Opposition Brief — Circuit City Stores, Inc. v. Ingle
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} FILED
® MAY 15 2000
No. 99-1648
In The
Supreme Court of the United States
5
CIRCUIT CITY STORES, INC.,
Petitioner,
Vv.
CATHERINE INGLE,
Respondent.
Sd
On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The Ninth Circuit
Sd
BRIEF IN OPPOSITION
MicHaeEL H. Crossy
Counsel of Record
D.F. Garrettson House
2366 Front Street
San Diego, California 92101
(619) 696-7330
NO ‘4
i
TABLE OF CONTENTS
Page
INTRODUCTION TO OPPOSITION.......... 1
NO JURISDICTIONAL AUTHORITY......... 1
FACTUAL BACKGROUND .................. 2
PROCEDURAL HISTORY .................4.. 4
REASONS PETITION FOR WRIT OF CER-
TIORARI SHOULD BE DENIED............. 5
A. THIS CASE IS NOT RIPE FOR SUPREME
COURT DOW EOY occ rcccesieesveccccces 5
B. THIS ISSUE IS NOT RIPE FOR SUPREME
eb gw ls.) gar pan 6
1. PETITIONER HAS OVERSTATED THE
CONFLICT IN THE CIRCUITS SINCE
AT LEAST THREE HAVE NOT YET
STATED DECISIVE POSITIONS ...... 6
2. RECENT SCHOLARLY EXCAVA-
TIONS INTO CONGRESSIONAL
RECORDS (DISCUSSED BY THE
COURTS OF APPEAL IN CRAFT AND
KOVELESKIE) PROVIDE NEW
INSIGHT INTO CONGRESS’S
INTENT AND UNDERSTANDING
WHEN IT ENACTED THE RELEVANT
STATUTORY PROVISIONS; THE
ISSUE SHOULD PERCOLATE IN THE
EADUUU GRPRPB Ds ole cc censtccecdaces 7
3. THERE IS NO FACTUAL AND DOCU-
MENTARY RECORD................. 8
C. THE COURT OF APPEALS’ RULING
DOES NOT INVOLVE INTOLERABLE
RR sigh tne BORA Yen gee eee 9
ii
TABLE OF CONTENTS - Continued
1.
Page
COURTS OF APPEAL SHOULD CON-
STRUE FEDERAL JURISDICTION
NARIIGVER bi ccc ciicdsasciscnsdscce
THE COURT OF APPEAL’S DIS-
MISSAL IN THIS CASE IS NOT NEC-
ESSARILY BASED ON A “BROAD
READING OF THE FAA SECTION
ONE EXCLUSION”................-.
NO PUBLIC POLICY FAVORS MAN-
DATORY ARBITRATION WHEN
IMPOSED AS A CONDITION OF
EMPLOYMENT BECAUSE SUCH
AGREEMENTS ARE UNCONSCION-
ABLE AND UNENFORCEABLE. .....
a. THE DRA IS UNCONSCION-
b. PUBLIC AND PRIVATE AGEN-
CIES HAVE DENOUNCED COM-
PULSORY ARBITRATION OF
EMPLOYMENT DISPUTES.......
D. ADDITIONAL STATUTES INVOLVED;
MISSTATEMENTS OF LAW AND FACT...
1.
CIRCUIT CITY OMITTED ANY REF-
ERENCE TO THE STATUTE CRAFT
RELIED ON, 9 U.S.C. §2 ............
PETITIONER STATES LEGAL AND
FACTUAL ISSUES ARISING FROM
QUESTION 2 INACCURATELY ......
a. THERE IS NO CONFLICT BE-
TWEEN ADAMS AND AHMED..
10
11
11
12
13
13
14
14
ili
TABLE OF CONTENTS - Continued |
Page
b. MR. GILMER WAS NK JT GOV-
ERNED BY A CONTRACT OF
EMPLOYMENT BETWEEN
EMPLOYER AND EMPLOYEE... 16
Mis: EE a pc dcvnnccecaresecisaniedvens 18
iv
TABLE OF AUTHORITIES
Page
CASES
Britton v. Co-Op Banking Group, 916 F.2d 1405 (9th
CO SOE, so hcs vncgansanesd sehbeusecsnenusiseraces 2
Circuit City Stores, Inc. v. Adams, 194 F.3d 1070 (9th
Cir. 1999) (per curiam) ........cccccccccece 5, 9, 14, 15
Circuit City Stores, Inc. v. Ahmed, 195 F.3d 1131 (9th |
Cig. 1555) GOOF CPIM) occ coins cia cisccance 5, 9, 14, 15
Craft v. Campbell Soup Co., 177 F.3d 1083 (9th Cir.
1999) (per curiam)............ceeeees 5, 7, 8, 9, 10, 14
Domino Sugar v. Sugar Workers Local 392, 10 F.3d
BOD. CGR GE: FIP oe 5 0k i oe b's Fee na Ken cbead bones 7
Duffield v. Robertson, Stephens & Co., 144 F.3d 1182
COU GR TPP sins co bic cia cacesecddanacnadens a, 6, i7
Gilmer v. Interstate Johnson/Lane Corp., 500 U.S. 20
GRRE 6 sadn dvd chen boy sis wane enwassaceuenshaaes 10
Great Western Mortgage Corporation v. Peacock, 110
POG Zia COORG COs occ a wend ans ahvarenscdeae ce 7
Healy v0. Ralta, 292 US. 263 C29SE). «oo iw cece ccccces 9
Kokkonen v. Guardian Life Ins. Co. of America, 511
CEE BF SEPP ins deoutessscduleek sea yenrndathavie ex 9
Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361
(7th Cir.), cert. denied, 129 S.Ct. 44 (1999) .......... 8
Matter of Arbitration Between Chung and President
Enterprises, 943 F.2d 225 (2d Cir. 1991)..... Serre 2
McWilliams v. Logicon, Inc., 143 F.3d 573 (10th Cir.
SOUPS ib anda Cuabacncgnsouees dseNOe Ueber hsemEranh ead 7
Michalski v. Circuit City Stores, Inc., 177 F.3d 634
eh Cis HR ea Ba ee ee 17
Vv
TABLE OF AUTHORITIES - Continued
Page
O’Neil v. Hilton Head Hosp., 115 F.3d 272 (4th Cir.
| Rr Rie rE hy ere They Ey Ae Pe eee 7
Perry v. Thomas, 482 U.S. 483 (1987)..............4- 11
Pritzker v. Merrill Lynch, Pierce, Fenner & Smith,
Inc., 7 B34 1116 (Sa Cit. W98S). 2. ces cccccnsccene 7
United Food and Commercial Workers Local 7R v.
Safeway Stores, Inc., 889 F.2d 940 (10th Cir. 1989) ...6, 7
STATUTES AND RULES
California Government Code
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BRIEF IN OPPOSITION TO PETITION ©
FOR WRIT OF CERTIORARI
I. INTRODUCTION TO OPPOSITION
Respondent Catherine Ingle (“Respondent” or “Ms.
Ingle”) opposes the Petition for Writ of Certiorari for the
reasons stated in the Brief in Opposition No. 99-1379,
Circuit City Stores, Inc. v. Saint Clair Adams. Respondent
joins with Mr. Adams in urging this Court that, should
the Petition be granted, certiorari review be limited to the
First Question Presented by Circuit City Stores, Inc.
(“Petitioner” or “Circuit City”).
Ms. Ingle also raises the following distinct reasons
why certiorari should not be granted to review the dis-
missal of Circuit City’s appeal in her case.
Il. NO JURISDICTIONAL AUTHORITY
Ms. Ingle’s lawsuit was brought in federal court. Mr.
Adams and Mr. Ahmed, on the other hand, brought their
lawsuits in state court. The issue of federal court jurisdic-
tion arose in those two cases when Circuit City brought
original petitions to stay state court litigation and compel
arbitration of the disputes. This Petition arises from an
order of the United States District Court, Southern Dis-
trict of California, denying petitioner’s motion to compel
arbitration. Circuit City filed a notice of its intent to
appeal the interlocutory order. Its appeal was dismissed.
The order for which review is sought in this case is
interlocutory, not final. The orders questioned in Adams
and Ahmed are final orders dismissing petitions to compel
arbitration. See Civil Rule 54(b). In Ingle, jurisdiction
never passed from the District Court and remains there
today. See Britton v. Co-Op Banking Group, 916 F.2d 1405,
1412 (9th Cir. 1990). The appellate courts recognize the
jurisdictional distinction. See Matter of Arbitration Between
Chung and President Enterprises, 943 F.2d 225, 227-229 (2d
Cir. 1991).
Due to the absence of finality and District Court’s
uninterrupted jurisdiction over the subject matter, this
Court’s jurisdiction over the matter is questionable, at
best.
II. FACTUAL BACKGROUND
Ms. Ingle applied for the position of sales associate at
Circuit City in September 1996. At the time of applica-
tion, she was given forms and told where to sign. Ingle
was not given an opportunity to read the forms she was
told to sign. She was never offered the opportunity to
“opt-out” of the compulsory arbitration program.?
Ms. Ingle was not shown any dispute resolution
rules; no one in management explained them to her. She
never saw the rules discussed as Petitioner’s Exhibit B at
any time she worked on the job nor was she advised of
any changes in the rules.
Ms. Ingle twisted her back at work helping to trans-
port a wide-screen television in December 1997. Her
1 Due to the absence of an appellate record, the facts
stated are based upon facts stated in the complaint and
declarations of Catherine Ingle and Michael Crosby (and
exhibits to that declaration) filed in support of the opposition to
motion to compel arbitration.
supervisor, whose sexual advances toward Ms. Ingle
approached stalking, was angry that she rejected him.
When Ms. Ingle returned to work in January 1998, she
presented Anderson with a doctor’s written instructions
that her work hours and lifting be limited strictly. Ander-
son, though, assigned her to work up to 60 hours a week,
with heavy lifting. Ms. Ingle reported the harassment to
store manager Eric Gibbs. His statements, actions and
inactions caused far greater damage, so Ms. Ingle
reported the harassment to Circuit City through its “cool-
line” and by contacting its Western Regional Manager. No
one at Circuit City responded to this report by informing
Ms. Ingle of the dispute resolution rules. No one gave her
a claim form to file.
Ms. Ingle retained an attorney, her counsel of record.
Circuit City’s in-house attorney sent a copy of its pur-
ported dispute resolution rules in mid-April 1998. Ms.
Ingle’s counsel contacted the two leading alternative dis-
pute resolution providers in San Diego, J.A.M.S./
Endispute (“J.A.M.S.”) and the American Arbitration
Association (“AAA”). He provided them with copies of
Circuit City’s arbitration agreement and rules. He
inquired whether either firm would administer an arbi-
tration under those rules.
J.A.M.S. cited “Duffield” and “other factors” to
explain its decision not to administer the case. J.A.M.S.
sent its governing policy and rules, “J.A.M.S./Endispute
Policy on Er.ployment Arbitration Minimum Standards
of Procedural Fairness.”
AAA stated firmly that it would arbitrate the Ingle/
Circuit City dispute only if the parties stipulated to be
4
governed by AAA's “National Rules for the Resolution of
Employment Disputes.” In May 1998 and again in July
1999, Ms. Ingle offered to arbitrate under those rules.
Circuit City refuses to do so.
IV. PROCEDURAL HISTORY
Plaintiff filed her Complaint for Sexual Harassment
[California Government Code (“Gov.C.”) § 12940(h)];
Failure to Prevent Sexual Harassment [Gov.C. § 12940(i),
(h)(3)}; Unlawful Employment Discrimination on the
Basis of Gender or Physical Handicap [Gov.C. § 12940(a)];
Retaliation for Protesting Sexual Harassment [Gov.C.
§ 12940(f)]; Failure to Reasonably Accommodate Physical
Handicap [Gov.C. § 12940(k)]; Gender Discrimination and
Harassment [42 U.S.C. § 2000e]; Retaliation for Reporting
Employment Discrimination [42 U.S.C. § 2000e] on June
21, 1999.2 Defendant filed a motion to compel arbitration
on July 16, 1999. The motion was based in part on the
Declaration of Pamela Parsons and Exhibits A and B
thereto. Plaintiff filed her response on August 16, 1999.
The opposition was supported by declarations by Michael
Crosby (with exhibits) and Catherine Ingle. -
The motion was heard and denied by the late Honor-
able Edward J. Schwartz on August 30, 1999. (Transcript
of Hearing, 8/30/99, is Appendix 1.) A written order was
signed on September 21, 1999 and entered September 22,
1999.
2 A prior, more limited version of this complaint (Case No.
99 CV 0181] JFS) was filed on March 3, 1999 and dismissed for
lack of subject matter jurisdiction on May 24, 1999.
5
Defendant filed its notice of appeal on October 5,
1999. Respondent filed her motion to dismiss the appeal
on November 19, 1999. The motion to dismiss was
granted on January 24, 2000.
V. REASONS PETITION FOR WRIT OF CERTIORARI
SHOULD BE DENIED
A. THIS CASE IS NOT RIPE FOR SUPREME
COURT SCRUTINY
This case is not a promising candidate for review
because no ruling by this Court will determine whether
Ms. Ingle’s dispute with Circuit City should be arbitrated.
Judge Schwartz based his district court ruling entirely on
the Ninth Circuit’s opinion in Duffield v. Robertson, Step-
hens & Co., 144 F.3d 1182 (9th Cir. 1998) [employer may
not force employee to arbitrate employment discrimina-
tion claims as a condition of employment]. (See Appendix
B to Petition; Appendix 1, pp. 20-22.) The ruling did not
consider Craft v. Campbell Soup Co., 177 F.3d 1083 (9th Cir.
1999) (per curiam) nor the issues addressed in Circuit City
Stores, Inc. v. Adams, 194 F.3d 1070 (9th Cir. 1999) (per
curiam) and Circuit City Stores, Inc. v. Ahmed, 195 F.3d 1131
(9th Cir. 1999) (per curiam).
Even if this Court were to rule four-square in Circuit
City’s favor, it would only return the parties to the appel-
late court. The parties would have to designate a record,
then brief the materially indistinguishable Duffield deci-
sion as well as Ms. Ingle’s other challenges to enforce-
ment of the “Associate Issue Resolution Program”
(“AIRP”). The ultimate appellate decision will be in Ms.
Ingle’s favor, as Duffield was a Ninth Circuit case. Cer-
tiorari review will prejudice Ms. Ingle by delaying resolu-
tion of her case on the merits without any likelihood that
the ultimate ruling would be to compel arbitration.?
B. THIS ISSUE IS NOT RIPE FOR SUPREME
COURT SCRUTINY
1. PETITIONER HAS OVERSTATED THE
CONFLICT IN THE CIRCUITS SINCE AT
LEAST THREE HAVE NOT YET STATED
DECISIVE POSITIONS
Circuit City represents that “this broad reading of the
FAA Section One exclusion by the Ninth Circuit directly
conflicts with every other federal appellate court.” (Peti-
tion, page 10.) This assertion, however, masks conflicts
within three circuits.
In United Food and Commercial Workers Local 7R v.
Safeway Stores, Inc., 889 F.2d 940, 943-944 (10th Cir. 1989),
the Tenth Circuit held that an employee could not con-
firm and enforce an arbitration award pursuant to the
FAA because the arbitration agreement was part of a
contract of employment. The court recognized that “(t]he
Arbitration Act expressly excludes from its coverage
‘contracts of employment of... any . . . workers engaged
in foreign or interstate commerce.’ 9 U.S.C. § 1 (ellipse in
3 Circuit City would in fact have three separate appellate
occasions to delay justice: the disposition of the issue presented
here; a petition to review a subsequent Ninth Circuit decision
that arbitration may not be compelled; and finally the decision
on the merits of her harassment and discrimination claims.
original).” Nothing indicates that the employee, Cortez,
was engaged in the actual movement of products in com-
merce. The UFCW holding was not addressed in
McWilliams v. Logicon, Inc., 143 F.3d 573 (10th Cir. 1998), a
case cited by Petitioner. That opinion reads the FAA
employment contract exclusion more narrowly.
The Fourth Circuit in Domino Sugar v. Sugar Workers
Local 392, 10 F.3d 1064, 1067-1068 (4th Cir. 1993) noted a
line of its cases that had excluded collective bargaining
agreements, as “contracts of employment,” from the FAA
by force of Section One. Nonetheless, this precedent was
ignored in O'Neil v. Hilton Head Hosp., 115 F.3d 272 (4th
Cir. 1997), and by Petitioner.
The Third Circuit in Pritzker v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 7 F.3d 1110, 1119-1120 (3d Cir. 1993)
stated that “ ‘contracts of employment’ are explicitly
exempted from the FAA.” A panel of the Third Circuit
disavowed this view when it decided Great Western Mort-
gage Corporation v. Peacock, 110 F.3d 222, 226-227 (3rd Cir.
1997) and it was not mentioned by Petitioner.
2. RECENT SCHOLARLY EXCAVATIONS
INTO CONGRESSIONAL RECORDS (DIS-
CUSSED BY THE COURTS OF APPEAL IN
CRAFT AND KOVELESKIE) PROVIDE
NEW INSIGHT INTO CONGRESS’S
INTENT AND UNDERSTANDING WHEN
IT ENACTED THE RELEVANT STATU-
TORY PROVISIONS; THE ISSUE SHOULD
PERCOLATE IN THE LOWER COURTS.
This Court would be better prepared to consider the
issues presented in the Petition if it would allow these
circuits to clarify their respective constructions of Sec-
tions One and Two of the FAA. More specifically, as Mr.
Adams reasoned in his Brief in Opposition, the recent
scholarly research into the history of the FAA has only
been considered by two courts, the Ninth in Craft and the
Seventh in Koveleskie v. SBC Capital Markets, Inc., 167 F.3d
361 (7th Cir.), cert. denied, 129 S.Ct. 44 (1999). Other courts
should be permitted to evaluate the FAA in light of recent
scholarship clarifying Congressional understanding and
intent.
This Court prefers to exercise certiorari review only
after an issue has been permitted to “percolate” through
the lower courts. By allowing this issue to percolate, the
remaining circuits (including those without settled posi-
tions) could then consider the new scholarship discussed
in Mr. Adams’ brief. The perceived conflicts may be
resolved through this process. In any event, further con-
sideration would distill and clarify the issue and focus
this Court’s review.
3. THERE IS NO FACTUAL AND DOCU-
MENTARY RECORD
The texts of the Petition and this Response highlight
the logistical complications review would entail. The
Petition’s footnote 1 concedes the absence of any appel-
late record. Its citation to Rules of the United States
Supreme Court (“Rule”) 16.2 solves nothing. That rule
merely directs this Court to request the record from “the
court” having possession of it. Here, there are two courts
but no record, only documents in files. The absence of an
appellate record is a symptom of the malady: unripeness.
_C. THE COURT OF APPEAL’S RULING DOES
NOT INVOLVE INTOLERABLE ERROR
1. COURTS OF APPEAL SHOULD CON-
STRUE FEDERAL JURISDICTION NAR-
ROWLY.
Circuit City’s petition requests this Court to focus on
the purported deprivation businesses will suffer if they
cannot use 9 U.S.C. § 16 to appeal orders denying
motions to compel their employees to arbitration. How-
ever, the issue is federal jurisdiction - whether original
(as in Adams and Ahmed) or appellate (Ingle).
Federal courts are of limited jurisdiction which can-
not be expanded by judicial decree. Kokkonen v. Guardian
Life Ins. Co. of America, 511 U.S. 375, 377 (1994). In fact, a
matter is presumed to be outside a federal court's jurisdic-
tion; the burden to establish federal jurisdiction falls
upon the party asserting it. Id. For similar reasons, stat-
utes purporting to besti.w federal jurisdiction must be
narrowly construed. See Healy v. Ralta, 292 U.S. 263, 270
(1934).
The Court of Appeal in Craft and its progeny, includ-
ing this case, rules prudently and according to this
Court’s direction when it limits the statutory extension of
federal jurisdiction. Its rulings to construe jurisdiction
under the FAA narrowly, therefore, do not constitute
intolerable error.
10
2. THE COURT OF APPEAL’S DISMISSAL IN
THIS CASE IS NOT NECESSARILY
BASED ON A “BROAD READING OF THE
FAA SECTION ONE EXCLUSION”
Circuit City focuses its petition on the Court of
Appeal’s construction of 9 U.S.C. § 1, the “exclusionary”
provision of the FAA. However, it overlooks the clearly
stated basis for Craft's holding:
“Based on the wording of § 2, the pre-New Deal
understanding of the Commerce Clause, the leg-
islative history of the FAA, and the suggestions
gleaned from [Textile Workers Union v. Lincoln
Mills, 353 U.S. 448 (1957); Gilmer v. Interstate/
Johnson Lane Corp., 500 U.S. 20 (1991); and Allied-
Bruce Terminix Cos. v. Dobson, 513 U.S. 265
(1995)], we hold that the FAA does not apply to
labor or employment contracts. . . . Accordingly,
we have no jurisdiction over Campbell Soup’s
interlocutory appeal and this appeal is hereby
DISMISSED.” Craft, supra, 177 F.3d at 1094,
emphasis added.
Craft is constructed specifically from the “coverage” pro-
vision of the Act, Section Two. The provision enforces
written arbitration provisions “in any maritime transac-
tion or a contract evidencing a transaction involving com-
merce. ...” As Respondent discusses below, Circuit City
chose to omit reference to this statute from its petition.
11
3. NO PUBLIC POLICY FAVORS MANDA-
TORY ARBITRATION WHEN IMPOSED
AS A CONDITION OF EMPLOYMENT
BECAUSE SUCH AGREEMENTS ARE
UNCONSCIONABLE AND UNENFORCE-
ABLE
Petitioner relies heavily on the “strong liberal policy
favoring arbitration.” Congress certainly declared such a
policy when it enacted the FAA. However, that policy
extends only to the ground covered by the statute. The
liberal policy arising from the FAA cannot be used as a
bootstrap to drag uncovered transactions or contracts
into the statute’s coverage zone. See Perry v. Thomas, 482
U.S. 483, 489-490 (1987) [“Section 2, therefore, embodies a
clear federal policy of requiring arbitration unless the
agreement to arbitrate is not part of a contract evidencing
interstate commerce or is revocable ‘upon such grounds
as exist at law or in equity for the revocation of any
contract.’ 9 U.S.C. § 2.”].
a. THE DRA IS UNCONSCIONABLE
Circuit City’s arbitration agreement, known as the
Dispute Resolution Agreement [“DRA”] is unenforce-
able.* Respondent in her District Court memorandum of
points and authorities in opposition to Circuit City’s
motion to compel arbitration identified numerous legal,
factual and policy arguments why arbitration should not
be compelled.
4 Mr. Adams addresses the coverage issue in his Brief in
Opposition, No. 99-1379.
12
Unconscionability is a common ground to revoke a
contract or prove it invalid. The DRA contains so many
limits on its employees’ statutory rights that it is substan-
tively unconscionable.> The manner by which the DRA
was imposed on Ms. Ingle was procedurally unconscion-
able. The uncontroverted facts are that she wasn’t
allowed to read it and the document she saw at hiring in
1996 was different from the 1998 version Circuit City asks
the federal courts to impose on her. A number of the
deficiencies Ms. Ingle identified, particularly the require-
ment to “buy justice” have been held sufficient to invali-
date arbitration agreements.
b. PUBLIC AND PRIVATE AGENCIES
HAVE DENOUNCED COMPULSORY
ARBITRATION OF EMPLOYMENT
DISPUTES
Another indication that public policy disfavors man-
datory arbitration as a condition of employment is that
the Equal Employment Opportunity Commission
(“EEOC”) concluded, in EEOC Policy Notice No. 915:002,
that “[t]he use of unilaterally imposed agreements man-
dating binding arbitration of employment discrimination
5 Respondent identified the following unfair provisions in
her District Court opposition brief: (1) unfair cost to the
employee/claimant; (2) improper time limits on back pay; (3)
improper deductions from back pay; (4) improper time limits on
front pay; (5) cap on punitive damage awards; (6) improper
attorney’s fee provision; (7) shortened statutes of limitation; (8)
limits on discovery; (9) unfair provision to designate arbitrator;
(10) limit on employee’s access to court without limiting the
company; and, of course, (11) no jury trial.
13
disputes as a condition of employment harms both the
individual civil rights claimant and the public interest in
eradicating discrimination.” (Emphasis added.)
Respondent noted in her Brief that AAA and J.A.M.S.
refused to arbitrate the Ingle/Circuit City dispute under
terms of the DRA because as AAA’s attorney wrote,
Circuit City’s DRA did not “substantially and materially
conform their employment plan to the standards of the
Due Process Protocol and the [AAA’s] National Rules for
the Resolution of Employment Disputes.”
D. ADDITIONAL STATUTES INVOLVED; MIS-
STATEMENTS OF LAW AND FACT
Rule of the United States Supreme Court (“Rule”)
15.1 instructs parties opposing certiorari to “address any
perceived misstatements of fact or law set forth in the
petition which have a bearing on the question of what
issues would properly be before the court if certiorari
were granted.” Circuit City has misstated facts and law
that could impact the nature of questions before the
Court.
1. CIRCUIT CITY OMITTED ANY REFER-
ENCE TO THE STATUTE CRAFT RELIED
ON, 9 U.S.C. § 2
Circuit City has correctly identified four statutes
implicated by the issues before the Court. However, it
failed to identify 9 U.S.C. § 2, the “coverage provision” of
the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16
(1994). It is the wording of this provision that the per
14
curiam opinion in Craft v. Campbell Soup Company, 177
F.3d at 1091-1094 relied upon specifically in its holding
that “the FAA does not apply to labor or employment
contracts.” (Id. at p. 1094.)
Section Two reads:
“A written provision in any maritime transac-
tion or a contract evidencing a transaction
involving commerce to settle by arbitration a
controversy thereafter arising out of such con-
tract or transaction, or the refusal to perform the
whole or any part thereof, or any agreement in
writing to submit to arbitration an existing con-
troversy arising out of such a contract, transac-
tion, or refusal, shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at
law or in equity for the revocation of any con-
tract.”
No analysis of the FAA - what it covers and what it
doesn’t - can ignore Section Two.
2. PETITIONER STATES LEGAL AND FAC-
TUAL ISSUES ARISING FROM QUES-
TION 2 INACCURATELY
a. THERE IS NO CONFLICT BETWEEN
ADAMS AND AHMED
Circuit City’s petition in its footnote 3 (page 6) sug-
gests that the holding in Circuit City Stores, Inc. v. Adams,
194 F.3d 1070 (9th Cir. 1999) (per curiam) “appears to be
directly at odds with the Ninth Circuit’s ruling in Circuit
City Stores, Inc. v. Ahmed, 195 F.3d 1131 (9th Cir. 1999) (per
15
curiam).” It further suggests the Ninth Circuit was con-
fused in its understanding of Circuit City’s AIRP, speci-
fically, whether it was compulsory or voluntary. A full
explication of the facts demonstrates that the Ninth Cir-
cuit accurately perceived the legally significant distinc-
tions between the circumstances in Adams and Ahmed.
Circuit City relates at page 7 that its AIRP was imple-
mented in March 1995, that Mr. Ahmed was employed at
that time, and that in April 1995 he received material
giving him the choice to “opt-out” of the AIRP. He did
not do so. (Ahmed, 195 F.3d at 1132.) The Court ruled that
Mr. Ahmed’s receipt of the materials and his decision not
to opt-out constituted an agreement affecting “terms and
conditions of employment,” creating a contract of
employment. (Id.)
Mr. Adams was hired in October 1995, some months
after the AIRP was initiated. The six-page application he
signed included a provision purporting to divert all
claims and disputes to binding arbitration. (Adams, 194
F.3d at 1071.) Unlike Mr. Ahmed and other individuals
employed when AIRP began, Mr. Adams was required to
accept the program as a condition of being employed in
the first place. The Ninth Circuit thus analyzed a differ-
ent fact situation in Adams, finding that Circuit City’s
arbitration agreement itself set forth terms and conditions
of employment, and thus was an employment contract.
(Id.)
As Ms. Ingle argued in her motion to dismiss the
appeal, Adams, not Ahmed, governed her case because she
16
was hired in September 1996. (Circuit City Petition, page
7.)§
b. MR. GILMER WAS NOT GOVERNED
BY A CONTRACT OF EMPLOYMENT
BETWEEN EMPLOYER AND
EMPLOYEE
Circuit City argues that this Court in Gilmer v. Inter-
state/Johnson Lane Corp., 500 U.S. 20, 25 n.2 (1991), held in
effect that an arbitration agreement between employer
and employee, standing alone, was not a contract of
employment in the meaning of 9 U.S.C. § 1. Petitioner
misstates the Court’s reasoning. Justice White’s footnote
reads, in pertinent part:
“The FAA requires that the arbitration clause
being enforced be in writing. See 9 U.S.C. §§ 2,
3. The record before us does not show, and the
parties do not contend, that Gilmer’s employ-
ment agreement with Interstate contained a
written arbitration clause. Rather, the arbitration
clause at issue is in Gilmer’s securities registration
application, which is a contract with the securities
‘exchange, not with Interstate. The lower courts
addressing the issue uniformly have concluded
that the exclusionary clause in § 1 of the FAA is
inapplicable to arbitration clauses contained in
such registration applications. .. . ” (Emphasis
added.)
Petitioner’s contertion that the agreement in this
case is indistinguishable from the U-4 agreement in
6 Should the Court grant certiorari, it need not reach this
issue to decide Question 1.
17
Gilmer is the opposite of Circuit City’s argument below.
Circuit City contended in its District Court papers and at
oral argument that its agreement was materially different
from the U-4. It submitted below that Ingle’s job at Cir-
cuit City was so different from a securities’ broker's that
the Ninth Circuit’s holding concerning the U-4 arbitration
provision in Duffield v. Robertson, Stephens & Co., supra
(see Appendix B to Circuit City’s Petition), did not apply.
(See Appendix 1, p. 8.)
At page 15, the petition misstates the holding in
Michalski v. Circuit City Stores, Inc., 177 F.3d 634 (7th Cir.
1999) by stating the Seventh Circuit did not find “the
agreement to arbitrate to be ‘an employment contract.’ ”
To the contrary, Michalski did not address at all whether
the agreement in question was a “contract[ ] of employ-
ment” within the meaning of 9 U.S.C. § 1.
VI. CONCLUSION
For the foregoing reasons, the petition for writ of
certiorari should be denied. If the petition is granted,
though, review should be limited to the First Question
Presented.
Respectfully submitted,
MicHaet H. Crossy
Counsel of Record
D.F. Garrettson House
2366 Front Street
San Diego, California 92101
(619) 696-7330
ie
App. 1 5 i
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
CATHERINE INGLE,
)
PLAINTIFF ) 99CV1297-S
)
ta ) SAN DIEGO, CALIFORNIA
CIRCUIT CITY, ) AUGUST 30, 1999
) 10:30 A.M.
DEFENDANT.
3 2 9 2 a a a 2 2 a a a a aa
TRANSCRIPT OF MOTIONS HEARING
BEFORE THE HONORABLE EDWARD J. SCHWARTZ
UNITED STATES DISTRICT JUDGE
APPEARANCES:
FOR THE
PLAINTIFF: MICHAEL CROSBY, ESQ. —
| THE GARRETTSON HOUSE
2366 FRONT STREET
SAN DIEGO, CA 92101
FOR THE
DEFENDANT: DAVIS GRIMM & PAYNE
BY: REX DARRELL BERRY, ESQ.
1111 THIRD AVE., STE. 1865
SEATTLE, WA 98101
PAUL PLEVIN & SULLIVAN
BY: RICHARD PAUL, ESQ.
101 WEST BROADWAY, STE. 1330
SAN DIEGO, CA 92101
COURT
REPORTER: ISRAEL VAN BRAMER
(619) 696-0080 —
App. 2
[2] P-R-O-C-E-E-D-I-N-G-S
DEPUTY CLERK: ITEM NUMBER ONE ON
CALENDAR, CIVIL CASE 99-1297, CATHERINE INGLE
VERSUS CIRCUIT CITY ON FOR HEARING DEFEN-
DANT’S MOTION TO COMPEL ARBITRATION.
MR. BERRY: GOOD MORNING, YOUR
HONOR.
I AM REX BERRY OF THE LAW FIRM OF DAVIS,
GRIMM & PAYNE ON BEHALF Of DEFENDANT AND
MOVING PARTY CIRCUIT CITY STORES, INC.
MR. CROSBY: MICHAEL CROSBY APPEAR-
ING ON BEHALF OF CATHERINE INGLE, THE PLAIN-
TIFF.
THE COURT: ALL, RIGHT. MR. BERRY.
MR. BERRY: MAY IT PLEASE THE COURT,
THE PURPOSE OF THIS MOTION THIS MORNING IS
TO COMPEL ARBITRATION OF A DISPUTE BETWEEN
THE PARTIES BASED ON A WRITTEN AGREEMENT OF
THE PARTIES TO ARBITRATE PRECISELY THESE
TYPES OF DISPUTES.
MISS INGLE HAS FILED A LAWSUIT AGAINST
CIRCUIT CIFY CONTRARY TO THE TERMS OF THAT
AGREEMENT. THIS MOTION IS PRESENTED TO YOU
PURSUANT TO THE FEDERAL ARBITRATION ACT TO
COMPEL ARBITRATION OF A D‘SPUTE.
THE F.A.A. MAKES VALID, ENFORCEABLE AND
IRREVOCABLE PRIVATE AGREEMENTS TO SUBMIT
DISPUTES TO ARBITRATION. IT REQUIRES THIS
COURT TO ENFORCE THAT AGREEMENT IN THE
= =
App. 3
SAME MANNER THAT THIS COURT MIGHT ENFORCE
ANY OTHER SORT OF AGREEMENT.
THE FACTS LEADING TO THE OBLIGATION TO
ARBITRATE [3] ARE LARGELY UNDISPUTED BY THE
PARTIES, AT LEAST, THE FACTS THAT WE BELIEVE
REQUIRE ARBITRATION.
IN SEPTEMBER, 1996, MISS INGLE SIGNED THE
CIRCUIT CITY DISPUTE RESOLUTION AGREEMENT
AS PART OF THE JOB APPLICATION PROCESS. THE
AGREEMENT THAT SHE SIGNED STATES THAT THE
PARTIES AGREE TO SETTLE VIA FINAL AND BINDING
ARBITRATION ANY AND ALL EMPLOYMENT-
RELATED LEGAL DISPUTES.
AT THAT TIME, MISS INGLE ALSO EXECUTED
WITH THE DISPUTE RESOLUTION AGREEMENT AN
ACKNOWLEDGMENT THAT SHE WAS RECEIVING
AND THAT SHE WOULD REVIEW THE DISPUTE RESO-
LUTION RULES AND PROCEDURES, THAT IS, THE
RULES THE PARTIES AGREED TO USE FOR PURPOSES
OF THE ARBITRATION.
THE DISPUTE RESOLUTION AGREEMENT STATED
THAT SHE HAD RECEIVED AND WOULD READ THE
DISPUTE RESOLUTION RULES AND PROCEDURES,
OR THAT SHE MUST ASK FOR A COPY OF THEM
PRIOR TO SIGNING THE AGREEMENT IF SHE WASN’T
GIVEN ONE.
AT THAT POINT, MISS INGLE HAD A CHOICE.
SHE HAD A CHOICE WHETHER TO VOLUNTARILY
AGREE TO BINDING ARBITRATION OR ELSE SHE
HAD A THREE-DAY PERIOD AFTER SUBMISSION OF
App. 4
HER APPLICATION WITHIN WHICH SHE COULD
WITHDRAW HER CONSENT TO ARBITRATION, WITH-
DRAW THE APPLICATION, AND PURSUE EMPLOY-
MENT WITH SOME OTHER ELECTRONICS RETAILER.
THE DISPUTE RESOLUTION AGREEMENT
REQUIRES ARBITRATION OF THIS PARTICULAR DIS-
PUTE BASED ON LEGAL CLAIMS BROUGHT BY MISS
INGLE. SHE IS SUING FOR SEXUAL HARASSMENT [4]
ARISING OUT OF HER EMPLOYMENT, EMPLOYMENT
DISCRIMINATION BASED ON GENDER AND HAND-
ICAP, RETALIATION AND FAILURE TO ACCOMMO-
DATE A PHYSICAL DISABILITY.
NOW, CIRCUIT CITY, OF COURSE, DENIES EACH
ONE OF THESE CLAIMS. BUT THE MERITS OF THOSE
CLAIMS ARE TO BE ADDRESSED AND DETERMINED
BY AN UNBIASED ARBITRATOR CHOSEN BY THE
PARTIES WITH EQUAL SELECTION RIGHTS.
AS OF THE PRESENT COUNT, YOUR HONOR, 16
UNITED STATES DISTRICT COURTS AND TWO STATE
COURTS HAVE ENFORCED THE DISPUTE RESOLU-
TION AGREEMENT AND EITHER STAYED OR DIS-
MISSED LITIGATION BROUGHT CONTRARY TO THE
DISPUTE RESOLUTION AGREEMENT; AND THAT
INCLUDES ALL SEVEN CALIFORNIA FEDERAL
COURTS THAT HAVE ADDRESSED THE ISSUE.
IN FACT, EVERY CALIFORNIA FEDERAL COURT
THAT HAS ADDRESSED THE ISSUE HAS ENFORCED
THE DISPUTE RESOLUTION AGREEMENT; ONE TIME
OUT OF THE NORTHERN DISTRICT OF CALIFORNIA,
FOUR TIMES OUT OF THE CENTRAL DISTRICT OF
App. 5
CALIFORNIA AND TWICE OUT OF THE EASTERN DIS-
TRICT OF CALIFORNIA.
NOW, ON FRIDAY AFTERNOON, I BROUGHT TO
THE COURT’S ATTENTION A NEW DECISION THAT
| WE HAVE JUST RECEIVED FROM THE SOUTHERN
DISTRICT OF OHIO, ANOTHER FEDERAL COURT,
ENFORCING THE DISPUTE RESOLUTION AGREE-
MENT AND ADDRESSING VERY - IN A VERY SIMILAR
FASHION MANY OF THE CLAIMS NOW RAISED BY
MISS INGLE.
[5] THIS CASE PRESENTS THE FIRST OPPOR-
TUNITY FOR THE SOUTHERN DISTRICT OF CALIFOR-
NIA TO JOIN THOSE REMAINING CALIFORNIA
DISTRICTS.
IN OPPOSITION, MISS INGLE HAS RAISED A
NUMBER OF ARGUMENTS. THE FIRST SHE RAISED IS
THE CLAIM THAT SHE NEVER SAW THE DISPUTE
RESOLUTION AGREEMENT, DIDN’T READ THE DIS-
PUTE RULES AND PROCEDURES, WHEN, IN FACT,
YOUR HONOR, THE RECORD SHOWS THAT MISS
INGLES SIGNED THE DISPUTE RESOLUTION AGREE-
MENT. IT HAS HER SIGNATURE ON IT.
AND THAT AGREEMENT SAYS, I HAVE RECEIVED
THE DISPUTE RESOLUTION RULES AND PRO-
CEDURES AND I AGREE TO READ THEM, AND IF I
DON’T HAVE THEM, I AGREE TO ASK FOR A COPY OF
THEM BEFORE I SIGN THIS DOCUMENT.
EVEN IF MISS INGLE DID NOT READ THE AGREE-
MENT, THAT FAILURE WILL NOT EXCUSE HER
OBLIGATION TO ARBITRATE. AND THAT’S SET
Beer rey or ean Oe ne
App. 6
FORTH IN THE COHEN VERSUS WEBB BUSH NOBLE &
COOK CASE OUT OF THE NINTH CIRCUIT, WE CITED,
AS WELL AS JUDGE JONES’ RECENT OPINION IN THE
GOLENIA VERSUS BOB BAKER TOYOTA CASE.
MISS INGLE NEXT ARGUES THAT J.A.M.S AND
A.A.A. WILL NOT ENFORCE THE DISPUTE RESOLU-
TION AGREEMENT. AS A PRELIMINARY MATTER, WE
DON’T THINK THERE’S ANY EVIDENTIARY BASIS
FOR THAT OTHER THAN THE HEARSAY STATEMENT
OF COUNSEL, BUT THE FACT IS, THE ASSERTION IS
SIMPLY WRONG.
A.A.A. HAS, IN FACT, PROVIDED ARBITRATORS
FOR 13 [6] SEPARATE ARBITRATIONS UNDER THE
DISPUTE RESOLUTION RULES AND PROCEDURES;
AND THAT’S SET FORTH IN THE DECLARATION OF
MISS PARSONS THAT WE’VE SUBMITTED TO YOU.
J.A.M.S., TO OUR KNOWLEDGE, HAS NEVER
BEEN ASKED TO SUBMIT ARBITRATORS FOR DISPUTE
RESOLUTION.
THE ARGUMENT IN LARGE PART IS IRRELEVANT
IN ANY EVENT, YOUR HONOR, BECAUSE THE DIS-
PUTE RESOLUTION AGREEMENT ALLOWS THE PAR-
TIES TO CHOOSE THEIR OWN ARBITRATOR. IT
DOESN’T HAVE TO BE AN A.A.A. ARBITRATOR. IT
DOESN’T HAVE TO BE A J.A.M.S ARBITRATOR.
THERE IS A DEFAULT VENDOR BY THE NAME OF
RESOLUTE SYSTEMS THAT’S WELL KNOWN
THROUGHOUT THE COUNTRY. BUT EVEN IF THE
App. 7
PARTIES DON’T WANT A RESOLUTE SYSTEMS ARBI-
TRATOR, THEY CAN AGREE TO AN ARBITRATOR
AMONG THEMSELVES.
MISS INGLE NEXT CONTENDS THAT THE FED-
ERAL ARBITRATION ACT DOES NOT APPLY TO
EMPLOYMENT CONTRACTS; AND FOR THAT, SHE
CITES THE NINTH CIRCUIT’S DECISION IN KRAFT
VERSUS CAMPBELL’S SOUP.
AS WE'VE STATED, KRAFT DOESN’T HAVE ANY
APPLICATION TO THIS CASE BECAUSE THE ARBI-
TRATION AGREEMENT IS NOT PART OF AN EMPLOY-
MENT CONTRACT. IT IS A SEPARATE, STAND-ALONE
AGREEMENT EXECUTED AT THE TIME OF HIRE.
IT APPLIES NOT ONLY TO EMPLOYEES. IT
APPLIES TO APPLICANTS. IT APPLIES TO FORMER
EMPLOYEES. SO IT IS NOT PART AND PARCEL OF AN
EMPLOYMENT CONTRACT.
[7] THIS DISTINCTION WAS RECOGNIZED VERY
RECENTLY BY DISTRICT JUDGE STOTLER IN THE
CENTRAL DISTRICT IN THE NODGE DECISION THAT
WE SUBMITTED TO YOU.
MISS INGLE NEXT ARGUES THAT THE NINTH
CIRCUIT’S DECISION IN DUFFIELD WOULD PREVENT
ARBITRATION OF THIS DISPUTE, OR AT LEAST, THE
TITLE SEVEN ASPECTS OF THIS DISPUTE.
SINCE DUFFIELD WAS ISSUED IN MAY OF 1998,
THREE CALIFORNIA DISTRICT COURTS HAVE CON-
TINUED TO UPHOLD THE DISPUTE RESOLUTION
AGREEMENT.
EON Tee er net
App. 8
DUFFIELD’S ONLY APPLICATION CONCEIVABLY
COULD BE TO CLAIMS BROUGHT PURSUANT TO
TITLE SEVEN OF THE CIVIL RIGHTS ACT OF 1964
BECAUSE CALIFORNIA COURTS HAVE STATED THAT
AS FAR AS THE CALIFORNIA ANTI-DISCRIMINATION
STATUTES GO, DUFFIELD HAS NO APPLICATION.
OUR POSITION IS THAT THIS LAWSUIT DOES
NOT GO TO ANY VALID TITLE SEVEN CLAIMS, THAT
THE PLAINTIFF HAS SIMPLY ATTEMPTED TO PLEAD
AROUND, IF YOU WILL, THE RECENT DECISION OF
DISTRICT JUDGE JONES WHICH DISMISSED THOSE
SAME TITLE SEVEN CLAIMS AS BEING PRO-
CEDURALLY FLAWED.
EVEN IF THOSE TITLE SEVEN CLAIMS WERE
VALID, HOWEVER, DUFFIELD STILL WOULD NOT
APPLY IN THIS CASE. THE NINTH CIRCUIT WAS
CLEAR THAT ITS CONCERN IN DUFFIELD WAS OVER
ARBITRATION AGREEMENTS THAT WERE, TO USE
THE COURT’S TERM, “COMPULSORY IN EVERY
SENSE OF THE WORD.”
[8] IN DUFFIELD, THE CONCERN WAS THAT THE
U-4 FORM THAT ALL BROKERS HAVE TO SIGN PRIOR
TO BEING A BROKER IN THE UNITED STATES CON-
TAINS THE ARBITRATION CLAUSE. IF A PROSPEC-
TIVE BROKER DID NOT FILL OUT THAT U-4 FORM
REGISTRATION, THEY COULD NOT BE A BROKER
ANYWHERE IN THE COUNTRY FOR ANY EMPLOYER.
IT WAS TRULY COMPULSORY IN EVERY SENSE OF
THE WORD.
BY CONTRAST, HERE, THE ARBITRATION AGREE-
MENT AT ISSUE IS NOT COMPULSORY IN EVERY
App. 9
SENSE OF THE WORD. MISS INGLE, AS I SAID, HAD A
CHOICE. SHE COULD DECIDE, I DON’T WANT TO BE
PART OF THAT ARBITRATION PROGRAM. THERE-
FORE, I'M GOING TO GO DOWN THE STREET AND
WORK FOR THE GOOD GUYS. I’M GOING TO WORK
FOR SEARS. I'M GOING TO WORK FOR ANOTHER
EMPLOYER THAT DOES NOT REQUIRE THAT.
MISS INGLE THEN CHALLENGES THE ARBITRA-
TION AGREEMENT AS HAVING INADEQUATE SUB-
STANTIVE RIGHTS AND REMEDIES. SHE SAYS THAT
IN ORDER FOR THE DISPUTE RESOLUTION AGREE-
MENT TO BE ENFORCEABLE, THE AGREEMENT
MUST EXACTLY MIRROR THE PROCEDURES OF LITI-
GATION AND HAVE EXACTLY THE SAME REMEDIES.
NO STATE OR FEDERAL CASE SO HOLDS, YOUR
HONOR. IN FACT, THE SUPREME COURT HAS REC-
OGNIZED THAT THERE ARE DIFFERENCES INHER-
ENT BETWEEN ARBITRATION AND LITIGATION IN
TERMS OF THE FORMALITY, THE SPEED AND THE
BINDING - FINAL AND BINDING EFFECT OF THE
PROCESS.
[9] THOSE DIFFERENCES WERE RECOGNIZED
WITH APPROVAL BY THE UNITED STATES SUPREME
COURT IN THE GILMER DECISION AND ALSO IN
WRIGHT.
THE RELEVANT QUESTION, YOUR HONOR, IS
WHETHER A PARTY EFFECTIVELY MAY VINDICATE
HIS OR HER STATUTORY RIGHTS UNDER THE ARBI-
TRATION AGREEMENT. AS LONG AS THOSE ARBI-
TRATION PROCEDURES ARE BASICALLY FAIR AND
App. 10
REASONABLE, THE PARTIES CAN AGREE TO ANY-
THING THEY CHOOSE.
HERE, WE THINK THE DISPUTE RESOLUTION
AGREEMENT MORE THAN MEETS THAT TASK, AND
WE THINK THAT 17 COURTS HAVE AGREED WITH
US.
THE DISPUTE RESOLUTION AGREEMENT WORKS
IN FAVOR OF THE ASSOCIATE IN A NUMBER OF
WAYS. CIRCUIT CITY ADVANCES ALL THE COSTS OF
ARBITRATION SUBJECT TO REALLOCATION BY THE
ARBITRATOR.
AN ASSOCIATE CAN LIMIT HIS OR HER EXPO-
SURE FOR ARBITRATION COSTS TO ONLY THREE
PERCENT OF THEIR MOST RECENT YEARLY INCOME.
THAT IS, IF THE ASSOCIATE MADE $20,000 LAST
YEAR, THEY CAN LIMIT THEIR TOTAL EXPOSURE
FOR FEES RELATED TO ARBITRATION TO $600.
THE ASSOCIATE, IF THEY PREVAIL, THEIR FILING
FEE IS RETURNED TO THEM. THAT DOESN'T HAPPEN
IN COURT.
IF THE ASSOCIATE PREVAILS, EVEN ON A COM-
MON LAW CLAIM, A CLAIM OF SLANDER OR A
CLAIM OF BREACH OF CONTRACT, THEY’RE ENTI-
TLED TO RECOVER THEIR ATTORNEY’S FEES. THAT
IS [10)] SOMETHING NOT AVAILABLE TO THEM IN
COURT AS WELL.
A MUCH LOWER THRESHOLD EXISTS FOR ASSO-
CIATES TO RECOVER THEIR ATTORNEY’S FEES THAN
IS ALLOTTED TO THE EMPLOYER.
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a =i a ina ale a oleae gps oe nares
App. 11
THE STATUTE OF LIMITATIONS IS EXTENDED
FOR THE ASSOCIATE ON CERTAIN CLAIMS SUCH AS
TITLE SEVEN CLAIMS. IT MATCHES THE AVAILABLE
STATUTE OF LIMITATIONS UNDER MANY OF THE
DISCRIMINATION STATUTES IN CALIFORNIA. IT
ALSO MATCHES THE DISCRIMINATION STATUTE OF
LIMITATIONS AVAILABLE UNDER SECTION 1981 IN
CALIFORNIA.
ARBITRATION ALSO REMOVES THE ADMINIS-
TRATIVE HURDLES THAT THE PLALNTIFF HAS TO GO
THROUGH FOR PURPOSES OF BRINGING A TITLE
SEVEN CLAIM. AS THE COURT WELL KNOWS, PRIOR
TO BRINGING A TITLE SEVEN CLAIM, THE PLAIN-
TIFF HAS TO FILE A CHARGE OF DISCRIMINATION
WITH THE E.E.0.C., HAS TO OBTAIN A RIGHT-TO-SUE
LETTER, THEN MAY GO TO COURT.
NONE OF THAT IS REQUIRED UNDER ARBITRA-
TION. AND IN THIS PARTICULAR CASE, IT’S RELE-
VANT BECAUSE IT WAS THE FAILURE TO TIMELY
FILE A CHARGE OF DISCRIMINATION AND RECEIVE
THE RIGHT-TO-SUE LETTER THAT JUDGE JONES
RELIED ON IN DISMISSING MISS INGLE’S TITLE
SEVEN CLAIMS PREVIOUSLY.
NONE OF THOSE HURDLES WOULD BE PRESENT
IN ARBITRATION. MISS INGLES COULD COME RIGHT
INTO ARBITRATION AND ARBITRATE THAT TITLE
SEVEN CLAIM.
THE ASSOCIATE HAS THE ABILITY TO RECOVER
THE FULL [11] ARRAY OF RELIEFS, INJUNCTIVE
RELIEF, BACK-PAY, FRONT-PAY, COMPENSATORY
App. 12
DAMAGES WITHOUT LIMIT, PUNITIVE DAMAGES
WITH SOME LIMITS, AND ATTORNEY’S FEES.
BOTH DISTRICT JUDGE LEGGE OUT OF THE
NORTHERN DISTRICT AND DISTRICT JUDGE LEVI
OUT OF THE EASTERN FOUND THE DAMAGE PROVI-
SION OF THE DISPUTE RESOLUTION AGREEMENT TO
BE ADEQUATE AND ENFORCEABLE.
ANY REMAINING ISSUES OF UNFAIRNESS OF
THE PROCEDURES OR REMEDIES WE SUBMIT
WOULD BE PROPERLY SUBMITTED TO THE ARBITRA-
TOR, AND NOT TO THIS COURT.
THE PARTIES ARE MUTUALLY BOUND TO ARBI-
TRATE THE ASSOCIATE’S CLAIMS AND HAVE AGREE
TO BE BOUND BY THAT DECISION.
IN ESSENCE, MISS INGLE ADMITS SHE SIGNED
THE DISPUTE RESOLUTION AGREEMENT. SHE
DOESN'T DISPUTE THAT THIS IS AN EMPLOYMENT-
RELATED LEGAL DISPUTE. THERE IS NO LEGAL NOR
FACTUAL BASIS WHICH EXISTS PRECLUDING
ENFORCEMENT OF THE PARTY’S AGREEMENT.
AND THUS, THIS COURT SHOULD DISMISS OR
STAY THE LAWSUIT BEFORE IT AND COMPEL THE
PARTIES TO ARBITRATE THIS DISPUTE.
THANK YOU, YOUR HONOR.
THE COURT: THANK YOU.
ALL RIGHT. MR. CROSBY.
MR. CROSBY: THANK YOU, YOUR HONOR.
App. 13
[12] I'M GOING TO TRY TO FOCUS ON THE ISSUES
NOT DISCUSSED THOROUGHLY IN THE BRIEFS OR
BOUGHT UP IN REPLY OR HERE TODAY.
BUT FIRST, I'D LIKE TO FOCUS THE COURT ON
WHAT REALLY IS AT ISSUE HERE, AND THAT IS
WHAT CONGRESS INTENDED WITH RESPECT TO THE
COMPULSORY ARBITRATION OF TITLE SEVEN AND
STATE STATUTORY DISCRIMINATION ACTIONS.
AND IT SAID WHAT IT THOUGHT THROUGH A
COMMITTEE TO THE HOUSE LABOR & EDUCATION
COMMITTEE. AND THAT STATED, AND IT’S QUOTE -
IT’S QUOTED IN DUFFIELD AT PAGE 1196: “AMERI-
CAN WORKERS SHOULD NOT BE FORCED TO
CHOOSE BETWEEN THEIR JOBS AND THEIR CIVIL
RIGHTS.” AND THAT’S THE KEY ISSUE HERE TODAY.
WHAT THE CONGRESS INTENDS, THAT WAS THE
FOCUS OF THE DUFFIELD CASE. AND IT CLEARLY
CONCLUDED - AND THE NINTH C:RCUIT IS CLEAR
ON THIS - THAT AN EMPLOYEE CANNOT BE COM-
PELLED AT THE OUTSET AS A CONDITION OF
EMPLOYMENT TO ARBITRATE DISPUTES THAT MAY
ARISE IN THE FUTURE, DISPUTES RELATING TO
TITLE SEVEN OR D.F.E.H. CLAIMS.
IN THAT RESPECT, YOUR HONOR, THE DEFENSE
HAS ARGUED THAT D.F.E.H. CLAIMS, F.E.H.A.
CLAIMS ARE NOT SUBJECT TO ARBITRATION, AT
LEAST, NOT COMPELLED BY THE DUFFIELD CASE.
THAT IS NOT WHAT DUFFIELD SAYS.
App. 14
IT SAYS JUST THE OPPOSITE. IT SAYS THAT THE
NINTH CIRCUIT HAS SAID, BOTH IN THE PRUDEN-
TIAL VERSUS LAI CASE AND [13] IN DUFFIELD THAT
CONGRESS HAS MADE - HAS STATED IN TITLE
SEVEN THAT STATE DISCRIMINATION STATUTES
SUCH AS F.E.H.A. ARE INCORPORATED AS PART OF
THE MECHANISM ANTICIPATED BY CONGRESS
BACK IN 1964 FOR THE RESOLUTION OF DISPUTES
ARISING FROM CIVIL RIGHTS, FROM EMPLOYMENT
DISCRIMINATION; AND IN TWO PLACES IN THE
DUFFIELD CASE, INCLUDING AT THE VERY END OF
THE CASE, ON PAGE 1203, THAT D.F.E.H. CLAIMS AS
WELL AS TITLE SEVEN CLAIMS ARE NOT SUBJECT TO
COMPULSORY ARBITRATION.
I’D LIKE TO FOCUS ON SOME UNDISPUTED
FACTS HERE, FACTS THAT HAVE NOT BEEN CON-
TRAVENED BY CIRCUIT CITY: ONE, THAT CAT-
HERINE INGLE WAS PREVENTED FROM READING
THE AGREEMENT.
THAT WAS STATED IN HER DECLARATION. IT’S
WHAT SHE'LL SAY IN HER DEPOSITION. AND THAT
MEANS THAT THERE WAS NOT A KNOWING WAIVER
UNDER THE STAINNDARDS OF THE NINTH CIRCUIT
SET FORTH IN CASES LIKE PRUDENTIAL VERSUS LAI.
SECOND, AND THIS IS EXTREMELY IMPORTANT
AND I WILL ADMIT, I DID NOT ADDRESS IT
DIRECTLY IN THE BRIEF. INGLE NEVER RECEIVED
NOTICE THAT THERE WAS A CHANGE OF THE
RULES. SHE SIGNED THEIR EXHIBIT A. BUT SHE
NEVER SAW OR SIGNED OR COULD HAVE SEEN OR
App. 15
SIGNED EXHIBIT B BECAUSE IT WAS NOT IN EXIS-
TENCE WHEN SHE WAS HIRED AND WHEN SHE
SIGNED THIS.
EXHIBIT B, AS I SAID, THEY’RE SLIPPING THIS IN
HERE AS IF IT’S PART OF THE CASE. IT IS NOT.
EXHIBIT A THAT SHE SIGNED, THE APPLICATION,
SAID THAT WE MAY CHANGE OUR RULES IN [14]
THE FUTURE UPON 30 DAYS NOTICE.
THERE IS NO EVIDENCE, YOUR HONOR, IN THE
RECORD THAT THEY EVER GAVE 30 DAYS NOTICE TO
ANYONE, MUCH LESS MISS INGLE, OR ANYONE IN
THE STORE IN WHICH SHE WORKED.
SO THEIR ENTIRE MOTION TO COMPEL FALLS
ON THAT EVEN IF THE COURT WERE GOING TO
CONSIDER IT ON OTHER GROUNDS, BECAUSE THE
RULES DO NOT GO INTO EFFECT ACCORDING TO
THEIR OWN CONTENT.
THIRD, THIS WAS RAISED IN A NUMBER OF THE
CASES, AND I DON’T THINK THAT THE COURT IS
GOING TO RECOGNIZE CIRCUIT CITY’S REPRESEN-
TATION OF 17 ORDERS OR EVEN THE ORDERS THAT
ARE BEFORE THE COURT. I THINK THOSE ARE OUT
OF CONTEXT AND I’VE STATED WHY I DON’T THINK
THEY SHOULD BE CONSIDERED.
AND I'VE ALSO POINTED OUT AND I THINK IT’S
OBVIOUS, WE DON’T KNOW HOW MANY COURTS
HAVE NOT ENFORCED CIRCUIT CITY’S AGREEMENT.
THEY HAD AN OPPORTUNITY TO TELL US IN THE
App. 16
DECLARATION OF PARSONS, IN THE SUPPLEMEN-
TAL DECLARATION OF PARSONS, OR SOME DECLA-
RATION OF MR. BERRY OR SOME DECLARATION OF
IN-HOUSE COUNSEL, MR. HOSEY OR SOMEONE
ELSE. WE HAW™N’T SEEN THAT.
WE KNOW THAT THE DERRICKSON CASE RULED
AGAINST IT. THERE’S A CASE HERE IN THIS COURT
IN THE SOUTHERN DISTRICT THAT HAS RULED
AGAINST IT AND THEY HAVE CALLED - IT’S ALSO
AGAINST CIRCUIT CITY, JEANNIE KOONS VERSUS
CIRCUIT CITY. I'M NOT SURE OF ITS CURRENT STA-
TUS BUT I KNOW THAT THE INITIAL [15] TWO RUL-
INGS WERE NOT TO ENFORCE.
BUT THE POINT IS THIS: THE COURT CANNOT
RELY ON SORT OF A PIG-IN-THE-POKE KIND OF
ARGUMENT LIKE TriAT.
IN THOSE CASES THOUGH, MANY OF THEM
RELIED UPON THE OPPORTUNITY OF THE
EMPLOYEE TO OPT OUT OF THE PROGRAM. MISS
INGLE DID NOT EVER HAVE THAT OPPORTUNITY.
A COUPLE OF OTHER THINGS, THE A.A.A. ISSUE
THAT WAS RAISED, I THINK THAT THE MOST REA-
SONABLE CONCLUSION, YOUR HONOR, BASED
UPON A.A.A.’S POSITION IN THIS CASE IS THAT THE
CASES THAT IT’S ARBITRATED WERE BEFORE A.A.A.
ISSUED ITS RULES SO THEY WOULD ONLY ADMINIS-
TER UNDER THE DUE PROCESS PROTOCOL THAT’S
BEEN PROVIDED WITH THE PAPERS.
I REALLY - I KNOW THAT THE ONE HERE
LOOKED AT CIRCUIT CITY’S RULES AND SAID, NO,
App. 17
IT’S INSUFFICIENT. THEY ARE INSUFFICIENT DUE
PROCESS GUIDELINES.
ONE CASE THAT’S FAIRLY IMPORTANT, A NINTH
CIRCUIT CASE, AGAIN, THAT HASN’T BEEN DEALT
WITH, THE GRAHAM OIL. THAT STATES, FOR EXAM-
PLE, TRUNCATING THE STATUTE OF LIMITATIONS -
WHICH I UNDERSTAND THEY CLAIM IT DOES NOT
DO, BUT THEY’RE INCORRECT.
IT STATES THAT THAT’S ENOUGH TO END THE
INQUIRY. THERE ARE JUST ANY NUMBER OF DEFI-
CIENCIES OUTLINED IN THE BRIEF THAT I BELIEVE
IN AND OF THEMSELVES ARE ENOUGH FOR THE
CASE NOT TO BE ARBITRATED, TO FORCE ARBITRA-
TION.
THE CLEAREST ONES ARE THE COST. THE FACT
IS, MISS [16] INGLE DOES NOT HAVE TO PAY TO
COME HERE. SHE DOES HAVE TO PAY IF SHE FOL-
LOWS CIRCUIT CITY’S RULES, IF SHE ARBITRATES
UNDER CIRCUIT CITY’S RULES. AND THAT’S A REAL,
REAL IMPORTANT DISTINCTION.
THE CASES PALADINO, COLE, SHANKEL, I
THINK ARE LOOKING AT IT THE RIGHT WAY. THIS IS
CHECK - THEY’RE TALKING CHECKBOOK JUSTICE.
THEY CLAIM THEIR PEOPLE HAVE TO BE WILLING
TO PAY MAYBE A LITTLE, MAYBE A LOT, BUT HAVE
TO BE WILLING TO PAY WAY BEYOND A FILING FEE
TO GET JUSTICE. AND I DON’T KNOW HOW TO DEAL
WITH THAT OTHER THAN SAYING, THAT’S NOT THE
AMERICAN WAY.
App. 18
1 THINK THAT IT’S IMPORTANT EVERY COUPLE
OF MINUTES IN THIS CASE TO GO BACK TO THE BIG
PICTURE; THAT IS TWO THINGS. THEY’RE MAKING A
PERSON, A FORMER CHILIES WAITRESS WHO GETS A
GOOD JOB AS A SALESPERSON AT CIRCUIT CITY -
THEY’RE MAKING HER PAY FOR JUSTICE. IF SHE
CAN’T PAY, NO JUSTICE.
SECOND, THEY WANT THE RIGHT TO WITH-
DRAW FROM THE AMERICAN SYSTEM OF JUSTICE:
JUST PULL OURSELVES OUT. THEY DON’T WANT TO
WORK FOR US, OKAY. BUT IF SOMEBODY ’S GOING TO
WORK FOR US, THEY’RE GOING TO WORK UNDER
SOME OTHER SYSTEM OF JUSTICE.
I THINK THAT THE IMPACT OF THAT IS INESTIM-
ABLE. AND THAT’S WHY I’M RATHER - I REMAIN
SURPRISED THE COURT’S HAVE TAKEN A DIFFER-
ENT POSITION, BUT I THINK THAT IN THE [17]
NINTH CIRCUIT, WE CANNOT TAKE THAT POSITION.
THE NINTH CIRCUIT HAS NOT TAKEN THAT POSI-
TION.
SOME ISSUES RAISED BY MR. BERRY IN HIS ABLE
PRESENTATION, I THINK THAT KRAFT, A NINTH CIR-
CUIT EN BANC DECISION - EXCUSE ME - PER CUR-
IAM DECISION, THEY DECLINED TO SEND IT EN
BANC - RELATES TO EMPLOYMENT CONTRACTS.
OBVIOUSLY, THIS IS PART OF AN EMPLOYMENT
CONTRACT.
THE LITTLE GLITCH OR CATCH HERE IS THAT IT
MAY BE ONE THAT’S TERMINABLE AT THE WILL OF
THE PARTIES. BUT A TERMINABLE, AT-WILL CON-
TRACT IS A CONTRACT.
App. 19
AND KRAFT STATES THAT THE FEDERAL ARBI-
TRATION ACT DOES NOT APPLY TO EMPLOYMENT
CONTRACTS, FLAT-OUT DOESN’T APPLY. THEY SAID
THEY’RE COMING HERE UNDER F.A.A., AND UNDER
THE NINTH CIRCUIT RULING IN KRAFT, THEY’RE
OUT.
I THINK I HAVE DEALT WITH THE ISSUE OF THE
SUBSTANTIVE RULES AND WON’T GO INTO THEM
AGAIN.
WITH RESPECT TO DUFFIELD, THERE IS ABSO-
LUTELY NOTHING IN DUFFIELD THAT INDICATES
THAT IT ONLY APPLIES TO THE U-4 AGREEMENT.
DUFFIELD’S HOLDING ON THE FACTS ARE THAT U-4
IS NOT ENFORCEABLE BECAUSE IT REQUIRES THE
ARBITRATION OF TITLE SEVEN AND D.F.E.H.
CLAIMS. THAT’S THE REASON THAT IT’S UNENFOR-
CEABLE, NOT BECAUSE IT GOES TO LICENSURE,
ALTHOUGH CERTAINLY, THAT IS DISCUSSED.
THE COURT: WHAT ABOUT THE CONTEN-
TION THAT DUFFIELD IS RESTRICTED TO A SITUA-
TION, WHEREAS IN THAT CASE, IT [18] APPLIES
UNIVERSALLY TO ALL PROSPECTIVE EMPLOYEES?
MR. CROSBY: I THINK THAT - I THINK THAT
IF YOU WERE TO TAKE THE POSITION THAT THAT’S
ALL THAT DUFFIELD APPLIES TO, I THINK YOU
HAVE TO STEP BACK FOR A SECOND AND LOOK.
THE FOCUS OF THE DUFFIELD IS NOT THE U-4.
THE FOCUS OF DUFFIELD IS THE LEGISLATIVE HIS-
TORY OF THE 1991 CIVIL RIGHTS ACT AMEND-
MENTS. AND THE 1991 CIVIL RIGHTS ACT
App. 20
AMENDMENTS, PARTICULARLY, SECTION 118, THEY
DON’T SAY THAT THEY APPLY ONLY TO THE SECU-
RITIES INDUSTRY OR ONLY TO INDUSTRIES WHICH
REQUIRE LICENSURE OR ONLY INDUSTRIES WHERE
YOU CAN’T GO TO SOME OTHER CASE.
SO THE FOCUS ON THE PARTICULAR FACTS OF
DUFFIELD IS MISPLACED. THE PROPER FOCUS IS ON:
WHAT DID CONGRESS INTEND? AND CONGRESS
INTENDED THAT NO EMPLOYEE SHOULD HAVE TO
WAIVE THEIR CIVIL RIGHTS TO GET A JOB. THEY
STATED THAT.
THE COURT: THANK YOU.
MR. CROSBY: THANK YOU.
THE COURT: ANYTHING FURTHER, BRIEFLY,
MR. BERRY?
MR. BERRY: ONLY IF THERE SPECIFIC QUES-
TIONS THAT THE COURT HAS.
THE ONLY OBSERVATION THAT I WOULD MAKE,
YOUR HONOR, SIMPLY COMES FROM THE LAN-
GUAGE OF THE AGREEMENT THAT WAS SIGNED BY
MISS INGLE.
IT SAYS, “INCLUDED WITH THIS APPLICATION IS
THE [19] CIRCUIT CITY DISPUTE RESOLUTION RULES
AND PROCEDURES. YOU SHOULD FAMILIARIZE
YOURSELF WITH THESE RULES AND PROCEDURES
PRIOR TO SIGNING THIS AGREEMENT.
“IF THE RULES AND PROCEDURES ARE NOT
INCLUDED IN THIS BOOKLET, YOU MUST REQUEST
App. 21
A COPY FROM A CIRCUIT CITY REPRESENTATIVE
PRIOR TO SIGNING THE AGREEMENT.
“YOU WILL NOTE THAT IF YOU SIGN AT THIS
TIME, YOU DO HAVE THREE DAYS TO WITHDRAW
YOUR CONSENT. YOU MAY, OF COURSE, TAKE THE
PACKAGE WITH YOU AND RETURN IT SIGNED IF
YOU WISH TO CONTINUE THE PROCESS.”
AND THEN DIRECTLY ABOVE HER SIGNATURE,
“I HAVE READ THIS AGREEMENT AND I UNDER-
STAND THAT I SHOULD READ THE DISPUTE RESO-
LUTION RULES AND PROCEDURES OVER THE NEXT
FEW DAYS.”
MISS INGLE, AS I SAID, HAD A CHOICE. SHE
AGREED TO ARBITRATE. AND WE’RE ASKING THE
COURT TO ENFORCE THAT AGREEMENT OF THE
PARTIES.
THANK YOU.
THE COURT: THANK YOU.
WELL, IN THIS CASE, THE DEFENDANT, CIRCUIT
CITY, HAS FILED A MOTION TO COMPEL ARBITRA-
TION OF THE PLAINTIFF’S CLAIMS UNDER THE FED-
ERAL ARBITRATION AGREEMENT.
OF COURSE, THIS IS A SUBJECT THAT’S BEEN
THE FOCUS OF A GOOD MANY COURT DECISIONS IN
VARIOUS JURISDICTIONS. WE HAVE HAD DISTRICT
COURTS RULE ON IT.
[20] BUT I THINK IN THE NINTH CIRCUIT, WE
NOW HAVE THE CASE OF DUFFIELD VERSUS
ROBERTSON STEVENS & COMPANY, WHICH IS 144
App. 22
FED 3D 1182, IN WHICH THE COURT HELD THAT AN
EMPLOYER MAY NOT CONDITION EMPLOYMENT ON
A WAIVER OF JUDICIAL REMEDIES UNDER TITLE
SEVEN.
IN THIS CASE, WHEN ONE EXAMINES THE
EMPLOYMENT APPLICATION, ONE FINDS IN PARA-
GRAPH TWO THEREOF THE FOLLOWING LAN-
GUAGE: “THIS AGREEMENT REQUIRES YOU TO
ARBITRATE. CERTAIN LEGAL DISPUTES RELATED TO
YOUR APPLICATION FOR EMPLOYMENT OR
EMPLOYMENT WITH CIRCUIT CITY.”
NOW, I THINK IF IT HAD STOPPED THERE,
THERE WOULD BE NO PROBLEM IN THIS CASE. BUT
PARAGRAPH TWO OF THE EMPLOYMENT APPLICA-
TION GOES ON, “CIRCUIT CITY WILL NOT CONSIDER
YOUR APPLICATION UNLESS THIS AGREEMENT IS
SIGNED.”
NOW, THAT PLACES A PROSPECTIVE EMPLOYEE
IN A RATHER DIFFICULT SITUATION. IF HE WANTS A
JOB, IT MAY BE A JOB THAT’S PARTICULARLY FAVOR-
ABLE TO HIS SITUATION AND HIS QUALIFICATIONS,
HE’S GOT TO, AS A COMPULSORY MATTER, AGREE
TO WAIVE HIS RIGHT TO ORDINARY LITIGATION
AND TO GO BEFORE AN ARBITRATOR WITH CER-
TAIN PROBLEMS THAT EXIST IN AN ARBITRATION
SITUATION AS DISTINGUISHED FROM A PROCEED-
ING IN A FEDERAL COURT.
DUFFIELD DID INVOLVE A COMPULSORY ARBI-
TRATION AGREEMENT WHICH CONDITIONED
EMPLOYMENT ON THE WAIVER OF THE RIGHT TO
a
App. 23
LITIGATE FUTUR! EMPLOYMENT-RELATED DIS-
PUTES.
[21] IN THIS CASE, THE DEFENDANT IS RELYING
ON THE DISPUTE RESOLUTION AGREEMENT THAT
THE PLAINTIFF SIGNED AS PART OF HER APPLICA-
TION FOR EMPLOYMENT WHICH STATES THAT ANY
FUTURE CLAIMS MUST BE ARBITRATED.
THE EMPLOYMENT APPLICATION, AS I HAVE
INDICATED, EXPLICITLY STATED, PLAINTIFF WOULD
NOT BE CONSIDERED FOR THE JOB UNLESS SHE
SIGNED THE D.R.A.
I THINK THIS IS A COMPULSORY ARBITRATION
AGREEMENT WITHIN THE DEFINITION OF DUF-
FIELD.
IF ONE EXAMINES THE DUFFIELD DECISION AT
PAGE 1199, THE FOLLOWING LANGUAGE APPEARS:
“IN VIEW OF THE FACT THAT THE CONTEXT, LAN-
GUAGE AND LEGISLATIVE HISTORY OF THE 1991
ACT, TOGETHER, MAKE OUT A CONCLUSIVE CASE
THAT CONGRESS INTENDED TO PRECLUDE COM-
PULSORY ARBITRATION OF TITLE SEVEN CLAIMS,
WE THINK IT INESCAPABLE THAT FORM U-4 IS
UNENFORCEABLE AS APPLIED TO SUCH CLAIMS.
“FORM U-4 COMPELS PRECISELY WHAT CON-
GRESS INTENDED TO PROHIBIT IN THE 1981 ACT,
MANDATORY REQUIREMENTS UNDER WHICH PRO-
SPECTIVE EMPLOYEES AGREE, AS A CONDITION OF
EMPLOYMENT, TO SURRENDER THEIR RIGHTS TO
LITIGATE FUTURE TITLE SEVEN CLAIMS IN A JUDI-
CIAL FORUM AND ACCEPT ARBITRATION INSTEAD.”
App. 24
I THINK THAT IS THE VICE OF THE SITUATION
THAT WE HAVE BEFORE US, THAT THIS WAS NOT
SOMETHING THAT A PROSPECTIVE EMPLOYEE
COULD EITHER AGREE TO OR WALK AWAY [22]
FROM.
UNDER THE CIRCUMSTANCES, I THINK IT
PLACED UPON A PROSPECTIVE EMPLOYEE, WHO
PROBABLY SORELY WANTS THE JOB, A DECISION TO
EITHER AGREE WILLY-NILLY, RELUCTANTLY, OR TO
SIMPLY LAY DOWN AND ACCEPT A COMPULSORY
ARBITRATION PROVISION.
ACCORDINGLY, THE MOTION BY THE DEFEN-
DANT IS DENIED.
MR. CROSBY, WILL YOU PREPARE AN APPROPRI-
ATE ORDER AND SUBMIT IT TO OPPOSING COUNSEL
FOR APPROVAL AS TO FORM?
MR. CROSBY: I WILL, YOUR HONOR. THANK
YOU.
MR. BERRY: THANK YOU, YOUR HONOR.
WOULD THE COURT BE WILLING TO HEAR JUST
ONE MORE POINT?
THE COURT: WELL, ONE MORE POINT.
HOW LONG A POINT IS IT?
MR. BERRY: IT WILL BE BRIEF.
THE COURT: ALL RIGHT.
MR. BERRY: I WOULD LIKE THE COURT TO
CONSIDER THE APPLICATION OF DUFFIELD ONLY
TO THE TITLE SEVEN CLAIM AS OPPOSED TO THE
App. 25
REMAINING CLAIMS IN THE LAWSUIT. I THINK THE
CALIFORNIA COURTS HAVE BEEN VERY CLEAR
THAT THEY DON’T AGREE THAT DUFFIELD HAS
ANY APPLICATION TO F.E.H.A. CLAIMS BROUGHT
UNDER CALIFORNIA LAW.
THE COURT: WELL, I DON’T THINK THAT IS
A NECESSARY [23] RESULT OF DUFFIELD, AND I
DON’T THINK THE POSITIONS OF THE CALIFORNIA
COURTS ARE BINDING ON THIS COURT.
THANK YOU.
MR. BERRY: THANK YOU, YOUR HONOR.
MR. CROSBY: THANK YOU, YOUR HONOR.
THE COURT: INCIDENTLY, COUNSEL, HAVE
THERE BEEN SETTLEMENT NEGOTIATIONS IN THIS
MATTER? ton
MR. BERRY: THERE HAVE NOT, YOUR
HONOR.
THE COURT: LET’S SEE, WHO IS THE MAGIS-
TRATE JUDGE?
MR. CROSBY: JUDGE STIVEN.
THE COURT: JUDGE STIVEN. I THINK IT
MIGHT NOT BE AMISS FOR YOU, SINCE YOU’RE
BOTH HERE, TO STOP DOWN AT JUDGE STIVEN’S
CHAMBERS AND SEE IF YOU CAN’T ARRANGE A
SETTLEMENT NEGOTIATION WITH HIM.
—_
MR. BERRY: THANK YOU, YOUR HONOR.
MR. CROSBY: THANK YOU.
App. 26
aa * a
(HEARING RECESSED AT 11:05 A.M.)
REPORTER’S CERTIFICATE
I, ISRAEL VAN BRAMER, CERTIFY THAT THE
FOREGOING IS THE OFFICIAL TRANSCRIPT OF THE
PROCEEDINGS IN THE ABOVE-ENTITLED MATTER;
AND THAT IT IS COMPLETE AND ACCURATE, TO
THE REST OF MY KNOWLEDGE AND ABILITY.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.