitration provisions. In its

modern decisions, the Court has established that arbitration

is something to be embraced rather than resisted; that it is an

alternative forum to court, not a derogation of rights; and

3

that it is a significant solution to problems of delay and

overcrowding in our nation’s courts. Consistent with well-

settled principles, the Court once again should hold that the

disputed arbitration provisions should be enforced. There is

no valid basis for a special rule exempting the arbitration

provisions at issue from the general principles governing

arbitration provisions.

Certain cardinal points are, by now, indisputable. It is

clear that, contrary to the judicial hostility that existed at

common law, arbitration provisions now are generally

enforceable. See, e.g, Moses H. Cone Mem'l Hosp. v.

Mercury Constr. Corp., 460 U.S. 1 (1983). It is clear that,

outside the collective bargaining context, arbitration

provisions that concern statutory rights likewise are

generally enforceable. See, e.g, Rodriguez de Quijas v.

Shearson/American Express, Inc., 490 U.S. 477 (1989). It is

clear that arbitrable statutory claims include claims asserted

under federal employment and discrimination statutes. See,

e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20

(1991). And it is clear that arbitration provisions in

collective bargaining agreements should be rigorously

enforced, at least with regard to non-statutory claims. See,

e.g., United Steelworkers of Am. v. Warrior & Gulf

Navigation Co., 363 U.S. 574 (1960).

The question in this case is whether there should be a

special exception from these principles for one category of

arbitration clauses — those found in collective bargaining

agreements, and which mandate arbitration of claims

grounded in federal statutes. Petitioner's principal

justifications — the asserted incapacity of arbitrators and

arbitration to address the kinds of claims at issue; the special

context of collective bargaining; and this Court’s decision in

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

far short of establishing an exception to the general rule of

arbitrability of disputes. Indeed, the particular issue before

4

the Court — whether an arbitration provision should be given

effect to require submission by a union member of his

workplace dispute to an agreed arbitral forum — was not even

presented in Gardner-Denver, a case in which the question

before the Court was the effect to be given an arbitration

decision.

Just as the Court in the past has repeatedly enforced

arbitration provisions in a wide variety of contexts, so too

the Court should enforce arbitration provisions in this

context.

ARGUMENT

I. ARBITRATION IS A WELL-ESTABLISHED,

VITAL ASPECT OF A BROAD RANGE OF

LEGAL RELATIONSHIPS

A. This Court Has Emphasized The Broad

Federal Policy Favoring Arbitration

As this Court repeatedly has emphasized, dispute

resolution through arbitration is a recognized and established

component of many relationships, and serves important

public policies and goals.

1. This Court Repeatedly Has Embraced

Arbitration

This Court has made clear that enforcement of arbitration

provisions should be encouraged. In doing so, it has

repeatedly had to overcome an outmoded judicial

presumption against arbitration, and, indeed, a judicial

hostility to arbitration. More than seventy years ago,

Congress enacted the Federal Arbitration Act (“FAA”), 9

U.S.C. § 1 ef seg., “to overcome an anachronistic judicial

5

hostility to agreements to arbitrate, which American courts

had borrowed from English common law.” Mitsubishi

Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S.

614, 625 n.14 (1985). The Court has emphasized that “we

are well past the time when judicial suspicion of the

desirability of arbitration and of the competence of arbitral

tribunals inhibited the development of arbitration as an

alternative means of dispute resolution.” Jd. at 626-27.’

Even since enactment of the FAA, however, this Court

has been forced repeatedly to overcome a judicial inclination

against arbitration. In Wilko v. Swan, 346 U.S. 427 (1953),

for example, the Court initially declined to enforce an

arbitration agreement regarding the Securities Act of 1933;

more recently, the Court emphasized that Wilko itself rested

on an unjustified skepticism of arbitration. “[T]he mistrust

of arbitration that formed the basis for the Wilko opinion . . .

is difficult to square with the assessment of arbitration that

has prevailed since that time.” Shearson/American Express

Inc. v. McMahon, 482 U.S. 220, 233 (1987). Indeed, the

Court ultimately overruled Wilko’s holding regarding the

non-enforcement of arbitration provisions concerning the

Securities Act, and found explicitly that “[t]he Court’s

characterization of the arbitration process in Wilko is

pervaded by what Judge Jerome Frank called the ‘old

judicial hostility to arbitration.”” Rodriguez de Quijas, 490

U.S. at 480. The Court emphasized that Wilko’s “suspicion

of arbitration as a method of weakening the protections

afforded in the substantive law” is “far out of step with our

current strong endorsement of the federal statutes favoring

this method of resolving disputes.” Jd. at 481. The Court

See also, e.g., Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 219-21 &

n.6 (1985); Scherk v. Alberto-Culver Co., 417 U.S. 506, 510 & n.4 (1974) (Act

was intended to “revers[e] centuries of judicial hostility to arbitration

agreements’’).

6

particularly castigated “the outmoded presumption of

disfavoring arbitration proceedings.” Jd.

Two federal statutes repeatedly have informed the Court’s

acceptance of arbitration in the past, and again should do so

here. The FAA establishes a broad “federal policy favoring

arbitration agreements.” Moses H. Cone Mem'l Hosp., 460

U.S. at 24.* The Labor Management Relations Act

(“LMRA”) likewise reflects a strong policy favoring

arbitration agreements. The Court has found it “clear...

that Congress [in the LMRA] adopted a policy which placed

sanctions behind agreements to arbitrate grievance disputes,

by implication rejecting the common-law rule . . . against

enforcement of executory agreements to arbitrate.” Textile

Workers Union of Am. v. Lincoln Mills of Ala., 353 U.S.

448, 456 (1957). Arbitration “is the substitute for industrial

strife,” and “arbitration of labor disputes under collective

bargaining agreements is part and parcel of the collective

bargaining process itself.” Warrior & Gulf Navigation Co.,

363 U.S. at 578.

Together, the FAA and the LMRA establish cognate

policies strongly supporting arbitration. Indeed, this Court

has applied decisions under both statutes in explaining the

broad federal policy favoring arbitration. See, eg,

Mitsubishi Motors, 473 U.S. at 626 (invoking, in an FAA

context, the Steelworkers LMRA decisions in explaining the

“federal substantive law of arbitrability” and corresponding

“body of law”); United Paperworkers Int'l Union, AFL-CIO

v. Misco, Inc., 484 U.S. 29, 40 n.9 (1987) (“the federal

courts have often looked to the [FAA] for guidance in labor

> Numerous courts have held that the FAA applies both to employment

contracts and to collective bargaining agreements. See, e.g., McWilliams v.

Logicon, Inc., No. 97-3190, 1998 U.S. App. LEXIS 8445, at *6 (10th Cir. May

1, 1998) (citing cases). Some courts, however, have reached a contrary

conclusion. /d.

7

arbitration cases”). Taken together, Congress’s endorsement

of arbitration in these statutes and this Court’s decisions

construing the FAA and the LMRA reflect the broad federal

policy favoring enforcement of arbitration provisions.

2. The Broad Federal Policy Favoring

Arbitration Includes Resolution Of Claims

Founded On Statutory Rights

The broad federal policy favoring arbitration extends to

resolution of claims founded on statutory rights. Thus, in

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

473 U.S. 614 (1985), the Court found that an arbitration

provision should be enforced regarding Sherman Act claims;

in Shearson/American Express Inc. v. McMahon, 482 U.S.

220 (1987), the Court found that an arbitration provision

should be enforced regarding the Securities and Exchange

Act of 1934 and the Racketeer Influenced and Corrupt

Organizations Act (“RICO”); and, in Rodriguez de Quijas v.

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

Court found that an arbitration provision should be enforced

regarding the Securities Act of 1933. The Court has

emphasized that the “duty to enforce arbitration agreements

is not diminished when a party bound by an agreement raises

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

226 (emphasis added). Indeed, the Court has stated that

“[t]here is no reason to depart from these guidelines where a

party bound by an arbitration agreement raises claims

founded on statutory rights.” Mitsubishi Motors Corp., 473

U.S. at 626.

The Court similarly has applied the presumption in favor

of arbitration provisions in the context of claims regarding

employment and discrimination statutes. In Gilmer, the

Court held that the same framework which applies to

arbitration provisions concerning other statutory claims also

applies to arbitration provisions ccacerning employment and

discrimination statutes, including claims under the Age

Discrimination in Employment Act (“ADEA”). The Court

explained that “[i]t is by now clear that statutory claims may

be the subject of an arbitration agreement.” Jd. 500 U.S. at

26. The Court specifically rejected the argument that

“compulsory arbitration of [such] claims pursuant to

arbitration agreements would be inconsistent with the

statutory framework and purposes of the ADEA.” /d at 27.

3. The Broad Federal Policy In Favor Of

Arbitration Includes Arbitration In The

Collective Bargaining Context

This Court also has recognized the general policy in favor

of arbitration in the context of collective bargaining

agreements and the LMRA. The Court has emphasized, in

this context, the “congressional policy in favor of settlement

of disputes by the parties through the machinery of

arbitration.” United Steelworkers of Am. v. Warrior & Gulf

Navigation Co., 363 U.S. at 582. For this reason, the Court

has stressed a strong presumption in favor of finding

disputes to be arbitrable under a collective bargaining

agreement: “[a]n order to arbitrate the particular grievance

should not be denied unless it may be said with positive

assurance that the arbitration clause is not susceptible of an

interpretation that covers the asserted dispute. Doubts

should be resolved in favor of coverage.” Id. at 582-83

(emphasis added). Thus, just as the Court has recognized a

broad policy favoring enforcement of arbitration provisions

outside the collective bargaining context, so too the Court

has recognized a broad policy favoring enforcement of

arbitration provisions within the collective bargaining

context.

Accordingly, it is indisputable that: (1) this Court

repeatedly has overcome judicial hostility to arbitration; (2)

the broad federal policy favoring arbitration encompasses

9

statutory claims, including claims based on employment and

discrimination statutes; and (3) the broad federal policy

favoring arbitration includes arbitration in the collective

bargaining context.

B. Arbitration Provisions Play A Critical Role

In Labor Relations

Particularly in light of the clear federal policy favoring

enforcement of arbitration provisions, it is important to

emphasize that enforcement of arbitration provisions is an

essential element of labor relations.

Arbitration now plays an essential role in resolving

disputes. Arbitration provisions are common in the

workplace, both in the collective bargaining arena and in

non-collective bargaining contexts.’ Arbitration provisions

serve many salutary purposes in the workplace. They

provide a swift, inexpensive method of dispute resolution

and avoid divisive industrial strife. See Gilmer, 500 U.S. at

28; Warrior & Gulf, 363 U.S. at 582-83; United

Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363

U.S. 593, 596 (1960).

It should be emphasized that arbitration is a neutral

process, which does not favor one party or the other. See

generally Frank Elkouri & Edna Asper Elkouri, How

Arbitration Works (5th ed. 1997). For example, arbitration

does not favor employers: arbitrators are perfectly capable

* In 1997 alone, over 78,000 arbitrations were conducted under the auspices

of the American Arbitration Association. See American Arbitration Association,

The American Arbitration Association Implements the Smart Solution, A New

Three Step Dispute Resolution Program to Resolve Disputes With Its Employees

(visited June 25, 1998) <http://www.adr.org/press/smart_ solution. htm!>.

> For example, 96% of collective bargaining agreements contain arbitration

clauses covering discrimination claims. See The Bureau of National Affairs,

Basic Patterns in Union Contracts 131-32 (13th ed. 1992).

10

of ruling against employers.° Nor does it favor higth-income

workers over low-income workers. Because arrbitration

facilitates greater access to dispute resolution, sopme have

emphasized that arbitration may be particularly helpful to

lower-income workers.’

Employers, employees, unions, and others : routinely

participate in a broad range of arbitration proceediings. As

this Court’s repeated pronouncements embracing asrbitration

indicate, stereotypes of arbitrators and arbitraation are

unfounded. As this Court has emphasized, there iss no basis

for a wholesale condemnation of the process. ‘Sweeping

denunciation of the adequacy of arbitration and aarbitrators

reflects the distrust of the arbitral process that this (Court has

had to overcome in implementing the broad federral policy

favoring enforcement of arbitration provisions.

* See generally, e.g., Mark Berger, Can Employment Law Arbitrcation Work?,

61 U. Mo. L. Rev. 693, 714 (1993) (explaining that “the experiencee in the labor

arbitration arena suggests that the arbitration process is more tthan able to

produce plaintiff victories where the claims are justified”).

” A bipartisan, blue-ribbon governmental commission appoiinted by the

Secretary of Labor and Secretary of Commerce recently concluded:

[C)ourt litigation has become a less-than-ideal method of :resolving

employees’ public law claims... . [E}mployees bringing pwublic law

claims in court must endure long waiting periods as governing; agencies

and the overburdened court system struggle to find time to’ properly

investigate and hear the complaint. Moreover, the average pprofile of

as well as higher-wage professionals in the litigation systerm; lower-

wage workers are less able to afford the time required to purswe a court

complaint, and are less likely to receive large monetary retlief from

juries.

Department of Labor and Department of Commerce, Commission on the Future

of Worker-Management Relations, Report and Recommendaticons 30 (Dec.

1994).

1]

ll. ARBITRATION PROVISIONS IN

COLLECTIVE BARGAINING AGREEMENTS

SHOULD BE ENFORCED

Particularly in light of the broad federal policy favoring

arbitration, arbitration provisions in collective bargaining

agreements should be given effect, including provisions that

reach claims based on statutory rights. As explained, under

this Court’s precedents it is clear that: (1) an arbitration

provision concerning statutory claims outside the collective

bargaining context must be given effect; and (2) an

arbitration provision concerning non-statutory claims within

the collective bargaining context must be given effect. An

arbitration provision concerning statutory claims within the

collective bargaining context likewise should be given

effect.

This Court has emphasized that a party objecting to the

applicability of an arbitration agreement has the burden of

establishing the inapplicability of the arbitration provision.

“The burden is on the party opposing arbitration . . . to show

that Congress intended to preclude” the arbitral forum.

McManon, 482 U.S. at 227; see also Gilmer, 500 U.S. at 26.

That burden here rests squarely upon the petitioner. In

attempting to meet this burden, petitioner raises three

principal arguments in contending that arbitration should be

unavailable for statutory claims in the collective bargaining

arena: (1) arbitrators and the arbitration process are unsuited

for resolution of such issues; (2) the nature of collective

bargaining renders arbitration of such issues inappropriate;

and (3) this Court’s decision in Alexander v. Gardner-

Denver Co., 415 U.S. 36 (1974) purportedly precludes

arbitration of statutory claims in the collective bargaining

context. None of these contentions is meritorious. None is

sufficient, moreover, to preclude operation of two cardinal

principles established by this Court — that the mandatory

arbitration of statutory claims, including employment and

12

discrimination claims, is permissible; and that the mandatory

arbitration of claims in the collective bargaining context is

permissible.’

In considering these points, it also is important to

emphasize precisely what is at issue in this case — whether a

party whose collective bargaining agent bargained for (and

obtained) a contract clause compelling arbitration may be

held to that agreement. Although petitioner raises a wide

range of additional issues (such as the effect to be given such

an arbitration in a subsequent judicial proceeding), the only

issue before the Court is the threshold, crucially important,

straightforward question — whether a binding arbitration

provision in a collective bargaining agreement should be

enforced regarding statutory claims, as it unquestionably

would be outside the collective bargaining context, and as it

unquestionably would be within the collective bargaining

context for non-statutory claims. Just as this Court

repeatedly has rejected efforts to hobble enforcement of

arbitration provisions in other contexts, so too the Court

should reject such an effort here, and should reiterate, once

again, the broad federal policy favoring arbitration.

one beanies tan Os An coen ene See Pub.

L. No. 101-336, 104 Stat. 327 (codified at 42 U.S.C. § 12212 (1990)); see also

McWilliams v. Logicon, Inc., 1998 U.S. App. LEXIS 8445; Bercovitch v.

Baldwin School, Inc., 133 F.3d 141 (ist Cir. 1998); Miller v. Public Storage

Management, Inc., 121 F.3d 215 (Sth Cir. 1997).

13

A. The Capacity Of Arbitrators And The

Arbitration Process Is Not A Valid Reason

To Deny Enforcement Of An Arbitration

Provision

process render enforcement of an arbitration provision

inapplicable in the collective bargaining process. The short

answer to this objection is that it is precisely the kind of

objection that repeatedly has been urged in favor of judicial

hostility to arbitration provisions — and precisely the kind of

reasons for rejecting the objection in other contexts are fully

applicable here.

For example, in Mitsubishi Motors v. Soler Chrysler-

Plymouth, the Court overrode objections to arbitrating a

complex claim under the federal antitrust statutes. The

Court emphasized that “potential complexity should not

suffice to ward off arbitration.” 473 U.S. at 633. The Court

further stressed that “adaptability and access to expertise are

hallmarks of arbitration.” Jd In Shearson/American

Express Inc. v. McMahon, the Court likewise emphasized

that “a general suspicion of the desirability of arbitration and

the competence of arbitral tribunals” applies “with no greater

force to the arbitration of securities disputes than to the

arbitration of legal disputes generally.” 482 U.S. at 231.

The Court reiterated the Mitsubishi holding that “arbitral

tribunals are readily capable of handling the factual and legal

complexities of antitrust claims, notwithstanding the absence

of judicial instruction and supervision,” and that “the

streamlined procedures of arbitration do not’ entail any

consequential restriction on substantive rights.” Jd. at 232.

The Court explicitly rejected the challenge to “the

competence of arbitral tribunals.” Jd. In Gilmer, moreover,

the Court squarely rejected “a host of challenges to the

adequacy of arbitration procedures.” 500 U.S. at 30. The

14

Court emphasized that the challenges reflect “generalized

attacks on arbitration” of a type that the Court repeatedly has

rejected. Jd.’

Accordingly, the objection that the resolution of the

claims at issue is inappropriate for arbitration and arbitrators

is inadequate to preclude arbitration. This Court has rejected

such arguments repeatedly, and should do so here as well.

B. The Nature Of The Collective Bargaining

Process Provides A Strong Basis For

Enforcement Of Arbitration Provisions

Petitioner contends that the nature of the collective

bargaining process itself provides a basis for refusing to

enforce an arbitration provision in a collective bargaining

agreement. In fact, just the opposite is true. It is

indisputable that a _ collective bargaining agreement

appropriately may include provisions for the arbitration of

non-statutory claims. Nothing about the collective

bargaining context supports a categorical rule precluding

arbitration of statutory claims. Here, as elsewhere, the party

asserting preclusion has the burden of establishing

preclusion, and may do so only by establishing a

congressional intent in the pertinent statute. See Gilmer, 500

U.S. at 26. Petitioner cannot meet this burden.

This Court repeatedly has emphasized the propriety and

enforcement of arbitration provisions in collective

bargaining agreements. See, e.g, Allis-Chalmers Corp. v.

Lueck, 471 U.S. 202, 219 (1985) (emphasizing “the central

role of arbitration in the collective bargaining context”);

Warrior & Gulf Navigation Co. 363 US. at 578

* Indeed, the expertise and experience of arbitrators is one of the noted

benefits of the arbitral process. See generally Frank Elkouri & Edna Asper

Elkouri, How Arbitration Works 198-201 (Sth ed. 1997).

15

(“arbitration of labor disputes under collective bargaining

agreements is part and parcel of the collective bargaining

process itself”); id at 581 (“[a)part from matters that the

parties specifically exclude, all of the questions on which the

parties disagree must . . . come within the scope of the

grievance and arbitration provisions of the collective

agreement”); Boys Markets, Inc. v. Retail Clerks Union,

Local 770, 398 U.S. 235, 252 (1970) (noting “the

importance that Congress has attached” to arbitration, and

the “central” role of arbitration in “the administration of

collective bargaining agreements”) (internal citations

omitted). Petitioner contends, nevertheless, that the central

and positive role arbitration plays in the collective

bargaining context is inapplicable when statutory claims are

at issue. As with other objections that have been raised to

arbitration provisions in various contexts, however, this

objection is untenable.

Most fundamentally, the objection is based on a

misconception. An arbitration provision involves a

designation of forum, not a surrender of a claim. As this

Court has emphasized, “[b]y agreeing to arbitrate a statutory

claim, a party does not forego the substantive rights afforded

by the statute.” Gilmer, 500 U.S. at 26 (citing Mitsubishi

Motors Corp., 473 U.S. at 628). Again and again, the Court

has rejected this argument: “the streamlined procedures of

arbitration do not entail any consequential restriction on

substantive rights.” McMahon, 482 U.S. at 232.

Indeed, it is well-established that unions may make

binding agreements with regard to a broad range of

important legal rights. For example, it has been held that a

public employees’ union permissibly may agree, as the agent

for its members, that the members will submit to drug tests,

notwithstanding possible Fourth Amendment objections.

See, e.g., Bolden v. Southeastern Penn. Transp. Auth., 953

F.2d 807, 827 (3d Cir. 1991), cert. denied, 504 U.S. 543

16

(1992). Moreover, this Court has held that the legislative

assessment of the value of the “union shop” — in which the

union may act for employees as a whole, even if individual

employees object — is so important that it justifies any

resulting impingement on the constitutional right to freedom

of association. See Chicago Teachers Union v. Hudson, 475

U.S. 292, 302-03 (1986); Abood v. Detroit Bd. of Educ., 431

U.S. 209, 222 (1977).

Petitioner’s objection would cause a bizarre bifurcation in

the procedures available for enforcing employees’ statutory

rights, depending on whether the employee were subject to a

collective bargaining agreement. Consider two en*ployees

with identical age discrimination claims. Under petitioner’s

approach, a non-union employee subject to a binding

arbitration provision would be bound to arbitrate (per

Gilmer), while a union employee subject to a binding

arbitration provision would not. In other contexts, this Court

has emphasized that interpretations of principles governing

arbitration provisions should not lead to such anomalous and

inconsistent results. See, e.g., Rodriguez de Quijas, 490 U.S.

at 485 (inconsistent result with regard to the enforceability

of an arbitration provision “makes little sense for similar

claims, based on similar facts”). No such inconsistency

should be created here. Indeed, it would be especially

inappropriate to permit such inconsistency where the

existence of a collective bargaining agreement would render

an arbitration provision Jess enforceable — in light of the

established, central role for arbitration provisions in

collective bargaining agreements. It is especially difficult to

imagine that Congress and this Court would intend that, as

between the two hypothetical workers described above, the

contract formed as a result of collective bargaining would be

avoidable by the worker, while the contract formed by the

individual employee would not.

17

This Court also has emphasized the broad federal policy

favoring arbitration in the collective bargaining context

itself, and distinguished precedent evoking judicial hostility

to arbitration (which the Court subsequently overruled). See

Warrior & Gulf Navigation Co., 363 U.S. at 578

(distinguishing Wilko, which was later overruled by

Rodriguez, and finding that Wilko’s skepticism of arbitration

should not preclude broad federal policy favoring arbitration

in collective bargaining context). It is precisely in the

collective bargaining context where Congress and the Court

have repeatedly emphasized that the worker has the greatest

bargaining strength. See, e.g, Warrior & Gulf, 363 U.S. at

582-83; Enterprise Wheel & Car Co., 363 U.S. at 597.

Accordingly, contracts forged in this milieu should be the

most strictly enforced.

Equally without merit is petitioner’s contention that the

general rule of arbitrability is inapplicable because of the

possibility that a union will decline to proceed with a

grievance or a request for arbitration. This argument for a

special rule is unavailing for several reasons.

First, based on the possibility that a union will not pursue

arbitration, petitioner seeks to have the exception drive the

rule, ignoring the important benefits arbitration provides, as

recognized by settled federal policy and this Court's

precedents. The argument ignores the fact that unions

repeatedly handle such claims, and there is no evidence to

support the view that unions do not pursue such claims

vigorously."°

'° See, e.g. Robert A. Gorman, The Gilmer Decision and the Private

Arbitration of Public Law Disputes, 1995 U. Ill. L. Rev. 635, 675 n.128 (1995)

(noting the lack of empirical support for a distinction between Gilmer and

Gardner-Denver that turns on the idea that unions will not ardently represent

their members). Not only does the evidence fail to support the contention that

unions will be less than zealous, unions have a strong interest in negotiating

favorable arbitration agreements and pursuing meritorious claims. See Clayton

(Continued...)

18

Second, even where a union does not go forward, an

individual employee has recourse to the arbitration process

or to judicial oversight. If a union declines to pursue a

grievance and compel arbitration, the employee will have

one of two options: depending on the collective bargaining

agreement, either (1) the employee has the option of

proceeding with the grievance or arbitration individually, see

29 U.S.C. § 159(a), in which case the employer can resolve

the dispute with the employee without union participation;

or (2) the union will have exclusive authority to pursue a

grievance or demand arbitration, in which case the individual

can proceed to court if the union’s refusal to go forward is

wrongful. See Republic Steel Corp. v. Maddox, 379 U.S.

650, 657-59 (1965); DelCostello v. International Bhd. of

Teamsters, 462 U.S. 151, 163-65 (1983). Courts are

uniquely capable of developing standards for wrongfulness

in this context based on their federal common law authority

under the LMRA. See Lincoln Mills, 353 U.S. at 456.

The Court need not reach those standards because they

are not presented in this case. There has been no showing

that the union refused petitioner’s request to go forward with

the grievance and arbitration process. Instead, there is only

evidence that petitioner and his union discussed his case and

that the union suggested that he file suit in court. Pet. App.

3a-4a. Both the petitioner and the union failed to pursue the

grievance and arbitration process. To the extent that there is

a suggestion of confusion about the governing law because

the Fourth Circuit’s Austin decision had not yet issued (Pet.

Br. at 3-4), this suggested confusion — and resulting

(...Continued)

v. International Union United Auto., Aerospace and Agric. Implement Workers

of Am., 451 U.S. 679, 686 n.11 (1981) (noting that the conscientious handling of

grievances enhances the union’s prestige with employees and strengthens its

Stature as the exclusive bargaining representative).

19

idiosyncratic facts — cannot justify a sweeping rule holding

all such arbitration provisions unenforceable. Assuming

arguendo that petitioner was confused, this confusion was

caused by an asserted clarification in the governing law, not

by any unfairness in the arbitration process. It should not be

allowed to distort the issue, and should not lead to an

adoption of principles inconsistent with the strong federal

policy favoring arbitration, as established in statute and this

Court’s precedents.

Accordingly, petitioner’s contention that the nature of the

collective bargaining relationship precludes enforcement of

an arbitration provision regarding statutory claims is

unavailing. Just as arbitration of non-statutory claims serves

valuable purposes in the collective bargaining context, and

just as arbitration of statutory claims serves valuable

purposes outside the collective bargaining context, so too

arbitration of statutory claims in the collective bargaining

context serves valuable purposes. And, just as enforcement

of arbitration provisions in other contexts is required by

federal policy and this Court’s holdings implementing that

policy, so too is enforcement of arbitration provisions

required in this context.

Cc. This Court’s Decision In Gardner-Denver

Does Not Preclude Arbitration

Finally, petitioner contends that this Court’s decision in

Gardner-Denver compels a different rule for arbitration of

statutory claims in collective bargaining agreements than the

rule that governs (1) arbitration of statutory claims outside

the collective bargaining context and (2) arbitration of non-

statutory claims in the collective bargaining context.

Petitioner’s request for a special rule is untenable.

The short, and sufficient, answer to petitioner’s argument

is that Gardner-Denver did not involve the question at issue

20

here. Instead, Gardner-Denver involved an individual who

had pursued a contractual claim through the arbitration

process; the question was the effect to be given to the

arbitration decision, and whether it barred subsequent

judicial review of a statutory claim. See Gardner-Denver,

415 U.S. at 43. Similarly, both McDonald v. City of West

Branch, 466 U.S. 284 (1984) and Barrentine v. Arkansas-

Best Freight System, Inc., 450 U.S. 728 (1981) — upon which

petitioner also seeks to rely — involve the effect to be given

to arbitration decisions, not a failure to undergo arbitration

entirely. As a result, “those cases did not involve the issue

of the enforceability of an agreement to arbitrate statutory

claims. Rather, they involved the quite different issue

whether arbitration of contract-based claims precluded

judicial resolution of statutory claims.” Gilmer, 500 U.S. at

35 (emphasis added). Thus, any claim that the holding in

Gardner-Denver precludes enforcement of the arbitration

provision is erroneous. See, e.g., United States v. Stanley,

483 U.S. 669, 680 (1987) (“no holding can be broader than

the facts before the court”); Crawford-El v. Britton, 118 S.

Ct. 1584, 1592 (1998).

To the extent that Gardner-Denver includes more general

dicta about the nature of arbitration and enforcement of

statutory rights, these comments, now nearly a quarter

century old, must be considered in their historical context

and in light of the Court’s more contemporary decisions.

This Court repeatedly has rejected the outmoded skepticism

of arbitration, and has emphasized the broad federal policy

favoring arbitration. Indeed, in Gilmer itself, this Court

specifically disavowed | Gardner-Denver’s general

skepticism of the arbitration process. See Gilmer, 500 U.S.

at 34.n.5. Accordingly, petitioner’s argument that the Fourth

Circuit’s judgment cannot be affirmed consistent with

Gardner-Denver’s holding is unavailing.

21

Moreover, the Court should reject the request of

petitioner’s amici for the Court to create a code-like “rule

book” addressing when disputes will or will not be

arbitrable. The facts of this case illustrate, as well as any,

the rich diversity of situations in which parties can bargain

for various kinds of dispute resolution (here, a three-step

grievance process ending in arbitration). What the Court can

and should do is to enforce agreements to arbitrate

workplace claims, whether the employees are covered by a

collective bargaining agreement or not. The various ways

that an individual’s statutory claim might or might not be

pursued in the collective bargaining context can be handled

by existing law, to be interpreted and developed by the lower

courts. Both the FAA and the LMRA provide standards by

which courts can stay cases pending arbitration or dismiss

cases without prejudice to allow arbitration to proceed.'’ In

either instance, court intervention is possible in the event

that the arbitration process fails.

The judgment below is consistent with the objective of

providing parties — whether covered by a collective

bargaining agreement or not — with an arbitration forum in

which to resolve their disputes. The magistrate judge

dismissed petitioner’s complaint without prejudice and

carefully avoided addressing the merits of his claim, stating

simply that “[t]he arbitration agreement should be enforced

{and that] [t]he question of whether arbitration may now be

available or the result thereof is not before the court.” Pet.

App. 26a. The district court similarly granted summary

judgment for the defense but dismissed without prejudice.

Pet. App. 18. The district court would have entertained

"See 9 U.S.C. § 3; United Paperworkers Int'l Union, AFL-CIO v. Misco,

Inc., 484 U.S. 29, 40 n.9 (1987) (noting that the federal courts look to the

standards of the FAA in developing federal common law under § 301 of the

LMRA).

22

evidence by petitioner that the union had “handled his

grievance perfunctorily or in bad faith, [or] . . . that a union

breach of duty contributed to an erroneous outcome in the

contractual grievance proceedings.” Jd. Petitioner failed to

present that evidence. Accordingly, the Fourth Circuit

affirmed while noting that no arbitration had yet addressed

the merits or arbitrability of petitioner’s claims Pet. App. 5a.

Thus the decision simply stands for enforcement of the

arbitration provision and the arbitral regime; other issues

were not presented or addressed for the fundamental reason

that no arbitration had occurred.

In sum, contrary to petitioner’s extensive protestations,

Gardner-Denver does not support a categorical rule

prohibiting the enforcement of arbitration provisions in the

collective bargaining context with regard to statutory claims.

Nor do the principles governing arbitration both within and

outside the collective bargaining context — which establish a

broad federal policy favoring arbitration and which include

statutory claims outside the collective bargaining context —

support such a rule. Indeed, to the extent that Gardner-

Denver is given such a reading, it is “far out of step with

{the Court’s] current strong endorsement of the federal

statutes favoring this method of resolving disputes.”

Rodriguez de Quijas, 490 U.S. at 480. Gardner-Denver

cannot furnish the justification for petitioner’s special rule of

inarbitrability; as with other such provisions, arbitration

provisions in collective bargaining agreements providing for

arbitration of statutory claims should be given effect.

23

‘CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted,

JAN S. AMUNDSON

General Counsel

QUENTIN RIEGEL

Deputy General Counsel

NATIONAL ASSOCIATION OF

MANUFACTURERS

1331 Pennsylvania Ave., N.W.

Washington, D.C. 20004-1790

(202) 637-3000

June 29, 1998

CLIFFORD M. SLOAN

Counsel of Record

DAVID S. FORTNEY

SAMUEL D. WALKER

N. CHRISTOPHER HARDEE

WILEY, REIN & FIELDING

1776 K Street, N.W.

Washington, D.C. 20006

(202) 429-7000

Counsel for Amicus Curiae