Amicus Curiae Brief — Circuit City Stores, Inc. v. Adams

ee 8

No. 99-1379 EP 19 2000

In the Supreme Court of the United States

CIRCUIT CITY STORES, INC., PETITIONER

D.

SAINT CLAIR ADAMS

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING RESPONDENT

SETH P. WAXMAN

Solicitor General

Counsel of Record

BARBARA D. UNDERWOOD

= 2 SOLANO Deputy Solicitor General

olicitor

Department of Labor — > 7 — licit

Washington, D.C. 20210 — ; 9

C. GREGORY STEWART Department of Justice

General Counsel Washington, D.C. 20530-0001

PHILIP B. SKLOVER (202) 514-2217

Associate General Counsel

VINCENTJ. BLACKWOOD

Associate General Counsel

ROBERT J. GREGORY

Senior Attorney

Equal Employment

Opportunity Commission

Washington, D.C. 20507

QUESTION PRESENTED

Whether the Federal Arbitration Act applies to contracts

of employment.

TABLE OF CONTENTS

Interest of the United States

Statement

Summary of argument

Argument:

I. Because “engaged in * * * commerce” in the

Section 1 exclusion and “involving commerce” |

in the Section 2 coverage provision were

understood in 1925 as coextensive, the ordinary

meaning f the Section 1 phrase excludes from

the FAA all employment contracts that could

come within the FAA under Section 2

A. In 1925 when the FAA was enacted, the

terms “involving commerce” and “engaged

in commerce” were coextensive

B. This court’s cases establish that Congress

used both “involving commerce” and

engaged in * * commerce” to reach

to the full extent of its Commerce Clause

power as then understood

C. The record of the proceedings before Con-

gress establishes that Congress understood

the terms “involving commerce” and

“engaged in * * * commerce” to be co-

extensive

II. There is no reason not to construe the terms in

the Section 1 exclusion in accord with their

ordinary meaning

Conclusion

Appendix

(IIT)

|

19

7 $8

—

IV

TABLE OF AUTHORITIES

Cases: Page

A.L.A. Schechter Poultry Corp. v. United States,

295 U.S. 495 (1935) 16

Allied-Bruce Terminix Cos. v. Dobson, 513 US.

265 (1995) 9, 10

Buck v. Kuykendall, 267 U.S. 307 (1925) 29

Craft v. Campbell Soup Co., 177 F.3d 1083

(9th Cir. 1999) 3, 6,7

FTC v. Bunte Bros., 312 U.S. 349 (1941) 16, 18

Garcia v. United States, 469 U.S. 70 (1984) 26

Gatliff Coal Co. v. Cox, 142 F.2d 876 (6th Cir.

1944) 18

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

20 (1991) 6

Gooch v. United States, 297 U.S. 124 (1936) 25, 28

Gulf Oil Corp. v. Copp Paving Co., 419 US. 186

(1974) . 16, 17, 18, 24, 25

Gustafson v. Alloyd Co., 513 U.S. 561 (1995 27

Hammer v. Dagenhart, 247 U.S. 251 (1918) 14

Harrison v. PPG Indus., Inc., 446 U.S. 578

(1980) 26

Helvering v. Stockholms Enskilda Bank, 293 US.

84 (1934) 28

Howard v. Illinois Cent. R. R., 207 U.S. 463

(1908) 11,14

Hughey v. United States, 495 U.S. 411 (1990 27

Illinois Cent. R.R. v. Behrens, 233 U.S. 473

(1914) 12, 13

Jarecki v. G. D. Searle & Co., 367 U.S. 303 (1961) 27

McLeod v. Threlkeld, 319 U.S. 491 (1943) 15, 16

Mitchell v. Lublin, McGaughy & Assoc., 358 US.

207 (1959) 24

Mondou v. New York, New Haven & Hartford R.R.,

223 U.S. 1 (1912)

Cases—Continued: Page

Moses H. Cone Mem ! Hosp. v. Mercury Constr.

Corp., 469 U.S. 1 (1983) 23

New York Gaslight Club, Inc. v. Carey, 447 US.

54 (1980) 2

NLRB v. Jones & Laughlin Steel Corp., 301 US.

1 (1937) 16

Norfolk & W. Ry. v. American Train Dispatchers’

Ass'n, 499 U.S. 117 (1991) 28

Norfolk & W. Ry. v. Earnest, 229 U.S. 114 (1913)......... * 12

Pedersen v. Delaware, Lackawanna & W. R. R.,

229 US. 146 (1913) 12

Perrin v. United States, 444 U.S. 37 (1979) 7

Prima Paint Corp. v. Flood & Conklin Mfg., 338

U.S. 395 (1967) 19, 28

Russell v. United States, 471 U.S. 858 (1985) q 15

Russell Motor Car Co. v. United States, 261 U.S.

514 (1923) 25

Shanks v. Delaware, Lackawanna & W. R.R.,

239 U.S. 556 (1916) 13

Smallwood v. Jeter, 244 P. 149 (Idaho 1926) 8

Southland Corp. v. Keating, 465 U.S. 1 (1984) 29

Southern Pac. Co. v. Industrial Accident Comm n,

251 U.S. 259 (1920) 14

St. Louis, San Francisco & Tex. Ry. v. Seale, 229

U.S. 156 (1913) 12

Stafford v. Wallace, 258 U.S. 495 (1922) 14

Tenney Eng Inc. v. United Elec. Workers,

207 F 2d 450 (3d Cir. 1953) 18, 28

Third Nat'l Bank v. Impac Ltd., Inc., 432 US.

312 (1977) 27

United Paperworkers Intl Union v. Misco, Inc.,

484 U.S. 29 (1987) 26

United States v. American Bldg. Maint. Indus.,

422 US. 271 (1975) 16, 17, 18

United States v. Darby, 312 U.S. 100 (1941) 16

United States v. Powell, 423 U.S. 87 (1975) 25, 28

VI VII

United States v. Robertson, 514 U.S. 669 (1995) = 24 Black’s Law

Volt Info. Sciences, Inc. v. Leland Standford Jr. 2d ed. 1910

Univ., 489 U.S. 468 (1989) 19 3d ed. 1933

Wright v. Universal Mar. Serv. Corp., 525 U.S. 70 1 Bouvier’s Law Dictionary (3d rev. 1914)

(1998) 23 R.A. Epstein, Fidelity Without Translation, 1 Green

3 Bag 2d 21 (1977

Constitution and statutes: M.W. Finkin, “Workers’ Contracts” Under the

U.S. Const. Art. I, § 8, Cl. 3 (Commerce Clause) .......... passim United States Arbitration Act: An Essay In

Act of June 11, 1906, ch. 3073, 34 Stat. 232 10 Historical Clarification, 17 Berkeley J. Emp. &

Act of Apr. 22, 1908, ch. 149, 35 Stat. 65 11 on 282 (1996)

Act of Feb. 12, 1925, ch. 213, 43 Stat. 883 2,6 “17 — ——

Act of July 30, 1947, ch. 392, § 2, 61 Stat. 670 17 HR Ran Ne. 285 — 6 —

Civil Rights Act of 1991, Pub. I. No. 102-166, ee ee ae 449

§ 118, 105 Stat. 1081 23 Pt. 1 (1991) ee N

Clayton Act § 7, 15 U.S.C. 18 16, 17 Pt. 2 (1991)

Clean Air Act § 307 ), 42 U.S.C. 7807) oo. 26 LR. Macneil, American Arbitration Law (1992)

Federal Arbitration Act, 9 U.S.C. I et seg 1 Sales and Contracts to Sell in Interstate and Foreign

9 USC.1 passim Commerce, and Federal Commercial Arbitration:

9 US.C.2 passim Hearing on S. 4213 and S. 4214 Before a Subcomm.

Federal Employers’ Liability Act, 45 U.S.C. 51 11 of the Senate Comm. on the Judiciary, 67th Cong.

15 U.S.C. 77b(10) 27 4th Sess. (1923)

29 U.S.C. 216 (1994 & Supp. IV 1998) 1 Webster's Third New Int'l Dictionary (1976)

29 U.S.C. 660(c) 1 Webster’s New Int'l Dictionary of the English

29 U.S.C. 793-794 (1994 & Supp. IV 1998) 1 Language (1917)

29 U.S.C. 2617 (1994 & Supp. IV 1998) 1

29 U.S.C. 2938 (Supp. IV 1998) 1

30 U.S.C. 815(c) 1

38 U.S.C. 4211-4212 (1994 & Supp. IV 1998) 1

42 U.S.C. 2000d et seq. 1

42 U.S.C. 12212 23

Miscellaneous:

Arbitration of Interstate Commercial Disputes: Joint

Hearings on S. 1005 and H.R. 646 Before the

Subcomms. of the Comms. on the Judiciary, 68th

Cong., Ist Sess. (1924) 22

In the Supreme Court of the Anited States

No. 99-1379

CIRCUIT CITY STORES, INC., PETITIONER

Vv.

SAINT CLAIR ADAMS

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING RESPONDENT

INTEREST OF THE UNITED STATES

This case concerns the proper interpretation of the Fed-

eral Arbitration Act (FAA), 9 U.S.C. 1 et seg., as applied to a

pre-dispute employment contract. Although this case in-

volves claims of discrimination under state law, the United

States has a significant interest in its outcome. The scope of

the exclusion in Section 1 of the FAA for employment con-

tracts may affect the enforcement of arbitration agreements

covering claims of employment discrimination under federal

civil rights statutes. Similarly, this Court’s ruling may affect

employment discrimination claims brought by the Secretary

of Labor against federal contractors, see 29 U.S.C. 793-794

(1994 & Supp. IV 1998); 38 U.S.C. 4211-4212 (1994 & Supp.

IV 1998), and financial aid recipients, 42 U.S.C. 2000d et seq.;

29 U.S.C. 2938 (Supp. IV 1998). In addition, this case may

affect enforcement of anti-retaliation provisions in federal

statutes designed to protect employees who report public

health and safety violations, as well as enforcement of vari-

ous federal labor standards. See, e.g., 30 U.S.C. 815(c); 29

U.S.C. 660(c); 29 U.S.C. 216 (1994 & Supp. IV 1998); 29

U.S.C. 2617 (1994 & Supp. IV 1998). Finally, state anti-

(1)

2

discrimination laws play an integral role in the “scheme of

interrelated and complementary state and federal enforce-

ment” under federal anti-discrimination statutes. New York

Gaslight Club, Inc. v. Carey, 447 U.S. 54, 65 (1980). The

United States therefore has an interest in the ability of the

States to establish procedures for resolving employment-

related claims arising under state law.

STATEMENT

1. The Federal Arbitration Act was enacted into law in

1925. Act of Feb. 12, 1925, ch. 213, 43 Stat. 883. Its basic

coverage provision provides that it applies to “[a] written

provision in any maritime transaction or a contract evidenc-

ing a transaction involving commerce to settle by arbitration

a controversy thereafter arising out of such contract or

transaction.” 9 U.S.C. 2. The FAA provides that such

provisions in covered contracts “shall be valid, irrevocable,

and enforceable, save upon such grounds as exist at law or in

equity for the revocation of any contract.” Ibid. In the

exclusion at issue in this case, however, the statute provides

that it does not apply to “contracts of employment of sea-

men, railroad employees, or any other class of workers

engaged in foreign or interstate commerce.” 9 U.S.C. 1.

2: Respondent Saint Clair Adams applied for a position

with petitioner Circuit City Stores, Inc., in October 1995.

J.A. 12-17. Prospective applicants for employment with peti-

tioner must sign a “Circuit City Dispute Resolution Agree-

ment.” Ibid. That form requires that employees submit all

claims and disputes to mutually binding arbitration. J.A. 54;

see J.A. 12. The terms of the form specify that it includes

“all previously unasserted claims, disputes or controversies

arising out of or relating to [the] application or candidacy for

employment, employment and/or cessation of employment

with Circuit City, * * ineludling! claims under federal,

state, and local statutory or common law, such as the Age

Discrimination in Employment Act, Title VII of the Civil

E

3

Rights Act of 1964, as amended, including the amendments

of the Civil Rights Act of 1991, the Americans with

Disabilities Act, the law of contract and law of tort.” J.A. 13.

Respondent signed the form and was hired to work for

petitioner. J.A. 54. Respondent left employment with Cir-

cuit City in November 1996. J.A. 48. On November 26, 1997,

respondent filed a state-law civil action in California state

court against petitioner and other defendants, alleging dis-

crimination and harassment on the basis of respondent’s

sexual orientation. J.A. 10, 47-48.

Petitioner filed an action in United States District Court

for the Northern District of California seeking to compel

arbitration of respondent’s claim. J.A. 55. The district court

held that the arbitration provision was enforceable under the

FAA, and it therefore granted petitioner’s request for an

order compelling arbitration and staying state court pro-

ceedings. J.A. 43-45.

3. The Ninth Circuit reversed. J.A. 53-56. The court of

appeals held that, because the arbitration agreement “was a

condition precedent to [respondent’s] employment,” it “was

an employment contract.” J. A. 56. The court had previously

held, in Craft v. Campbell Soup Co., 177 F.3d 1083, 1094

(1999), that, because of the Section 1 exclusion, “the FAA

does not apply to labor or employment contracts.” The court

therefore held the FAA inapplicable in this case. J.A. 56.

SUMMARY OF ARGUMENT

In provisions unchanged since its enactment, the Federal

Arbitration Act covers arbitration provisions in every con-

tract relating to “a transaction involving commerce.” 9

U.S.C. 2. It excludes, however, “contracts of employment of

seamen, railroad employees, or any other class of workers

engaged in foreign or interstate commerce.” 9 U.S.C. 1.

This case concerns the scope of the Section 1 exclusion and

its relationship to the Section 2 coverage provision. In par-

ticular, it presents the question whether excluding contracts

4

of “any other class of workers engaged in foreign or

interstate commerce” excludes all employment contracts

that would have otherwise been brought within the FAA by

the Section 2 coverage provision. That question can be

answered in two steps.

First, the terms immediately at issue—“involving com-

merce” in the Section 2 coverage provision and “engaged in

* * * commerce” in the Section 1 exclusion—are coexten-

sive. Standard dictionary definitions available to Congress

in 1925 (like those of today) defined each of the crucial

terms involved“ and engaged“ in terms of the other.

Decisions of this Court made clear that the engaged in

* * * commerce” formulation indicated an intent to go as

far as Congress thought it could in the exclusion, just as this

Court has held Congress went to the far reaches of its

Commerce Clause authority when it used the “involving

commerce” language of the Section 2 coverage provision.

Indeed, the precise language of the Section 1 exclusion

was proposed to Congress by a distinguished witness (then-

Secretary of Commerce Herbert Hoover), and a similarly

worded provision was proposed by the chairman of the ABA

committee that had originally drafted it. Each of them made

clear that this or similar language should be added, in

Hoover’s words, “{iJf objection appears to the inclusion of

workers’ contracts in the law’s scheme.” Hearing on S. 4213

and S. 4214 Before a Subcomm. of the Senate Comm. on the

Judiciary, 67th Cong., 4th Sess. 14 (1923). Therefore, each

of them, as well as the Congress that accepted their pro-

posal, believed that the terms of the Section 1 exclusion were

sufficient to remove employment contracts from the ambit of

the Section 2 “involving commerce” formulation. Peti-

tioner’s contention that “involving commerce” and “engaged

in * * * commerce” had different meanings at the time

Congress drafted the FAA—a contention on which peti-

tioner rests its argument—has no foundation.

— —

5

Second, no principle of statutory construction provides a

basis to depart from Congress’s intent, as expressed in the

plain words of Section 1 of the FAA, to exclude employment

contracts from the statute’s reach. Petitioner invokes the

canon of ejusdem generis to limit the meaning of “seamen,

railroad employees, or any other class of workers engaged in

foreign or interstate commerce” to transportation workers,

on the ground that the two specific categories (“seamen” and

“railroad employees”) are categories of transportation

workers. Though ejusdem generis is useful where a statute

is ambiguous, however, the statutory text and congressional

purpose here are clear. Moreover, there is no reason why

Congress would have wanted to limit the FAA exclusion to

transportation workers, since the same reasons that justify

the exclusion of transportation workers (including legislative

doubts that genuine consent can simply be assumed when

the employee signs a form arbitration agreement offered on

a take-it-or-leave-it basis) would apply equally to other

workers. Applying ejusdem generis as formulated by peti-

tioner would oust the States from their traditional authority

over employment relations—a result that this Court should

not read into the statute without a more express indication

of Congress’s intent. It would also perversely attribute to

the 1925 Congress that enacted the FAA an intent to subject

to the FAA non-transportation workers (over whom Con-

gress had little constitutional authority in 1925), leaving the

States with authority over only transportation workers

(over whom the 1925 Congress would have had the clearest

constitutional authority).

6

ARGUMENT

I. BECAUSE “ENGAGED IN * * * COMMERCE” IN

THE SECTION 1 EXCLUSION AND “INVOLVING

COMMERCE” IN THE SECTION 2 COVERAGE

PROVISION WERE UNDERSTOOD IN 1925 AS CO-

EXTENSIVE, THE ORDINARY MEANING OF THE

SECTION 1 PHRASE EXCLUDES FROM THE FAA

ALL EMPLOYMENT CONTRACTS THAT COULD

COME WITHIN THE FAA UNDER SECTION 2

Sections 1 and 2 of the FAA have remained unchanged

since they were enacted in 1925. See 43 Stat. 883. Section 2

is the basic coverage provision of the Act. It sets forth the

Act’s core principle that arbitration provisions in covered

contracts “shall be valid, irrevocable, and enforceable, save

upon such grounds as exist at law or in equity for the revoca-

tion of any contract.” 9 U.S.C. 2. Section 2 also specifies

what the Act covers: a] written provision in any maritime

transaction or a contract evidencing a transaction involving

commerce * * * or an agreement in writing to submit to

arbitration an existing controversy arising out of such a

contract [or] transaction.“ Ibid. For purposes of this case,

the key language of Section 2 is that requiring a transaction

“involving commerce.”

Section 1 of the FAA expressly excludes certain contracts

from the ambit of the FAA, providing that “nothing herein

contained shall apply to contracts of employment of seamen,

railroad employees, or any other class of workers engaged in

foreign or interstate commerce.” 9 U.S.C. 1. In Craft v.

Campbell Soup Co., supra, the court of appeals held that the

Section 1 exclusion, by the use of the terms “contracts of em-

ployment of * * * any other class of workers engaged in

foreign or interstate commerce,” excluded all contracts of

employment from the FAA. See Gilmer v. Interstate/

Johnson Lane Corp., 500 U.S. 20, 25 n.2 (1991) (reserving

that question). The court concluded that all employment

——— —

—— —L——— . re eee -

7

contracts that could come within the ambit of the FAA by

virtue of the “involving commerce” coverage language of

Section 2 are excluded as contracts of “workers engaged in

* * * commerce” under Section 1. Craft, 177 F.3d at 1094.

That conclusion is correct.

A. In 1925 When The FAA Was Enacted, The Terms

“Involving Commerce” And “Engaged In Commerce”

Were Coextensive

Petitioner rests its argument on the premise that “the § 1

exclusion of employment contracts for workers ‘engaged in

commerce’ must exclude a class of contracts well short of the

overall sweep of the statute as defined by the broader

language of § 2.“ Pet. Br. 16. As a matter of the plain

meaning of the words used by Congress when it drafted the

FAA in 1925, that is incorrect. The plain meanings of

“involving commerce” in Section 2 and “engaged in * * *

commerce” in Section 1, as given in general and legal dic-

tionary definitions of the day, were coextensive. Therefore,

by excluding “contracts of employment of * * * workers

engaged in * * * commerce” in Section 1, Congress ex-

cluded any employment contract “involving commerce”

within the meaning of Section 2.

Absent indications to the contrary, Congress is ordinarily

presumed to have used the ordinary and common meanings

of the terms it employs in statutes. Those ordinary mean-

ings, however, are necessarily the meanings of the terms “at

the time Congress enacted the statute.” Perrin v. United

States, 444 U.S. 37, 42 (1979). Dictionaries from the period

when Congress enacted the FAA establish that the terms

“involved in” and “engaged in” had the same meaning.

The authoritative dictionary of American English at the

time Congress enacted the FAA was Webster’s New Inter-

national Dictionary of the English Language (1917). Among

the definitions provided in that dictionary for “involve” is

“[t]o engage thoroughly; to occupy, employ, or absorb.” Id.

8

at 1138 (emphasis added). The dictionary thus gave “en-

gage” as one meaning of “involve.” Similarly, among the

definitions given in that dictionary for “engage” are It lo

become involved or entangled” and Atlo embark in a busi-

ness; to take a part; to employ or involve one’s self; to devote

attention and effort; to enlist; as, to engage in controversy.”

Id. at 725 (first emphasis added; second in original). The

dictionary thus gave “involve” as one meaning of “engage.”

See Smallwood v. Jeter, 244 P. 149, 153 (Idaho 1926). Each

of the terms “involve” and “engage” was defined in terms of

the other.’

Editions of Black’s and Bouvier’s legal dictionaries from

1910 and 1914 do not define “involve” and define only special-

ized meanings of “engage” not relevant here. But in 1933, a

few years after the enactment of the FAA, a new edition of

Black’s Law Dictionary added a definition of “engage” as

tjo employ or involve one’s self; to take part in; to embark

on.” Black’s Law Dictionary 661 (3d ed. 1933) (emphasis

added). That confirms the identity of meaning, both in

common and legal usage, between the terms “engaged in”

and “involved in” at the time the FAA was enacted.

In short, at the time Congress enacted the FAA, the com-

mon meanings of the term “involving commerce” in the Sec-

tion 2 coverage provision and “engaged in * * * commerce”

in the Section 1 exclusion were coextensive. To be sure, the

Modern dictionaries similarly define the two terms in part in terms

of each other. See Webster’s Third New Int'l Dictionary 751 (1976) (de-

fining “engage” as “to employ or involve oneself”), 1191 (defining “involve”

as “to draw in as a participant: engage, employ”).

2 Both dictionaries define “engagement” to mean “[{iJn French law”

Aa] contract” or “(t]he obligation arising from a quasi contract” and also

to refer in our own law to non-binding promises by married women.

Black’s Law Dictionary 425 (2d ed. 1910); 1 Bouvier’s Law Dictionary

1040 (3d rev. 1914). Bouvier's also defines “engaged” to mean (within

the meaning of a bylaw of a fraternal order, one is engaged in the sale of

liquor who is a partner in the saloon business, though he performs no labor

in or about the saloon and takes no active part in the business.” Ibid.

—

9

terms were not identical; while abstract entities (such as

transactions) could “involve” commerce, only people or busi-

ness organizations could “engage in” commerce. But al-

though the usage of the two terms varied in this way, their

common and ordinary meaning was identical.’ Accordingly,

by excluding “contracts of employment of * * workers

engaged in * * * commerce” from the FAA, Congress

excluded all contracts of employment “involving commerce”

under Section 1 of the FAA.

B. This Court’s Cases Establish That Congress Used Both

“Involving Commerce” And “Engaged In * * *

Commerce” To Reach To The Full Extent Of Its

Commerce Clause Power, As Then Understood

1. This Court held in Allied-Bruce Terminix Cos. v.

Dobson, 513 U.S. 265 (1995), that Congress intended the

FAA to cover all contracts within the scope of its Commerce

Clause power when it provided for coverage of contracts

“involving commerce” in the FAA’s Section 2 coverage pro-

vision. The Court explained:

The pre-New Deal Congress that passed the Act in 1925

might well have thought the Commerce Clause did not

stretch as far as has turned out to be the case. But, it is

not unusual for this Court in similar circumstances to ask

whether the scope of a statute should expand along with

the expansion of the Commerce Clause power itself, and

to answer the question affirmatively—as * * * we do

here.

3 Petitioner’s brief, apparently unwittingly, testifies to the modern

equivalence of the two terms in its descriptions of the workers covered

under his view of the statute. See Pet. Br. 8 (“workers who are actually

engaged in the movement of goods”), 22 (workers “engaged in actual trans-

portation”), 22 (workers “engaged in the actual interstate transportation

of goods”), 22 (“workers actually involved in the interstate transportation

of goods”), 23 (workers with “direct involvement in the interstate trans-

portation of goods”), 25 n.12 (workers “directly engaged in transport of

goods”) (emphases added in each quotation).

10

Id. at 275. As we show below, the same is true of the

“engaged in * * * commerce” language used in Section 1 of

the FAA. That language indicated an intent by Congress to

legislate to the full scope of its Commerce Clause power over

employment. It would be anomalous to adopt an expanding

interpretation of the “involving commerce” language in

Section 2 of the Act without interpreting the “engaged in

* * * commerce” language in Section 1 to have the same

flexibility. Indeed, to do so would defeat—not effectuate—

the intent of Congress that whatever contracts of employ-

ment were swept within the FAA by Section 2’s coverage

provision should be excluded by the Section 1 exclusion. See

R.A. Epstein, Fidelity Without Translation, 1 Green Bag 2d

21, 27-29 (1997).

2. In 1925, Congress’s power to regulate employment

relationships had been held by this Court to be severely

restricted. Congress described the relatively small number

of workers over whom it could exercise its Commerce Clause

power as “engaged in commerce.” Constitutional disputes

concerning the scope of Congress’s Commerce Clause power

over employment had to do with whether Congress could

regulate all employees who “engaged in commerce,” and

neither Congress nor this Court suggested that Congress

could regulate beyond that class. The history of the Federal

Employers’ Liability Acts provides an illustration. .

a. In 1906, Congress first enacted what has become

known as the first Federal Employers’ Liability Act

(FELA). Act of June 11, 1906, ch. 3073, 34 Stat. 232. That

Act provided that “every common carrier engaged in trade

or commerce * * * between the several States * * * shall

be liable to any of its employees” for damages resulting from

specified negligent acts. Ibid. (emphasis added). Relying on

the “any of its employees” language, this Court held that,

even if the employer was generally “engaged in * * *

commerce,” the Act was unconstitutional because Congress

had the power to provide a remedy only for employees who

11

were actually engaged in interstate commerce at the time of

the injury. As the Court explained, It he act then being ad-

dressed to all common carriers engaged in interstate

commerce, and imposing a liability upon them in favor of any

of their employees, without qualification or restriction as to

the business in which the carriers or their employees may be

engaged at the time of the injury, of necessity includes

subjects wholly outside of the power of Congress to regulate

commerce.” Howard v. Illinois Cent. R.R., 207 U.S. 463, 498

(1908) (emphasis added). The Court explained that among

the forbidden “subjects” regulated by the statute would be a

railroad doing interstate and local business “having shops for

repairs, and it may be for construction work, as well as a

large accounting and clerical force.” Id. at 498-499. At the

time of Howard, Congress’s Commerce Clause power thus

did not even extend so far as providing legal rules generally

governing employees working for common carriers who

were “engaged in trade or commerce.”

Congress took heed of the decision in Howard and enacted

a revised FELA the same year. The revised statute, now

limited by its terms to railroads, provided that “{e]very com-

mon carrier by railroad while engaging in commerce be-

tween any of the several States * * * shall be liable in

damages to any person suffering injury while he is employed

by such carrier in such commerce.” 45 U.S.C. 51, Act of

Apr. 22, 1908, ch. 149, 35 Stat. 65 (emphasis added). The

Court upheld the constitutionality of the revised FELA

because, “unlike the one condemned in [Howard], [it] deals

only with the liability of a carrier engaged in interstate com-

merce for injuries sustained by its employees while engaged

in such commerce.” Mondou v. New York, New Haven &

Hartford R.R., 223 U.S. 1, 51-52 (1912) (emphasis added).

Under Howard and Mondou, Congress’s Commerce Clause

power extended only to employees who were personally

engaged in interstate commerce, and even then only to those

employees while they were engaged in interstate commerce.

12

In cases beginning the following year, the Court retreated

slightly from these principles, so that employees while

engaged in work that was inextricably tied to covered em-

ployment were also covered. For example, in three cases

decided on May 26, 1913, the Court held that the FELA

constitutionally provided coverage for an iron worker

injured while repairing a bridge for an interstate railroad,

Pedersen v. Delaware, Lackawanna & W. R.R., 229 U.S. 146

(1913); a clerk keeping track of railroad cars in a rail yard of

an interstate railroad, St. Louis, San Francisco & Tex. Ry.

v. Seale, 229 U.S. 156 (1913); and a worker in a rail yard

guiding a locomotive through some switches so that it could

be connected to an interstate train, Norfolk & W. Ry. v.

Earnest, 229 U.S. 114 (1913). Those cases did not alter the

principle that Congress’s authority to regulate employment

was limited to employees who were engaged in interstate

commerce while they were engaged in such commerce. But

they did slightly expand the meaning of “engaging in com-

merce,” the linguistic formulation Congress used to express

its intent to exercise all of its Commerce Clause power.

b. The following year, in Illinois Central Railroad v.

Behrens, 233 U.S. 473, 477 (1914), the Court had reached the

point where it “entertain[ed] no doubt that the liability of

the carrier for injuries suffered by a member of the crew in

the course of its general work was subject to regulation by

Congress, whether the particular service being performed at

the time of the injury, isolatedly considered, was in inter-

state or intrastate commerce.” But the Court held in

Behrens that the revised FELA nonetheless did not cover a

railroad worker injured in a collision as part of a crew that

“was moving several cars loaded with freight which was

wholly intrastate,” even though the same crew frequently

moved interstate cars over the same tracks. Id. at 476.

Behrens thus held that, although Congress had constitu-

tional power to regulate the worker in that case, the revised

FELA did not do so.

13

Petitioner errs in citing Behrens for the proposition that

the “engaging in commerce” language in the revised FELA

“did not extend to the full range of Congress’ Commerce

Clause authority.” Pet. Br. 18. The Court’s decision in

Behrens did not turn on whether the employee or employer

were “engaging in commerce.” It turned on the temporal

qualification in the revised FELA—the “while” clause. As

the Court explained, Igliving to the words ‘suffering injury

while he is employed by such carrier in such commerce’ their

natural meaning, * * * it is clear that Congress intended to

confine its action to injuries occurring when the particular

service in which the employee is engaged is a part of

interstate commerce.” 233 U.S. at 478. See also ibid. (IThhe

true [statutory] test is the nature of the work being done at

the time of the injury.) (emphasis added). Thus, it was the

use of the term “while”—not any doubt about the scope of

the “engaging in commerce” language—that limited the

reach of the revised FELA to less than Congress’s full

constitutional power. Had Congress not included the “while”

provision in the revised FELA, the employee would have

been covered by the statutory “engaging in commerce” pro-

vision.

In Section 1 of the FAA, Congress did not include any

“while” clause or temporal qualification. Accordingly, under

Behrens and the other cases cited above, the “engaged in

* * * commerce” language in Section 1 extended to the full

reach of Congress’s power over employment.“

4 The Court resolved any tension between its decision in Behrens and

its decision in Howard by explaining that the defect in the first FELA was

not that it included some employees who were not transporting items in

commerce at the time of the accident, but that Congress had “attempted

to regulate the liability of every carrier in interstate commerce 7 °°

any injury to any employee, even though his employment had no

commection watever wih interstate commenen” $98 U.S, at 477.

Petitioner makes a similar error in relying on Shanks v. Delaware,

Lackawanna & Western Railroad, 239 U.S. 556, 558 (1916). In that case,

the Court stated the test for coverage under the revised FELA as: [Was

14

e. In short, at the time Congress enacted the FAA, its

Commerce Clause authority over employees extended no

farther than to those “engaged in commerce.“ Congress

therefore used those terms in the FAA’s Section 1 exclusion

to express its intent to cover all of the employees it consti-

tutionally could. No decision of this Court suggested that

Congress’s authority over employees extended beyond the

“engaging in commerce” formulation. f

The scope of the “engaging in commerce” language did

expand gradually over time, as shown by Pedersen, Seale,

and Earnest. See also, e.g., Southern Pac. Co. v. Industrial

Accident Comm’n, 251 U.S. 259, 262 (1920) (FELA applies to

lineman repairing electrical line used by interstate and intra-

state trains). Congress was surely aware of the decisions

the employee at the time of the injury, engaged in interstate transporta-

tion or in work so closely related to it as to be practically a part of it?”

Petitioner asserts (Br. 18) that the Cou t thereby construed FELA’s

“engaging in commerce” language “to identify only a specific subcategory

of workers falling within Congress’ Commerce Clause authority.” But the

reason the test under the revised FELA applied only to transportation

was not that the term “engaging in commerce” was so limited. It was,

instead, the result of the fact that the revised FELA, by its terms, applied

only to “every common carrier by railroad.” That in no way suggests or

supports an inference that the “engaging in commerce” language in the

revised FELA—or the similar language in Section 1 of the FAA—was

limited to transportation workers.

6 Petitioner is correct (Br. 29) that Congress’s Commerce Clause

authority in 1925 was “not limited to ‘employee : who actually transported

people or goods in interstate commerce. It . uld surely regulate com-

mon carriers in non-transportation businesses, such as telegraph and

telephone companies. See Howard, 207 U.S. at 497. More importantly,

Congress could regulate “the purchase, sale and exchange of commodities”

in interstate commerce, as petitioner states (Br. 29), and business transac-

tions “incident{] to” such activities. See Stafford v. Wallace, 258 U.S. 495,

516 (1922). Congress’s Commerce Clause authority over employees and

their relationship to employers, however, was narrower. Hammer v.

Dagenhart, 247 U.S. 251, 272 (1918) (“The making of goods and the mining

of coal are not commerce, nor does the fact that these things are to be

afterwards shipped or used in interstate commerce, make their production

a part thereof.”).

15

expanding the scope of “engaging in commerce” when it

enacted the FAA. Accordingly, by using the “engaged in

* * commerce“ formulation in the Section 1 exclusion,

Congress ensured that the exclusion expanded along with

any expansions in Congress’s Commerce Clause authority.

There are no workers who Congress believed would be cov-

ered by the Section 2 coverage provision because their em-

ployment contracts “involv[ed] commerce,” but whose work

fell outside the “engaged in commerce” exclusion of Section

1.

d. Petitioner argues (Br. 15) that in cases decided after

this Court’s recognition of an expanded congressional Com-

merce Clause authority in the 1930’s, the Court construed

the term “engaged in commerce” to be narrower than the

full scope of Congress’s commerce power. Some of the cases

cited construed statutes enacted after the 1930’s, by which

time the term “in commerce” had become a term of art. In

Russell v. United States, 471 U.S. 858 (1985), for example,

the Court noted, in construing the federal arson statute

enacted in 1970, that “Congress is aware of the distinction

between legislation limited to activities ‘in commerce’ and an

assertion of its full Commerce Clause power.” Id. at 859 n.4

(internal quotation marks omitted). By 1970, Congress was

thus aware that “in commerce” denoted something less than

Congress’s full Commerce Clause authority. Nothing in

Russell suggests that Congress in 1925 was aware of that

meaning.

Similarly, in McLeod v. Threlkeld, 319 U.S. 491 (1943), the

Court construed the Fair Labor Standards Act provision

covering employees satisfying two distinct standards—

“engaged in commerce or in the production of goods for

commerce.” The Court held that “engaged in commerce” in

that statute did not extend as far as the Commerce Clause.

The Court relied on Congress’s “deliberate and purposeful”

express decision in 1938 to reject proposed “affecting com-

merce” language in favor of what by then were known to be

16

the two more specific categories. See id. at 493. Indeed, the

Fair Labor Standards Act had been passed in the aftermath

of this Court’s landmark decision in NLRB v. Jones &

Laughlin Steel Corp., 301 U.S. 1 (1937), which first upheld an

“affecting commerce” statute and made clear that “affecting

commerce” provided a generally permissible basis for the

exercise of the broadest reaches of Congress’s Commerce

Clause authority. See also United States v. Darby, 312 U.S.

100, 119-123 (1941); ef. A.L.A. Schechter Poultry Corp. v.

United States, 295 U.S. 495, 544-551 (1935) (denying general

“affecting commerce” authority). By that time, as the Court

noted in McLeod, It Ihe distinction in the coverage arising

from this choice of language was well known to Congress.”

319 U.S. at 493 n.2 (citing, inter alia, Jones & Laughlin).

McLeod does not suggest that a 1925 Congress would have

been aware of the distinction.

Other cases cited by petitioner rely on the particular legal

context of the statutory provision at issue. See FTC v.

Bunte Bros., 312 U.S. 349, 353, 351-352 (1941) (refusing to

construe “in commerce” broadly, in reliance on 25-year his-

tory. of narrow construction by Federal Trade Commission

as “practical construction of the [statute] by those entrusted

with its administration”). In United States v. American

Building Maintenance Industries, 422 U.S. 271 (1975), for

example, the Court refused to construe the term “engaged in

commerce” in Section 7 of the Clayton Act, 15 U.S.C. 18, to

cover the whole scope of Congress’s Commerce Clause

power, based on the need to construe that provision harmo-

niously with the varying scope of related federal antitrust

provisions. 422 U.S. at 276-279.“ The same consideration

7 Petitioner cites Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186

(1974), as reaching the same narrow construction of “engaged in com-

merce.” Gulf Oil involved three different “engaged in commerce”

provisions in the antitrust laws. One of them was enacted in 1936, and the

Court construed it narrowly based on the fact that the legislative record

showed that Congress had deleted an “effects on commerce’ provision,

17

suggests the need to construe “engaged in * * * com-

merce” in the Section 1 exclusion harmoniously with “involv-

ing commerce” in the Section 2 coverage provision. Having

construed “involving commerce” in the Section 2 coverage

provision to expand with Congress’s Commerce Clause

authority, the Court should apply the same principle to

“engaged in * * * commerce” in the Section 1 exclusion.

The Court also relied in American Building Maintenance

on the fact that Section 7 of the Clayton Act was amended

and reenacted in 1950. 422 U.S. at 279-280. Referring to

amendments to Section 7 during reenactment and committee

reports showing that Congress was “fully aware that

both the original and the newly amended versions of § 7

were limited to corporations ‘engaged in commerce,’” the

Court concluded that “the decision to re-enact § 7 with the

same ‘in commerce’ limitation can be rationally explained

only in terms of a legislative intent, at least in 1950, not to

apply the rather drastic prohibitions of § 7 of the Clayton

Act to the full range of corporations potentially subject to

the commerce power.” 422 U.S. at 281.

Contrary to petitioner’s contention (Br. 30), nothing in the

process of codifying—but not amending—the FAA in 1947,

Act of July 30, 1947, ch. 392, § 2, 61 Stat. 670, shows any

awareness of limitations in the “engaged in com-

merce” language in Section 1 of the FAA,“ At the time of

leaving only the ‘in commerce’ language.” Id. at 200. The Court also noted

that a broad interpretation would extend the statute “beyond its clear

language to reach a multitude of local activities that hitherto have been

left to state and local regulation.” Jd. at 201. Neither of those rationales

would provide a basis to narrow the scope of the 1925 FAA. The Court

did not resolve the proper construction of the other two provisions at issue

in Gulf Oil, see id. at 201-202, although it addressed one of them later that

Term in American Building Maintenance.

8 See H.R. Rep. No. 255, Soth Cong., Ist Sess. 1 (1947) (“This bill takes

each section of title 9 * * * and without any material change enacts each

section into positive law. No attempt is made in this bill to make amend-

ments in existing law.“). Of course, because this Court did not construe

18

the codification, Gatliff Coal Co. v. Cox, 142 F.2d 876, 882

(6th Cir. 1944), the only reported appellate decision on the

subject, had held that the FAA did not apply to employment

contracts. It was not until six years later that the first

appellate decision held to the contrary. See Tenney Eng’g,

Inc. v. United Elec. Workers, 207 F.2d 450 (3d Cir. 1953).

Moreover, while the Court in American Building Mainte-

nance was concerned about a “drastic” expansion of the

statute there, construing the Section 1 exclusion language to

be as broad as the Section 2 coverage provision would not

work any expansion of the FAA. To the contrary, in this:

case it is petitioner’s construction of “engaged in

commerce” in Section 1 that would “drastically” expand the

FAA to cover a controversial area—employment contracts

—that Congress had no reason to believe was included in the

statute it enacted in 1925.

Finally, the Court has regularly noted in cases construing

the “engaged in” language that Itlranslation of an implica-

tion drawn from the special aspects of one statute to a totally

different statute is treacherous business.” Bunte Bros., 312

U.S. at 353. See also American Bldg. Maint., 422 U.S. at 277

(“The phrase ‘in commerce’ does not, of course, necessarily

have a uniform meaning whenever used by Congress.”); Gulf

Oil Corp. v. Copp Paving Co., 419 U.S. 186, 197 (1974) (“The

answer [to the meaning of ‘engaged in commerce’] depends

on the statutory language, read in light of its purposes and

legislative history.”). In the context of the FAA, the

construction of “engaged in * * * commerce” in Section 1

should not depend on this Court’s construction of other

provisions in other statutes enacted in different contexts and

the “involving commerce” language as extending to the full scope of Con-

gress’s Commerce Clause authority until almost 50 years later in Allied-

Bruce, Congress could not have been aware of the potential problem that

could be created by broadly construing “involving commerce” in the

FAA’s Section 2 coverage provision and then narrowly construing

“engaged in * * * commerce” in the Section 1 exclusion.

19

with different histories and purposes. Rather, the “engaged

in * * * commerce” language of Section 1 of the FAA

should be construed in the same way that this Court has

flexibly construed the cognate “involving commerce”

language in Section 2, so that Congress’s original intent not

to include employment contracts in the FAA is preserved.

C. The Record Of The Proceedings Before Congress

Establishes That Congress Understood The Terms

“Involving Commerce” And “Engaged In * * *

Commerce” To Be Coextensive

The FAA was originally drafted by a committee of the

American Bar Association. See H.R. Rep. No. 96, 68th Cong.,

Ist Sess. 1 (1924). See generally I. R. Macneil, American

Arbitration Law 85-121 (1992) (discussing history of FAA).

A bill embodying the ABA’s draft was introduced in Con-

gress in December 1922. H.R. 13522, 67th Cong., 4th Sess.

(1922). It quickly attracted attention in labor circles, notably

that of Andrew Furuseth, President of the International

Seamen’s Union. See M.W. Finkin, “Workers’ Contracts”

Under the United States Arbitration Act: An Essay In

Historical Clarification, 17 Berkeley J. Emp. & Lab. L. 282,

284 (1996). The Union and the American Federation of

Labor immediately went cn record against the bill’s applica-

tion to employment contracts, on the ground that the genu-

ine consent to arbitrate disputes that was the backbone of

commercial arbitration agreements was lacking when em-

ployees sign a take-it-or-leave-it employment contract with

an arbitration provision. Ibid. As a union resolution stated,

the bill “makes need, hunger and want, the basis of contracts

which * * * a misused equity power will enforce.” Id. at

284 n.14; cf. Volt Info. Sciences, Inc. v. Leland Stanford Jr.

Univ., 489 U.S. 468, 479 (1989) (“Arbitration under the Act is

a matter of consent, not coercion.”); Prima Paint Corp. v.

Flood & Conklin Mfg., 388 U.S. 395, 403 n.9 (1967) (“We note

that categories of contracts otherwise within the Arbitration

20

Act but in which one of the parties characteristically has

little bargaining power are expressly excluded from the

reach of the Act. See § 1.”).

On January 31, 1923, a Senate subcommittee held hearings

on the bill. Sales and Contracts to Sell in Interstate and

Foreign Commerce, and Federal Commercial Arbitration:

Hearing on S. 4213 and S. 4214 Before a Subcomm. of the

Senate Comm. on the Judiciary, 67th Cong., 4th Sess. (1923)

(Senate Hearing). Furuseth’s concerns were echoed by

Senator Walsh at the hearing:

The trouble about the matter is that a great many of

these contracts that are entered into are really not

voluntar[y] things at all. Take an insurance policy. * * *

It is the same with a good many contracts of employ-

ment. A man says, “These are our terms. All right, take

it or leave it.” Well, there is nothing for the man to do

except to sign it; and then he surrenders his right to have

his case tried by the court, and has to have it tried before

a tribunal in which he has no confidence at all.

Senate Hearing 9 (emphasis added). Those considering the

legislation were concerned about the questions about con-

sent that would arise upon application of the arbitration act

to employment contracts. .

Having apparently heard of labor’s concerns with the bill,

then-Secretary of Commerce Herbert Hoover wrote a letter

to the subcommittee supporting the bill. Hoover’s letter is

the source of the exclusion in the FAA, and it explains its

intended scope. The letter states that “[i]f objection appears

to the inclusion of workers’ contracts in the law’s scheme, it

might be well amended by stating ‘but nothing herein

contained shall apply to contracts of employment of seamen,

railroad employees, or any other class of workers engaged in

interstate or foreign commerce.’” Senate Hearing 14. Secre-

tary Hoover apparently believed that that language—which

was adopted verbatim into the FAA—would address any

21

objection to “the inclusion of workers’ contracts in the law’s

scheme.” There was certainly no suggestion that it would

exclude only some employment contracts, or that Congress

should draft the exclusion narrowly to achieve that end.

Moreover, others shared Hoover’s view. The chairman of

the ABA committee that had drafted the legislation, W.H.H.

Piatt, also testified before the subcommittee. In response to

the question whether he had heard of objections by labor to

the bill, he stated:

(Mr. Furuseth] has objected to it, and criticized it on the

ground that the bill in its present form would affect, in

fact compel, arbitration of the matters of agreement

between the stevedores and their employers. Now, it

was not the intention of the bill to have any such effect as

that. It was not the intention of this bill to make an

industrial arbitration in any sense; and so I suggest that

in as far as the committee is concerned, if your honorable

committee should feel that there is any danger of that,

they should add to the bill the following language, “but

nothing herein contained shall apply to seamen or any

class of workers in interstate and foreign commerce.” It

is not intended that this shall be an act referring to labor

disputes, at all. It is purely an act to give the merchants

the right or the privilege of sitting down and agreeing

with each other as to what their damages are, if they

want to do it. Now, that is all there is in this.

Senate Hearing 9. Piatt’s suggestion did not include the ref-

erence to railroad workers in Hoover’s letter, and it sub-

stituted for the phrase Hoover suggested (“any other class of -

workers engaged in interstate or foreign commerce”) a

slightly different formulation (“any class of workers in inter-

state and foreign commerce”). But Piatt’s suggestion none-

theless establishes that Congress was informed that the

purpose of the FAA was to address commercial disputes

among merchants and that a provision excluding “workers in

22

* * * commerce” would eliminate “any danger” that the

FAA could be applied to “industrial arbitration” or “labor

disputes.”

No further action was taken on the FAA until the next

Congress. Hearings were held in 1924 before a joint Senate-

House committee on the FAA, as now amended to include

Hoover’s Section 1 exclusion. Arbitration of Interstate Com-

mercial Disputes: Joint Hearings on S. 1005 and H.R. 646

Before the Subcomms. of the Comms. on the Judiciary, 68th

Cong., Ist Sess. (1924). Although the exclusion was not

further addressed in any detail, the basic explanation for the

purpose and language of the exclusion was again made part

of the record. The chairman of the committee submitted

Hoover’s letter at the hearing, id. at 19, and it therefore was

published again as part of the hearing record. Id. at 21. The

record of the Joint Hearing is replete with witnesses stress-

ing the need for legislation to enforce arbitration agreements

in commercial transactions, and no witness or statement

suggests that employment contracts would be included. In-

deed, with the elimination of employment contracts, “[t]here

was no opposition to the bill before the committee.” H.R.

Rep. No. 96, 68th Cong., Ist Sess. 1 (1924).

This history shows that highly respected and legally

sophisticated participants in the process of drafting and

enacting the FAA were concerned that it would be con-

strued to apply to employment contracts, and that they

sought a formulation that would block such coverage. It

shows that the “engaged in * * * commerce” formulation

that Hoover proposed was presented to and accepted by

Congress as an appropriate way to kcep employment con-

tracts out of the ambit of the FAA. That is potent evidence

that Congress viewed the term “engaged in * * * com-

merce” in the Section 1 exclusion as sufficiently broad to

eliminate whatever employment contracts might fall within

the “involving commerce” term in Section 2.

23

II. THERE IS NO REASON NOT TO CONSTRUE THE

TERMS IN THE SECTION 1 EXCLUSION IN

ACCORD WITH THEIR ORDINARY MEANING

As the above discussion demonstrates, the plain meaning

of the statutory terms is that the FAA’s Section 1 exclusion

for “any other class of workers engaged in * * * com-

merce” is coextensive with the Section 2 coverage provision;

any employment contracts drawn into the statute by Section

2 are excluded by the plain meaning of that formulation in

Section 1. Therefore, unless there is some other reason to

construe Section 1 more narrowly than its plain terms

indicate, the court of appeals’ conclusion that employment

contracts are not covered by the FAA is correct. The “lib-

eral federal policy favoring arbitration,” Moses H. Cone

Mem’! Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983),

does not suffice to narrow Section 1, both because the very

question in this case is whether Congress wanted to exclude

employment contracts from that policy by enacting the Sec-

tion 1 exclusion and because that policy in any event could

not overcome the plain statutory language and history. An

® Petitioner mistakenly relies (Br. 40) on the provision of the Civil

Rights Act of 1991, Pub. L. No. 102-166, § 118, 105 Stat. 1081, providing

that (where appropriate and to the extent authorized by law, the use of

alternative means of dispute resolution, including settlement negotiations,

conciliation, facilitation, mediation, factfinding, minitrials, and arbitration,

is encouraged” to resolve federal discrimination cases. See also 42 U.S.C.

12212. The EEOC has long taken the position that postdispute agree-

ments to employ alternative means of dispute resolution, including binding

arbitration, should be fostered. The advisability of non-negotiated pre-

dispute agreements to arbitrate as a condition of employment, however, is

far more controversial. Accordingly, the statutory provision on which

petitioner relies carefully “encourage(s)” arbitration only “[wJhere appro-

priate.” See Wright v. Universal Mar. Serv. Corp., 525 U.S. 70, 82 n.2

(1998); see also H.R. Rep. No. 40, 102d Cong., Ist Sess. Pt. 1, at 97, 104

(1991) (inadvisability of enforcing predispute agreements); H.R. Rep. No.

40, 102d Cong., Ist Sess. Pt. 2, at 41 (1991) (predispute agreement in em-

ployment contract does not preclude Title VII claim in court). That provi-

24

examination of petitioner’s other arguments demonstrates

that there are in fact no sound bases to depart from the plain

meaning rue this case.

1. Petitioner contends that Section 1 excludes only em-

ployment contracts of transportation workers, see note 2,

supra, and that all other employment contracts are covered

by the FAA. There is, however, a logical flaw in petitioner’s

argument. Even if petitioner were correct that “the § 1

exclusion of employment contracts for workers ‘engaged in

commerce’ must exclude a class of contracts well short of the

overall sweep of the statute as defined by the broader

language of § 2,” Pet. Br. 16, it would not follow that employ-

ment contracts of transportation workers would be the class

excluded. To the contrary, the accepted modern meaning of

“engaged in commerce,” even if narrower than the full sweep

of the Commerce Clause, is to refer to “persons or activities

within the flow of interstate commerce—the practical, eco-

nomic continuity in the generation of goods and services for

interstate markets and their transport and distribution to

the consumer.” Gulf Oil, 419 U.S. at 195; see also United

States v. Robertson, 514 U.S. 669, 671-672 (1995) (per curiam)

(defendant who purchased goods in California for use in

Alaska mine, hired workers out of State and brought them to

Alaska, and took mine output out of State “engaged in * * *

commerce”); Mitchell v. Lublin, McGaughy & Assocs., 358

U.S. 207, 213 (1959) (employees “engaged in” commerce

where they “worked on plans and specifications” for facilities

used for commerce). That obviously extends far beyond

those employed in the transportation of goods.

Applying that formulation to this case would require affir-

mance of the judgment below. Respondent was employed by

“a national retailer of brand-name consumer electronics and

related products,” Pet. Br. 4, that “distribut[es] to the

of the FAA Section 1 exclusion enacted in 1925.

25

consumer.” Gulf Oil, 419 U.S. at 195. Respondent is

therefore a member of a “class of workers engaged in * * *

commerce” under even the modern, post-1938 meaning of

that phrase. Accordingly, petitioner’s own arguments

regarding the meaning of “engaged in * * commerce,”

even if correct, would dictate that respondent—who is not a

transportation worker—is within the Section 1 exclusion.

2. Petitioner’s argument thus reduces simply to the

proposition that the maxim of ejusdem generis should be

applied to limit the formulation “seamen, railroad employees,

or any other class of workers” to transportation workers.

For the reasons given above, the concluding phrase (“en-

gaged in foreign or interstate commerce”) provides no sup-

port for the application of ejusdem generis here or the

limitation of the exclusion to transportation workers. If

ejusdem generis is to be applied, it must be for other

reasons.

a. There is no sound reason for applying the maxim in

this case. As this Court has explained, It Ihe rule of ejusdem

generis * * * is only an instrumentality for ascertaining the

correct meaning of words when there is uncertainty” and it

does “not require rejection of that sense of the words which

best harmonizes with the context and the end in view.”

United States v. Powell, 423 U.S. 87, 91 (1975) (quoting

Gooch v. United States, 297 U.S. 124, 128 (1936)). “That a

word may be known by the company it keeps is * * * not

an invariable rule, for the word may have a character of its

own not to be submerged by its association.” Russell Motor

Car Co. v. United States, 261 U.S. 514, 519 (1923). Like

other similar maxims, ejusdem generis “may not be used to

create but only to remove doubt.” Ibid. See also Powell, 423

U.S. at 90 ([Wie would be justified in narrowing the statute

only if such a narrow reading was supported by evidence of

congressional intent over and above the language of the

statute.”).

26

As explained above, there is no ambiguity in the Section 1

language—“seamen, railroad employees, or any other class

of workers engaged in * * * commerce”—to which

petitioner would apply ejusdem generis. Under that

language, It he Arbitration Act does not apply to ‘contracts

of employment of . . . workers engaged in foreign or inter-

state commerce,” United Paperworkers Int! Union v.

Misco, Inc., 484 U.S. 29, 40 n.9 (1987) (ellipsis in original).

The analysis thus need go no farther.

Indeed, this Court has held that it is “inappropriate to

apply the rule of ejusdem generis” to quite similar “expan-

sive” language. Harrison v. PPG Indus., Inc., 446 U.S. 578,

589 (1980). In Harrison, the Court was asked to apply

ejusdem generis to limit the term “any other final action,” as

it appeared in an extensive list of administrative orders in

Section 307(b)(1) of the Clean Air Act, 42 U.S.C. 7607(b)(1).

After stating that it “discern{ed] no uncertainty in the

meaning” of the language at issue, the Court held that “the

phrase ‘any other final action’ in the absence of legislative

history to the contrary, must be construed to mean exactly

what it says, namely, any other final action.” 446 U.S. at 588-

589. The same principle applies here. See also Garcia v.

United States, 469 U.S. 70, 73-75 (1984) (declining to apply

ejusdem generis to construe “any money or other property”

to refer only to postal money or property in phrase “any mail

matter or * * * any money or other property of the United

States“).“

10 Petitioner argues (Br. 22) that construing any other class of work.

ers“ according to its plain terms would simply excise the words seamen

and ‘railroad employees’ from FAA § 1.” Literally, that is not true, for the

concluding phrase applies only to “any other class of workers.” Indeed,

the addition of the word “other” is one of the differences between

Hoover’s formulation (which Congress adopted) and Piatt’s formulation

(which Congress did not) of the exclusion. In any event, this kind of list-

ing, concluding with a broad term that could render the other terms super-

fluous, is ordinarily present in statutes, like those at issue in Garcia and

Powell, to which the Court refuses to apply eyusdem generis.

27

b. At the very least, application of ejusdem generis re-

quires the articulation of a persuasive reason why Congress

would have wanted to achieve the narrowing result that

application of the maxim would achieve; ordinarily, the

reason is that a broad reading of a statutory phrase would

givle] unintended breadth to the Acts of Congress.”

Jarecki v. G. D. Searle & Co., 367 U.S. 303, 307 (1961). See

also Hughey v. United States, 495 U.S. 411, 420 (1990)

(applying ejusdem generis to avoid result that a “catchall

phrase imports into the * * * provisions a wholly new sub-

stantive dimension not otherwise evident in the statute”);

Third Nat! Bank v. Impac Ltd., Inc., 432 U.S. 312, 322-323

(1977) (noting numerous reasons, including noscitur a sociis,

for adopting narrowing construction of statutory term and

noting that “[nJo reason has been advanced” why Congress

would have intended the broader reading of the statute).

In Powell, for example, the Court declined an invitation to

limit the phrase “[p]istols, revolvers, and other firearms ca-

pable of being concealed on the person” in a criminal statute

to exclude weapons not inherently concealable, such as a

1 For example, in Gustafson v. Alloyd Co., 513 U.S. 561 (1995), the

Court applied the related doctrine of noscitur a sociis in interpreting the

term “communication” in the statutory phrase “any prospectus, notice, cir-

cular, advertisement, letter, or communication, written or by radio or

television, which offers any security for sale or confirms the sale of any

security.” 15 U.S.C. 77b(10). The Court explained that ¶flrom the terms

‘prospectus, notice, circular, advertisement, [or] letter,’ it is apparent that

the list refers to documents of wide dissemination.” 513 U.S. at 575. Ac-

cordingly, the Court applied the narrowing maxim to limit the term

“written communication” to “communications held out to the public at

large,” id. at 576, based in part on the conclusion that holding otherwise

would “effect{] expansion of the coverage of the entire statute,” id. at 578.

See also ibid. (“It is not plausible to infer that Congress created this

extensive liability for every casual communication between buyer and

seller in the secondary market.”). In this case, it is applying the doctrine

of ejusdem generis that would substantially expand the FAA to include

employment contracts; interpreting the statute according to its terms

would permit the legislature (federal or state) to make the difficult policy

decisions involved in applying the FAA to employment contracts.

28

sawed-off shotgun. 423 U.S. at 89 n.3. The Court found that

the statutory purpose—“to make it more difficult for crimi-

nals to obtain concealable weapons,” id. at 91—suggests the

broader, not narrower, reading. In Norfolk & Western Rail-

way v. American Train Dispatchers’ Ass’n, 499 U.S. 117, 129

(1991), the Court explained that the canon “does not control

* * * when the whole context dictates a different conclu-

sion.” On that basis and after an examination of the legal

context and purpose of the statute in question, the Court

declined to apply ejusdem generis and held instead that an

exemption “from the antitrust laws and all other law,

including State and municipal law” includes “a carrier’s legal

obligations under a collective-bargaining agreement.” Id. at

127.”

In this case, applying ejusdem generis to limit the FAA

Section 1 exclusion to employment contracts of transporta-

tion workers would achieve no discernible purpose other

than to frustrate Congress’s evident intent. The reasons

advanced for the exclusion when it was drafted and added to

the statute—in particular, the doubt about the integrity of

an employee’s consent to an arbitration clause likely imposed

on a take-it-or-leave-it basis in an employment contract—

are at least as applicable to other classes of workers as to

transportation workers. Cf. Prima Paint, 388 U.S. at 403

n.9. Although it has been urged that an exclusion for

transportation workers could be justified on the ground that

statutes already in existence in 1925 provided for arbitration

of at least some disputes of seaman and railroad workers, see

Tenney Eng g, Inc., 207 F. 2d at 452, that justification cannot

explain the inclusion of other transportation workers, such

12 See also Gooch, 297 U.S. at 128 (refusing to apply ejusdem generis to

limit phrase “for ransom or reward or otherwise” in kidnapping statute to

pecuniary motivations); Helvering v. Stockholms Enskilda Bank, 293 U.S.

84, 88-89 (1934) (refusing to exclude interest on tax refunds from scope of

phrase “interest on bonds, notes, or other interest-bearing obligations” in

tax statute).

29

as those working in the bus, truck, or even the nascent air

transit industries. See M. Finkin, supra, 17 Berkeley J.

Emp. & Lab. L. at 291 n.40 (noting that in 1926 there were

25,000 trucks and more than 3000 buses operating in inter-

state commerce); cf. Buck v. Kuykendall, 267 U.S. 307 (1925)

(claim by operator of interstate bus line to be relieved of

state-luw requirement).

Indeed, petitioner has a difficult time formulating a ration-

ale for a transportation-worker-only exclusion. Petitioner

notes (Br. 27) the theories that Congress simply “‘rounded

out’ the exclusionary clause to cover similar transportation

workers” after including seamen and railroad workers and

that Congress “anticipated that other transportation work-

ers * * * also would unionize and lobby successfully for

protective legislation.” Petitioner concludes (ibid.), how-

ever, that “[jJust as likely, these additional groups of trans-

portation workers were included simply to avoid any appear-

ance of favoritism for selected ‘special interests“ The

“rounding out” and “avoiding favoritism” theories, however,

are not explanations for a transportation-worker-only exclu-

sion; they are acknowledgements of the lack of any good rea-

son why Congress would have wanted to write a statute that

would be interpreted as petitioner suggests. Although Con-

gress no doubt sometimes acts in that way, there is no rea-

son to presume that it has, when the alternative explanation

that Congress intended to exclude all employment contracts

is both logically sound and well supported by the statutory

language and the legislative record.

e. Finally, petitioner’s expansion of the FAA to include

most employment contracts would be particularly unwar-

ranted, because it would oust the States from a part of their

traditional authority over the employer-employee relation-

ship. See Southland Corp. v. Keating, 465 U.S. 1 (1984). The

States are well-equipped to adopt nuanced approaches,

tailored to local settings and inclinations, to perceived abuses

—as well as advantages—that might arise from enforcement

30

of arbitration agreements in the employment setting.” If

there is any doubt that Congress intended generally to ex-

clude employment contracts from the FAA, it would be

inappropriate to apply ejusdem generis to expand the reach

of the statute that far into what has been state territory.

The better course would be to adopt a cautious interpreta-

tion of the FAA, leaving the States with their traditional

authority over the employment relationship until Congress

has more clearly expressed its intent to do otherwise.

Consideration of the relationship between the States and

Congress at the time of the enactment of the FAA in 1925

demonstrates just how odd it would have been for Congress

to have excluded all (and only) transportation workers from

the FAA. Transportation workers were perhaps the only

class of workers over whom Congress had reasonably secure

Commerce Clause jurisdiction in 1925. To construe the stat-

ute as petitioner suggests would be to assume that Congress

wanted to exclude from federal jurisdiction (and thus leave

to the States) employment contracts of workers over whom

it clearly had substantial regulatory authority, while bring-

ing within the scope of federal law (and thus depriving the

States of jurisdiction over) employment contracts of workers

over whom it likely had no authority. This Court has applied

ejusdem generis to avoid a perverse result; it has never

applied that or other maxims to put in place a scheme as

unusual as that suggested by petitioner.

CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted.

13 Since this case involves only state-law claims, affirmance would not

present any question regarding the authority of the States to control the

forum or forums intended by Congress for resolution of federal statutory

claims.

2.

HENRY L. SOLANO

Solicitor

Department of Labor

C. GREGORY STEWART

General Counsel

PHILIP B. SKLOVER

Associate General Counsel

VINCENT J. BLACKWOOD

Associate General Counsel

ROBERT J. GREGORY

Senior

Attorney

Equal Employment

— Commission

SEPTEMBER 2000

31

SETH P. WAXMAN

Solicitor General

BARBARA D. UNDERWOOD

Deputy Solicitor General

JAMES A. FELDMAN

Assistant to the Solicitor

General

APPENDIX

1. Section 1 of Title 9 of the United States Code

provides:

§ 1. “Maritime transactions” and “commerce” de-

fined; exceptions to operation of title

“Maritime transactions”, as herein defined, means charter

parties, bills of lading of water carriers, agreements relating

to wharfage, supplies furnished vessels or repairs to vessels,

collisions, or any other matters in foreign commerce which, if

the subject of controversy, would be embraced within admi-

ralty jurisdiction; “commerce”, as herein defined, means

commerce among the several States or with foreign nations,

or in any Territory of the United States or in the District of

Columbia, or between any such Territory and another, or

between any such Territory and any State or foreign nation,

or between the District of Columbia and any State or Terri-

tory or foreign nation, but nothing herein contained shall

apply to contracts of employment of seamen, railroad em-

ployees, or any other class of workers engaged in foreign or

interstate commerce.

2. Section 2 of Title 9 of the United States Code

provides:

§ 2. Validity, irrevocability, and enforcement of

agreements to arbitrate

A written provision in any maritime transaction or a

contract evidencing a transaction involving commerce to

settle by arbitration a controversy thereafter arising out of

such contract or transaction, or the refusal to perform the

whole or any part thereof, or an agreement in writing to

submit to arbitration an existing controversy arising out of

such a contract, transaction, or refusal, shall be valid,

(la)

2a

irrevocable, and enforceable, save upon such grounds as

exist at law or in equity for the revocation of any contract.