Petition for Writ of Certiorari — Goldman, Sachs & Co. v. Utley
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0) 829-8020 _—
IN THE eee JOBEPH F. SPANIOL, JR,
Supreme Court of the Hunitenyy
eT CLERIC
OCTOBER TERM, 1989
GOLDMAN, SACHS & CO.,
GOLDMAN SACHS MONEY MARKETS INC.,
DAVID B. FORD and FRANCIS J. GAUL, JR.,
Petitioners,
—against—
KRISTINE M. UTLEY,
Respondent.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
JOHN F. CANNON
Counsel of Record for Petitioners
125 Broad Street
New York, New York 10004
(212) 558-4000
THEODORE QO. ROGERS, JR.
THEODORE EDELMAN
GEOFFREY POTTER
SULLIVAN & CROMWELL
New York, New York
DouGLAS F. SEAVER
STEWART A. BRODER
GASTON & SNOW
Boston, Massachusetts
Of Counsel
November 21, 1989
QUESTION PRESENTED
Whether or not, upon petitioners’ timely motion under
the Federal Arbitration Act, 9 U.S.C. § 1 ef seq., respond-
ent should have been required, before proceeding further
under Title VII of the Civil Rights Act of 1964, as amended,
42 U.S.C. § 2000e et seqg., to submit her employment dis-
crimination claim to New York Stock Exchange arbitration
pursuant to the agreement to arbitrate all controversies
arising out of her employment or the termination of her
employment, which she entered into when she registered
with the Exchange as a General Securities Representative
of petitioners.
ii
STATEMENT PURSUANT TO RULE 28.1
The parent company of petitioner Goldman Sachs Money
Markets Inc. is GSMMI Holdings Inc., which is wholly
owned by petitioner Goldman, Sachs & Co. (“Goldman
Sachs”). The parents of Goldman Sachs are Goldman
Sachs Group, L.P., a general partner of Goldman Sachs,
and Sumitomo Bank Capital Markets, Inc., which is an
affiliate of Sumitomo Bank and a limited partner of
Goldman Sachs.
ill
TABLE OF CONTENTS
PAGE
os __ i
STATEMENT PURSUANT TO RULE 28.1 .... ii
TABLE OF AUTHORITIES ................ Vv
cock 6k b 6 sebleeneuee's 2
Te ee eae e awe 2
STATUTORY PROVISIONS INVOLVED ..... 3
STATEMENT OF THE CASE .............. 3
REASONS FOR GRANTING THE WRIT ..... 8
I. The Court Should Grant Certiorari To Correct
The Misapprehension That Congress Intended
To Preclude Arbitration Of Title VII Claims,
Even In The First Instance, Pursuant To An
Individually-Accepted Agreement To Arbitrate
Such Claims Under The FAA. ............. 10
II. The Court Should Grant Certiorari In Order To
Correct The Misapplication Of This Court’s
Labor Arbitration Decisions And To Clarify
The Distinction Between Those Decisions And
The Court's Determinations Under The FAA. 15
ES bx a GR nA Da4 eR hes eseseceenes 21
iv
PAGE
APPENDIX A (Opinion of the Court of Appeals for
ee NN i I Sadie cu bk anc Al
APPENDIX B (Memorandum and Order of the
United States District Court for the District of
PE cis ook nes acaceuneahccc. Bl
APPENDIX C (Judgment of the Court of Appeals for
ee I iia ee ne he ee nee Cl
APPENDIX D (Statutory Provisions Involved) ... . D1
TABLE OF AUTHORITIES
PAGE
Cases:
Alexander v. Gardner-Denver Co., 415 U.S. 36
CD: cdusteteukhe kt Cause Can eeke hae passim
Alford v. Dean Witter Reynolds, Inc., 712 F. Supp.
oe eS errr rrr ee 19
Arnulfo P. Sulit, Inc. v. Dean Witter Reynolds, Inc.,
847 F.2d 475 (8th Cir. 1988) ............. 19
Barrentine v. Arkansas-Best Freight System, Inc.,
Gs HE ED 6.0 8 6050654 5cbe nese uns passim
Barrowclough v. Kidder, Peabody & Co., 752 F.2d
San Cae Ss Se Wk vexswasdeceiaeeiens 19
Bird v. Shearson/ American Express, Inc., 871 F.2d
292 (2d Cir.), vacated and remanded, 58
U.S.L.W. 3239 (U.S. Oct. 10, 1989) (No. 89-
BOG? «vs Wad dnenesaenines ease 10, 19, 20
Brown v. Wesley’s Quaker Maid, Inc., 771 F.2d
952 (6th Cir. 1985), cert. denied, 479 U.S. 830
CREE 0. 64ccannbeensebeace unas vane ce 14
Bruno v. Prudential-Bache Securities, Inc., No.
E005087, slip op. (Cal. Ct. App. filed Nov. 28,
eee ren er eT om er 20
Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213
( : ) SRR ere prem ery nth ere ye 11
DeSapio Vv. Josephthal and Co., 143 Misc. 2d 611,
540 N.Y.S.2d 932 (Sup. Ct. 1989) ........ 19
Garfield v. Thomson McKinnon Securities, Inc.,
No. 88-3027, slip op. (N.D. Ill. Dec. 16, 1988) 19
Gilmer v. Inierstate/Johnson Lane Corp., No.
88-9396, slip op. (W.D.N.C. Jan. 17, 1989), app.
pending, No. 88-1796 (4th Cir.) ............ 19
vi
PAGE
Jones Vv. Baskin, Flaherty, Elliot and Mannino,
P.C., 670 F. Supp. 597 (W.D. Pa. 1987) .... 19
Kulukundis Shipping Co. v. Amtorg Trading Corp.,
126 F.2d 978 (2d Cir. 1942) ...... ccc cens 11
McDonald v. City of West Branch, 466 U.S. 284
4. | APA er eo rer er eee passim
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
Rae., STS Vis GOS CHRD oc cnccnceceseanes passim
Moses H. Cone Memorial Hospital v. Mercury Con-
struction Corp., 460 U.S. 1 (1983) . 2.00.0... 11
Nicholson v. CPC Int'l inc., 877 F.2d 221 (3d Cir.
BOOED 800 scunahactdneali ceca 19, 20
Perry Vv. Thomas, 482 U.S. 483 (1987) ........ 11
Pihl v. Thomson McKinnon Securities, Inc., 48 Fair
Empl. Prac. Cas. (BNA) 922 (E.D. Pa. 1988)... .19
Rodriguez De Quijas vy. Shearson/American Ex-
press, Inc., 109 S. Ct. 1917 (1989) 2.00.00... passim
Scherk Vv. Alberto-Culver Co., 417 U.S. 506 (1974) 11
Shearson/ American Express Inc. v. McMahon, 482
ah Gee CATE Kikaninneedsisereeee passim
Southland Corp. v. Keating, 465 U.S. 1 (1984) .. 1}
Steck v. Smith Barney. Harris Upham & Co., 661
F. Supp. 343 (DNS. 1967) 20.0060 doe ccan 19
Steele Vv. L.F. Rothschild & Co., 701 F. Supp. 407
(S.D.N.Y.), app. dismissed, 864 F.2d 1 (2d Cir.
BORD 0c. ccnceceeuteeessceeus lene 19
Swenson V. Management Recruiters Int'l, Inc., 858
F.2d 1304 (8th Cir. 1988), reh’g denied, 872
F.2d 264 (1989), cert. denied, 110 S. Ct. 143
4 ay ree oe TTh ee 19
United Steelworkers v. Warrior & Gulf Navigation
Co., 363 UB. SPO (IDG) onc ccccccccccccs 16
Vii
PAGE
Utley v. Goldman Sachs & Co., 883 F.2d 184 (ist
Cir.), aff'g, 50 Fair Empl. Prac. Cas. (BNA)
1086 (D. Mass. 1989) ..........0 5 eee eens passim
Waish v. UBS Securities, Inc., No. 88-4600, slip op.
(S.D.N.Y. Oot. 5, 19GB) ...rccccccccccces 19
Statutes:
Federal Arbitration Act, 9 U.S.C. § 1 et seq. .... passim
a ee Wn eb ono cdqscccsectesuavessens 3
De Ee bch esnecascacavdsescnesedcens 3,6
es EU a cacencessncencccssneseengees 3
i! ee oY Fy Se Terria 8,13
Securities Act of 1933, 15 U.S.C. § 77a et seq. .... 8
2) 8 Sr ee oer 12
Securities Exchange Act of 1934, 15 U.S.C. § 78a
SOOT, cas ocd ce sc cdcccacccensccnesisetes 8
BS UBC. BS TRCCO) «occ vcccnsceccenccesss 13
Racketeer Influenced and Corrupt Organizations
Act, 18 U.S.C. § 1961 ef seq. 0... ccc cccnces 8
, Bit i ) . |) rere Tere s 2
eS Ts OE 6 inca 6n0 ce necencatacesaes 6
BD Wes OED back Koda reSucaccectaseoncs 6
Fair Labor Standards Act of 1938, 29 U.S.C. § 201
). rrerrrrrrrrrr Tee Terres rere et 9
Equal Pay Act of 1963, 29 U.S.C. § 206(d) ...... 19
Age Discrimination in Employment Act of 1967,
ep Ges EE OP OU, ov c.0000s5ccitecucr 19, 20
Employee Retirement Income Security Act of 1974,
ik ta BF FS Serre Terry ee 10, 19
a
Vill
PAGE
Se es ae adues Sieh ewastcudCabaks 9
Title VII of the Civil Rights Act of 1964, 42 U.S.C.
I et a oe re ea passim
ree 3
42 U.S.C. § 2000e-5(f)(5) 2... 0.00. eee, 14
Cal. Gov't Code § 12940 ............0.00.... 20
moe, GOO, Ge. GE ER, BOAR ww. wc ccccccccces 5
pmees. Gem. L. Gh. ISEB 2... ww ccc cc cccccccs 5
Minnesota Human Rights Act, Minn. Stat. § 363.03 19
New York Human Rights Law, N.Y. Exec. Law
Di :iveeh ahead aaduwe akheae ce kewadeus 19
Legislative Materials:
118 Cong. Rec. 4924 (1972) ................ 14
Rules:
Fe SS Re eee 3,14
Rule 53(a), Fed. R. Civ. P. ............... 14
Rule 53(b), Fed. R. Civ. P. ............... 14
New York Stock Exchange, Inc. Rule 347, 2 New
York Stock Exchange Guide (CCH) € 2347 .. 4
IN THE
Supreme Court of the United States
OCTOBER TERM, 1989
No.
—~*
GOLDMAN, Sacus & Co.,
GOLDMAN SACHS MONEY MARKETS INC.,
Dav'p B. Forp and Francis J. GAUL, JrR.,
Petitioners,
—against—
KRISTINE M. UTLEY,
Respondent.
s
_Z
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
Petitioners Goldman, Sachs & Co. (“Goldman Sachs”),
Goldman Sachs Money Markets Inc. (“GSMMI"), David
B. Ford (“Ford”) and Francis J. Gaul, Jr. (“Gaul”), de-
fendants below, respectfully pray that a writ of certiorari ‘
issue to review the judgment of the United States Court of
Appeals for the First Circuit (the “Court of Appeals”),
entered on August 23, 1989, which affirmed an order of the
United States District Court for the District of Massa-
chusetts (the “District Court ”) dated January 17, 1989.
The District Court had refused to enforce respondent's
individually-accepted agreement to arbitrate all contro-
versies arising out of her employment or the termination
of her employment. Relying exclusively upon this Court’s
to
opinion in Alexander v. Gardner-Denver Co., 415 U.S. 36
(1974), which held that an award in favor of the employer-
defendant in a completed arbitration under a collective-
bargaining agreement could be received in evidence but
was not entitled to preclusive effect under Title VII of the
Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e
et seq. (“Title VII”), the District Court denied petitioners’
motion to stay this action pending the arbitration of re-
spondent’s sex discrimination claim.
The Court of Appeals affirmed the District Court’s order,
holding that, regardless of the effect, as evidence or other-
wise, that an award in arbitration might have in the Title VII
action, respondent’s agreement to arbitrate could not be en-
forced at all because Congress had intended to prohibit the
enforcement of agreements to arbitrate Title VII claims.
See Utley v. Goldman Sachs & Co., 883 F.2d 184, 187 (ist
Cir. 1989). _
OPINIONS BELOW
The opinion of the United States Court of Appeals for
the First Circuit is reported at 883 F.2d 184 and is reprinted
at Appendix A hereto. The memorandum decision of the
United States District Court for the District of Massa-
chusetts is reported at 50 Fair Empl. Prac. Cas. (BNA)
1086 and is reprinted at Appendix B hereto.
JURISDICTION
The judgment of the Court of Appeals was entered on
August 23, 1989, and is reprinted at Appendix C hereto.
This Court has jurisdiction pursuant to 28 U.S.C.
§ 1254(1).
STATUTORY PROVISIONS INVOLVED '
The statutory provisions involved in this case are:
Federal Arbitration Act
Section 2, 9 U.S.C. § 2
Section 3, 9 U.S.C. § 3
Section 4, 9 U.S.C. §4
Title VII of the Civil Rights Act of 1964
Section 706, 42 U.S.C. § 2000e-5
Federal Rules of Civil Procedure
Rule 53
STATEMENT OF THE CASE
Respondent, Kristine M. Utley, was hired by Goldman
Sachs on or about July 8, 1985 as a fixed income sales
associate. She worked as a fixed income sales trainee in
Goldman Sachs’ New York headquarters office until she
became a sales associate of GSMMI on or about February
10, 1986 and was transferred to Goldman Sachs’ Boston
office. Goldman Sachs, a New York partnership, is an
investment banking firm and broker-dealer and a member
of numerous national securities exchanges, including the
New York Stock Exchange, Inc. (“NYSE”). GSMMI is
a corporation that is wholly owned by Goldman Sachs and
is a member of the NYSE and other securities exchanges.
As a condition of her employment with both Goldman
Sachs and GSMMI, respondent was required to register
with the NYSE as a General Securities Representative. On
1 The text of these provisions is reprinted in full at Appendix D
hereto.
4
or about August 20, 1985, respondent, while employed by
Goldman Sachs, executed a Uniform Application for Securi-
ties Industry Registration or Transfer (“Form U-4”), re-
questing registration with the NYSE and other self-regu-
latory organizations (“SRO’s’”) in the securities industry.
Another Form U-4 executed by respondent and dated
March 19, 1986 reported respondent’s new employment
with GSMMI.
Representation Number 5 on the signature page of the
copies of the Form U-4 executed by respondent consists
of an arbitration commitment, pursuant to which respon-
dent agreed “to arbitrate any dispute, claim or controversy
that may arise between me and my firm . . . that is required
to be arbitrated under the rules, constitutions or by-laws
of the organizations with which I register, as indicated in
item 10 as may be amended from time to time.” In each
case, item 10 requested respondent’s registration with the
NYSE and other SRO’s.
NYSE Rule 347 states:
Any controversy between a registered repre-
sentative and any member or member organi-
zation arising out of the employment or
termination of employment of such regis-
tered representative by and with such mem-
ber or member organization shall be settled
by arbitration, at the instance of any such
party, in accordance with the arbitration
procedure prescribed elsewhere in these
rules.
~ 2 New York Stock Exchange Guide (CCH) 2347.
In the fall of 1987, petitioners requested that respondent
transfer to Goldman Sachs’ New York office pursuant to
a program for the consolidation of certain fixed-income
securities sales operations. Respondent refused to accept
the New York position or even to discuss the requested
transfer directly with petitioners. Because, under the con-
solidation, there were no other opportunities available in
the Boston office for respondent, her employment was
terminated on November 25, 1987.
On November 27, 1987, respondent filed a Charge of
Discrimination with the Massachusetts Commission Against
Discrimination and, effective January 26, 1988, the
United States Equal Employment Opportunity Commission
(the “EEOC”), alleging that she had been subjected to a
sexually harassing work environment and that Goldman
Sachs and Gaul, a Vice President of Goldman Sachs and
the Resident Manager of GSMMI operations in Boston,
had discriminated against respondent on account of her
sex in requesting that she relocate to New York.
On or about December 3, 1987—prior to commencing
the present action—respondent filed a Verified Complaint
in the Superior Court of Masachusetts, Suffolk County
(the “State Action”), alleging in substance that Goldman
Sachs, Gaul and Ford, a general partner of Goldman Sachs,
had subjected respondent to a sexually harassing work en-
vironment and had discriminated against her on the basis
of her sex in requesting that she transfer to New York and
in terminating her employment after her repeated refusals
to discuss the proposed transfer. Respondent asserted
various common law claims sounding in contract or tort
and alleged violations of Massachusetts anti-discrimination
statutes, Mass. Gen. L. ch. 151B; Mass. Gen. L. ch. 12,
$ 11I. Respondent subsequently filed an Amended Veri-
fied Complaint adding GSMMI as a defendant.
Petitioners moved for a stay of the State Action pending
arbitration of respondent’s claims before an arbitral panel
of the NYSE pursuant to the arbitration commitment in
her Form U-4. The Massachusetts Superior Court originally
denied petitioners’ motion without opinion. After remand
from the Appeals Court of the Commonwealth of Massa-
chusetts (the “Appeals Court”), the Superior Court entered
an order dated May 26, 1989, granting petitioners’ motion
with respect to respondent’s common law claims and deny-
ing the motion with respect to her statutory claims. Peti-
tioners have noticed an appeal to the Appeals Court from
that order.
After receiving a Notice of Right to Sue from the EEOC,
respondent commenced this action on or about April 6,
1988, alleging that petitioners had discriminated against
her on account of her sex in violation of Title VII, based
upon the identical factual allegations, circumstances and
events as those underlying the State Action. The Verified
Complaint alleged that the District Court had subject matter
jurisdiction over that claim pursuant to 28 U.S.C. $$ 1331,
1343 and Title VII. _
Petitioners filed a motion in the District Court on or about
April 26, 1988 for an order staying all proceedings in this
action pending the conclusion of arbitration before the
NYSE pursuant to Section 3 of the Federal Arbitration
Act (the “FAA”), 9 U.S.C. § 3. The District Court denied
petitioners’ motion and refused to enforce respondent’s
arbitration agreement, even in the first instance, conclud-
ing merely that its decision was “compelled” by this Court’s
decision in Alexander v. Gardner-Denver Co., 415 U.S. 36.
P.titioners appealed to the Court of Appeals, arguing
that respondent should be required to arbitrate her employ-
ment discrimination claim, at least in the first instance, even
if she subsequently may pursue her Title VII claim in federal
court. The Court of Appeals affirmed the District Court’s
decision, holding that “Congress intended to preclude even
a temporary prospective waiver of [a] judicial forum” for
Title VII claims. Utley v. Goldman Sachs & Co., 883 F.2d
at 187. The Court of Appeals also held that the District
Court had acted within its discretion when it declined to
stay this action pending arbitration of the arbitrable claims
in the State Action. /d.
The Court of Appeals acknowledged this Court’s recent
decisions enforcing pursuant to the FAA agreements to
arbitrate claims under federal statutes absent a showing of
specific'congressional intent to preclude a waiver of judicial
remedies. It refused, however, to enforce respondent’s agree-
ment to arbitrate her Title VII claim, even in the first
instance. The Court of Appeals held that this Court’s recent
decisions requiring the rigorous enforcement of arbitration
agreements did not involve employment discrimination dis-
putes and, thus, did not “disturb its prior ruling in Alexander
that arbitration agreements do not preclude an independent
right of access to a judicial forum for resolution of Title VII
claims.” 7d. at 186.
The Court of Appeals declined _to read the holdings of
Alexander and its progeny as limited to grievance arbitra-
tions pursuant to collective-bargaining agreements, and held
that an employee cannot be forced to arbitrate a Title VII
claim in the first instance because she “cannot waive pro-
spectively her right to a judicial forum,” even temporarily,
“regardless of the type of employment agreement which
she signs.” /d. at 187. In addition, the Court of Appeals
concluded that Title VII's provision of an express private
right of action involving substantive rights that have “ ‘his-
torically been the sole province of Article III adjudication’ ”
demonstrates Congress’ intent to prohibit arbitration, even
in the first instance, of disputes involving those rights. /d.
er (citation omitted).
a e
REASONS FOR GRANTING THE WRIT
A conflict among the Circuits has not yet emerged on
the question presented, but the Court of Appeal’s finding
of a conflict between these two important federal statutes
should be reviewed now because it is itself in radical con-
flict with the Court’s recent decisions under the FAA.
Moreover, a jurisprudence under which no role in the vindi-
cation of Title VII and other significant federally-created
employment rights is assigned to arbitration under agree-
ments covered by the FAA should not be allowed to pre-
vail indefinitely without review by this Court.
In its recent decisions, the Court has attempted to put
an end to judicial hostility towards arbitration and has en-
forced pursuant to the FAA agreements to arbitrate claims
asserted under a series of complex federal statutory schemes.
See, e.g., Rodriguez De Quijas v. Shearson/American
Express, Inc., 109 S. Ct. 1917 (1989) (Securities Act of
1933, 15 U.S.C. § 77a et seg.); Shearson/American Ex-
press Inc. v. McMahon, 482 U.S. 220 (1987) (Securities
Exchange Act of 1934, 15 U.S.C. § 78a ef seg., and
Racketeer Influenced and Corrupt Organizations Act, 18
U.S.C. § 1961 et seg.); Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (federal
antitrust laws, 15 U.S.C. § 1 et seg.). The Court has made
clear that arbitrators are capable of interpreting and en-
forcing comprehensive federal statutes and that “[b]y agree-
ing to arbitrate a statutory claim, a party does not forgo
the substantive rights afforded by the statute; it only sub-
mits to their resolution in an arbitral, rather than a judicial,
forum.” Mitsubishi Motors Corp. v. Soler Chrysler-Ply-
mouth, Inc., 473 U.S. at 628. In protecting the significant
national policy favoring arbitration, this Court has imposed
upon the party opposing arbitration the burden of estab-
lishing that Congress intended to prohibit the enforcement
of an agreement to arbitrate the statutory claim at issue.
See Shearson/American Express Inc. v. McMahon, 482
U.S. at 226-27 (citing Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. at 628).
In addition to the inconsistency with this Court's de-
cisions in Mitsubishi, McMahon and Rodriguez, the Court
of Appeals’ refusal to enforce respondent’s individually-
accepted agreement to arbitrate this dispute was premised
upon a misconstruction and misapplication of the Court's
decisions in Alexander vy. Gardner-Denver Co., 415 U.S.
36, and its progeny. Those decisions denied preclusive
effect on employees’ statutory claims to awards in arbitra-
tions under collective-bargaining agreements between their
employers and their unions.’ This Court has not extended
those decisions, which address only the preclusive effect of
previously-held labor arbitrations on federal statutory
claims, to determinations of the arbitrability of such claims
in the first instance under the FAA.
Moreover, the Court should grant this petition because
the Court of Appeals’ misapplication of this Court’s FAA
arbitration precedents involves not only the proper con-
struction of Title VII, but extends inevitably to claims
under federal statutes that regulate other aspects of the
employment relationship. The reasoning of the Court of
Appeals is identical to that of other courts that have re-
fused to enforce valid individually-accepted agreements to
2 See also McDonald v. City of West Branch, 466 U.S. 284 (1984)
(unappealed arbitration award pursuant to terms of collective-
bargaining agreement not entitled to res judicata or collateral estoppel
effect in action under 42 U.S.C. § 1983); Barrentine vy. Arkansas-
Best Freight System, Inc., 450 U.S. 728 (1981) (claim under Fair
Labor Standards Act of 1938, 29 U.S.C. § 201 et seg., not barred
by prior submission of grievance to dispute resolution procedures
pursuant to terms of collective-bargaining agreement).
10
arbitrate other statutory claims. Indeed, in the current
term, the Court vacated and remanded for further con-
sideration in light of its decision in Rodriguez De Quijas
Vv. Shearson/ American Express, Inc., 109 S. Ct. 1917, a
decision of the United States Court of Appeals for the
Second Circuit holding that claims under the Employee
Retirement Income Security Act of 1974, 29 U.S.C. § 1001
et seq. (“ERISA”), are not arbitrable. The Second Circuit
had relied upon the same unjustified extension in the ERISA
context of the Court’s labor arbitration decisions that
premised the Court of Appeals’ Title VII decision in this
case. See Bird v. Shearson/ American Express, Inc., 871
F.2d 292 (2d Cir.), vacated and remanded, 58 U.S.L.W.
3239 (U.S. Oct. 10, 1989) (No. 89-231).
Thus, this case presents an important and recurring ques-
tion of federal law and warrants this Court’s review in order
to clarify its arbitration precedents and guide the lower
courts in defining the scope of the FAA. Moreover, if the
Court were to grant this petition, it would have the oppor-
tunity to clarify the distinction between its labor arbitration
decisions and its decisions under the FAA and to protect
the overcrowded dockets of the federal courts from disputes
that should properly be submitted to, and might be finally
settled by, arbitration.
The Court Should Grant Certiorari To Correct The
Misapprehension That Congress Intended To Preclude
Arbitration Of Title VII Claims, Even In The First
Instance, Pursuant To An Individually-Accepted Agree-
ment To Arbitrate Such Claims Under The FAA.
The FAA represents a congressional declaration of na-
tional policy favoring arbitration and requires the arbitra-
11
tion of disputes that the parties have expressly agreed to
arbitrate pursuant to a valid agreement. See Mitsubishi
Motors Corp. v. Soler Chrysler-Plymouth, Inc.,-473 U.S.
at 625-26; Dean Witter Reynolds Inc. v. Byrd, 470 U.S.
213, 219-20 (1985). In its recent decisions, the Court has
reaffirmed this strong federal policy and has repeatedly
held that courts must “rigorously enforce agreements to
arbitrate.” ” Shearson/ American Express Inc. v. McMahon,
482 U.S. at 226 (quoting Dean Witter Reynolds Inc. v.
Byrd, 470 U.S. at 221; see also Perry v. Thomas, 482
U.S. 483, 490 (1987); Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, Inc., 473 U.S. at 625-26; South-
land Corp. v. Keating, 465 U.S. 1, 10 (1984); Moses H.
Cone Memorial Hospital v. Mercury Construction Corp..
460 U.S. 1, 24 (1983). Consistently with the purpose
and policy underlying the FAA, the Court has observed:
{W]e are well past the time when judicial
suspicion of the desirability of arbitration
and of the competence of arbitral tribunals
inhibited the development of arbitration as
an alternative means of dispute resolution.
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
473 U.S. at 626-27.
3 Accord Rodriguez De Quijas v. Shearson/American Express,
Inc., 109 S. Ct. at 1920 (“ ‘the old judicial hostility to arbitrations’
.. . . has been steadily eroded over the years” (quoting Aulukundis
Shipping Co. v. Amtorg Trading Corp., 126 F.2d 978, 985 (2d Cir.
1942) ); Moses H. Cone Memorial Hospital v. Mercury Construction
Corp., 460 U.S. at 24 (the FAA “is a congressional declaration of
a liberal federal policy favoring arbitration . . . [and] questions of
arbitrability must be addressed with a healthy regard for the federal
policy favoring arbitration”); Southland Corp. v. Keating, 465 U.S.
at 10 (in enacting the FAA, “Congress declared a national policy
favoring arbitration . . . [that] mandated the enforcement of arbitra-
tion agreements”); Scherk v. Alberto-Culver Co., 417 U.S. 506,
510-11 (1974).
12
A court’s duty to enforce an arbitration agreement is
not diminished when a party bound by such an agreement
raises a claim founded upon statutory rights. See Shearson/
American Express Inc. v. McMahon, 482 U.S. at 226.
Rather, the court must enforce the agreement unless it finds
that, in enacting the statute, Congress intended “to preclude
a waiver of judicial remedies, or that such a waiver of
judicial remedies inherently conflicts with the underlying
purposes” of the statute. Rodriguez De Quijas v. Shearson/
American Express, Inc., 109 S.Ct. at 1921 (citing Shearson/
American Express Inc. v. McMahon, 482 U.S. at 226-27).
In reaching its decision below, the Court of Appeals con-
cluded that Congress had intended that the strong presump-
tion of arbitrability under the FAA would not apply to
Title VII claims. The evidence on which the court below
based its conclusion, however, has never been accepted by
this Court as sufficient to establish a legislative purpose to
foreclose arbitration of an individually-accepted arbitration
commitment. The fact that Congress provided an express
right of action in Title VII does not demonstrate an intent to
override the FAA. To the contrary, this Court has rejected
the contention that arbitrators are incapable of properly
deciding claims premised upon statutory rights, see Shear-
son/ American Express Inc. v. McMahon, 482 U.S. at 226,
and, in Rodriguez, held that a claim arising under the ex-
press private right of action provided in Section 12 of the
Securities Act of 1933, 15 U.S.C. § 77/, must be submitted
to arbitration pursuant to an agreement to arbitrate
between a securities firm and its customer. See Rodriguez
De Quijas v. Shearson/ American Express, inc., 109 S. Ct.
1917. If the provision of an express private right of action
does not demonstrate a congressional intent to override the
strong national policy favoring arbitration with respect to
Securities Act claims, it should not do so with respect to
Title VII claims.
13
The Court of Appeals also found evidence of Congress’
intent to preclude arbitration of Title VII claims, even in
the first instance, in the congressional desire that the
Statute’s proscription of employment discrimination be ac-
corded the “highest priority.” Utley v. Goldman Sachs &
Co., 883 F.2d at 187. However, this Court observed in
Alexander v. Gardner-Denver Co., 415 U.S. at 55, that
arbitration provides a “relatively inexpensive and expe-
ditious means for resolving a wide range of disputes, includ-
ing claims of discriminatory employment practices . . .
[and] may well produce a settlement satisfactory to both
employer and employee.” Thus, contrary to the Court of
Appeals’ conclusion, prior resort to arbitration might pro-
mote, rather than defeat, the congressional preference for
the expeditious resolution of Title VII claims.
Moreover, the Court of Appeals’ presumption that a
claim asserted under Title VII is not arbitrable because it
involves adjudication of rights that historically have been
“the sole province of Article III adjudication,” Utley v.
Goldman Sachs & Co., 883 F.2d at 187 (citation omitted),
manifests an unfounded hostility towards arbitration that
is out of step with this Court’s decisions and would
frustrate Title VII's statutory policy of promoting concilia-
tion and informal resolution of employment discrimination
claims. The Court has rejected the notion that Congress
intended that claims that are within the exclusive jurisdic-
tion of the federal courts may not be arbitrated pursuant to
an individually-accepted arbitration agreement. See Shear-
son/ American Express Inc. v. McMahon, 482 U.S. 220
(agreement to arbitrate claim under Section 10(b) of the
Securities Exchange Act of 1934, 15 U.S.C. § 78j(b),
enforceable notwithstanding exclusive federal jurisdiction
provision ); Mitsubishi Motors Corp. v. Soler Chrysler-Ply-
mouth, Inc., 473 U.S. 614 (agreement to arbitrate federal
renin
14
antitrust claim enforceable notwithstanding exclusive fed-
eral jurisdiction over such claims).
Indeed, there is no suggestion in the language or legis-
lative history of either Title VII or its 1972 amendments
of any congressional intent to preclude the enforcement of
individually-accepted commitments to arbitrate employ-
ment discrimination claims. To the contrary, the provisions
of that statute evince Congress’ preference for the informal,
expeditious resolution of employment discrimination dis-
putes and, thus, manifest a congressional intention to re-
quire enforcement of individually-accepted agreements to
arbitrate such claims, at least in the first instance.
For example, Section 706(f)(5) grants discretion to
judges presiding over Title VII claims to “appoint a master
pursuant to rule 53 of the Federal Rules of Civil Pro-
cedure” if-the case has not been scheduled for trial “within
one hundred and twenty days after issue has been joined.”
42 U.S.C. 2000e-5(f)(5). Rule 53(a), Fed. R. Civ. P.,
empowers the trial court to appoint a master even over the
objections of the parties, and the master’s findings of fact
are subject to review under the “clearly erroneous” stand-
ard. See, e.g., Brown v. Wesley's Quaker Maid, Inc., 771
F.2d 952 (6th Cir. 1985), cert. denied, 479 U.S. 830
(1986). Section 706(f)(5) evinces Congress’ determina-
tion to authorize trial courts to require the parties to a Title
VII dispute to present the matter—at lea.. in the first in-
stance—to non-Article II] adjudication where such an ap-
proach would likely contribute to the expeditious resolu-
tion of the case. This manifestation of congressional intent is
especially significant because, although ordinarily reference
to a master is “the exception and not the rule,” Fed. R. Civ.
P. 53(b), under Title VII this procedure may be routinely
invoked. See 118 Cong. Rec. 4924 (1972) (statement
of Sen. Javits).
15
Thus, the Court of Appeals erroneously concluded that
Congress intended to preclude arbitration of Title VII
claims, even in the first instance, pursuant to an individually-
accepted agreement to arbitrate such claims under the FAA.
The Court should grant this petition for a writ of certiorari
and reverse the Court of Appeals’ decision in order to ensure
that these important federal statutes are properly applied.‘
The Court Should Grant Certiorari In Order To
Correct The Misapplication Of This Court’s Labor
Arbitration Decisions And To Clarify The Distinction
Between Those Decisions And The Court’s Determina-
tions Under The FAA.
In relying upon this Court’s decision in Alexander v.
Gardner-Denver Co., 415 U.S. 36, the Court of Appeals
appears to have confused the issue in this case, ie., the
applicability and enforceability of an individually-accepted
arbitration commitment in the context of an employment
discrimination claim under Title VII, with the issue in
Alexander—whether courts should give preclusive effect in
*In addition, a reversal of the decision of the Court of Appeals
would enable the parties to arbitrate all of the claims arising from
the termination of respondent's employment, as respondent agreed
— to do, and would eliminate the wasteful prospect of duplicative pro-
ceedings in separate fora. Where, as here, an employment discrimina-
tion claimant who has agreed to arbitrate any dispute arising out
of her employment or its termination asserts claims under Title VIT
and state statutory and common law based upon identical factual
allegations and circumstances, see above at p. 6, the parties would be
required to litigate those claims in several separate proceedings unless
the courts enforce the agreement to arbitrate those claims. Here, for
example, the courts would require the parties to litigate the Title VII
claim in federal court and the state statutory claims in state court and
simultaneously to arbitrate respondent's common law claims, even
though all of those claims are premised upon the same alleged trans-
actions and occurrences.
16
actions under Title VII to previously-rendered arbitral
awards under a non-discrimination provision of a collec-
tive-bargaining agreement. In Alexander this Court held
that submission of an employment discrimination claim to
grievance arbitration pursuant to a collective bargaining
agreement did not preclude a subsequent trial de novo of a
Title VII claim. Recognizing that labor arbitration is a
specialized form of dispute resolution limited to the inter-
pretation and application of collective-bargaining agree-
ments, the Court concluded that grievance arbitration was
a “comparatively inappropriate forum for the final resolu-
tion of rights created by Title VII.” Jd. at 56 (emphasis
supplied).
This Court’s arbitration decisions clearly distinguish be-
tween grievance arbitration pursuant to a collective-bar-
gaining agreement and private arbitration under the FAA.
While FAA arbitration merely provides a non-judicial
forum for the resolution of private disputes, see Rodriguez
De Quijas v. Shearson/ American Express, Inc., 109 S. Ct.
at 1920 (citing Mitsubishi Motors Corp. v. Soler Chrysler-
Plymouth, Inc., 473 U.S. at 628), arbitration under a
collective-bargaining agreement is a more limited form of
dispute resolution “by which meaning and content are given
to [that] agreement.” United Steelworkers v. Warrior &
Gulf Navigation Co.,. 363 U.S. 574, 581 (1960).
Consistently with this distinction, the labor arbitrator
is limited to interpreting and applying the collective-bargain-
ing agreement in accordance with the intent of the contract-
ing parties and the “industrial common iaw of the shop,”
and has no authority to adjudicate the individual rights
and obligations of the disputants under federal statutes—
a circumstance that is only “mitigated where a collective-
bargaining agreement contains provisions facially similar
to those of Title VII.” Alexander v. Gardner-Denver Co.,
17
415 U.S. at 53, 57.° In contrast, this Court has recognized
that arbitrators in private arbitrations under the FAA are
authorized to, and are fully capable of, interpreting and
applying the provisions of federal statutes. See Shearson/
American Express Inc. Vv. McMahon, 482 U.S. at 232;
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
473 U.S. at 628, 633-34.
Labor arbitration has also been given restricted effect
because of this Court’s concern that “the union’s exclusive
control over the manner and extent to which an individual
grievance is presented” might deprive an employment dis-
crimination claimant of a full and fair opportunity to pro-
secute such claims in an arbitration pursuant to a collective-
bargaining agreement. Alexander v. Gardner-Denver Co.,
415 US. at 58, n.19. This Court has suggested that, under
certain circumstances, the union prosecuting the employee’s
discrimination claims might subordinate “the interests of
the individual employee . . . to the collective interests of
all employees in the bargaining unit.” /d. There is no
possibility of such a conflict of interest in private arbitra-
tions under the FAA, in which the employee would have
full control over the prosecution of the claim and ample
opportunity to protect his personal interests.
Despite concern about whether labor arbitration is
appropriate for the final determination of employment
discrimination claims, the Court in Alexander recognized
5 The collective-bargaining agreements in the Court’s labor arbitra-
tion cases limited the role of the arbitrators to the interpretation
of the terms of those agreements. Any award based upon other
considerations, such as the provisions of federal statutes, would have
been subject to avoidance as beyond the scope of the arbitrators’
authority. See McDonald v. City of West Branch, 466 U.S. at 291;
Barrentine V. Arkansas-Best Freight System, Inc., 450 U.S. at 744-45;
Alexander Vv. Gardner-Denver Co., 415 U.S. at 53-54.
18
the beneficial role of arbitration in the resolution of such
controversies. The Court concluded that “the federal
policy favoring arbitration of labor disputes and the federal
policy against discriminatory employment practices can best
be accommodated” in the collective bargaining context by
making available remedies under both the arbitration pro-
vision of a collective-bargaining agreement and a cause
of action under Title VII. /d. at 59-60. “The arbitral
decision may be admitted as evidence and accorded such
weight as the court deems appropriate” in the subsequent
judicial proceedings. /d.; see also McDonald v. City of
West Branch, 466 U.S. at 292, n.13 (same); Barrentine
Vv. Arkansas-Best Freight System, Inc., 450 U.S. at 743,
n.22 (same).
Contrary to this clear mandate, the Court of Appeals
in this case eliminated any role for arbitration in the
resolution of Title VII claims and, thus, failed to adhere
to the procedure established by this Court for accommodat-
ing the federal policies favoring the enforcement of private
arbitration agreements and prohibiting unlawfully discrim-
inatory employment practices. In failing to enforce re-
spondent’s agreement to arbitrate her employment discrim-
ination claims, at least in the first instance, the Court of
Appeals misconstrued this Court’s labor arbitration deci-
sions and disregarded the strong national policy favoring
such arbitration. The Court should grant this petition for
a writ of certiorari and reverse the Court of Appeals’ deci-
sion in order to correct this misapplication of its precedents
and to accommodate the federal interests underlying the
FAA to those underlying Title VII.
Moreover, if the Court grants this petition, it would have
the opportunity to clarify the distinction established in its
decisions between labor arbitration pursuant to a collective-
bargaining agreement and private arbitration of statutory
19
claims under the FAA. The lower federal courts have ren-
dered conflicting opinions as to whether the Court’s labor
arbitration cases preclude enforcement of private agree-
ments to arbitrate disputes under Title VII and other fed-
eral statutes. A number of courts have refused to follow
this Court’s decisions in Mitsubishi, McMahon and Rod-
riguez and have relied upon this Court’s labor arbitration
opinions in Alexander, Barrentine and McDonald to decline
to enforce under the FAA otherwise valid arbitration agree-
ments in cases asserting statutory claims.° Other courts
have upheld the arbitrability of such claims in accordance
with this Court’s recent arbitration jurisprudence.’
6 See e.g., Nicholson v. CPC Int'l Inc., 877 F.2d 221 (3d Cir.
1989) (claim under the Age Discrimination in Employment Act
of 1967, 29 U.S.C. § 621 et seq. (“ADEA”)); Bird v. Shearson
Lehman/American Express, Inc., 871 F.2d 292 (ERISA claim);
Swenson V. Management Recruiters Int'l, Inc., 858 F.2d 1304 (8th
Cir. 1988), reh’g denied, 872 F.2d 264 (1989), cert. denied, 110
S. Ct. 143 (1989) (claim under Minnesota Human Rights Act,
Minn. Stat. § 363.03); Barrowclough v. Kidder, Peabody & Co.,
752 F.2d 923 (3d Cir. 1985) (ERISA claim); Alford v. Dean Witter
Reynolds, Inc., 712 F. Supp. 547 (S.D. Tex. 1989) (Title VII
claim); Gilmer v. Interstate/Johnson Lane Corp., No. 88-0396,
slip op. (W.D.N.C. Jan. 17, 1989), app, pending, No. 88-1796
(4th Cir.) (ADEA claim); Jones v. Baskin, Flaherty, Elliot and
Mannino, P.C., 670 F. Supp. 597 (W.D. Pa. 1987) (ADEA
claim); Steck v. Smith Barney, Harris Upham & Co., 661 F. Supp.
543 (D.N.J. 1987) (ADEA claim); DeSapio v. Josephthal and Co.,
143 Misc. 2d 611, 540 N.Y.S.2d 932 (Sup. Ct. 1989) (claim under
Section 296 of New York Human Rights Law, N.Y. Exec. Law
§ 296).
7 See Arnulfo P. Sulit, Inc. v. Dean Witter Reynolds, Inc., 847
F.2d 475 (8th Cir. 1988) (ERISA claim); Steele v. L.F. Rothschild
& Co., 701 F. Supp. 407 (S.D.N.Y.), app. dismissed, 864 F.2d |
(2d Cir. 1988) (claim under Equal Pay Act of 1963, 29 U.S.C.
§ 206(d)), Garfield v. Thomson McKinnon Securities, Inc., No.
88-3027, slip op. (N.D. Ill. Dec. 16, 1988) (ADEA claim);
Walsh v. UBS Securities, Inc., No. 88-4600, slip op. (S.D.N.Y.
Oct. 5, 1988) (ADEA claim); Pihl v. Thomson McKinnon Securi-
(footnote continued on following page)
20
The guidance of this Court is required if the lower courts
are properly to apply its FAA arbitration decisions to this
and similar statutory disputes. The Court of Appeals
acknowledged that this Court’s decisions require evidence
of a specific congressional intent to withdraw respondent’s
claim from arbitration. Finding none, it erroneously held
the claim non-arbitrable because it involves rights of the
sort that have “historically been the sole province of Article
III adjudication.” Utley v. Goldman Sachs & Co., 883
F.2d at 187. This Court’s direction is therefore necessary
to ensure the enforceability and reliability of individually-
accepted arbitration commitments, and, in the interest of
reducing the overcrowded dockets of the federal courts, to
give arbitration a chance to resolve disputes that the parties
have agreed to resolve in that forum—a forum that this
Court has repeatedly held to be adequate to the task.
(footnote continued from preceding page)
ties, Inc., 48 Fair Empl. Prac. Cas. (BNA) 922 (E.D. Pa. 1988)
(ADEA claim); Bruno vy. Prudential-Bache Securities, Inc., No.
E005087, slip op. (Cal. Ct. App. filed Nov. 28, 1988) (claim under
California anti-discrimination statute, Cal. Gov't Code § 12940). See
also Nicholson v. CPC Int'l Inc., 877 F.2d at 231 (Becker, J.,
dissenting); Bird v. Shearson Lehman/ American Express, Inc., 871
F.2d at 298 (Cardamone, J., dissenting).
ee oe
21
CONCLUSION
For all of the foregoing reasons, petitioners respectfully
request the Court to issue a writ of certiorari in this case
to review and reverse the decision of the United States Court
of Appeals for the First Circuit.
Respectfully submitted,
JOHN F. CANNON
Counsel of Record for Petitioners
125 Broad Street
New York, New York 10004
(212) 558-4000
THEODORE O. ROGERS, JR.
THEODORE EDELMAN
GEOFFREY POTTER
SULLIVAN & CROMWELL
New York, New York
DouUGLAS F. SEAVER
STEWART A. BRODER
GASTON & SNOW
Boston, Massachusetts
Of Counsel
November 21, 1989
APPENDIX A
mR
18
ad
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®
2 -
Opinion of the Court of Appeals
for the First Circuit
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 89-1218
KRISTINE UTLEY,
Plaintiff, Appellee,
Vv.
GOLDMAN SACHS & COMPANY, ef al.,
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
{Hon. Mark L. Wolf, U.S. District Judge]
.
¥
Before
Bownes and Selya, Circuit Judges,
and Harrington,* District Judge.
THEODORE EDELMAN with whom JOHN F. CANNON,
SULLIVAN & CROMWELL, DOUGLAS F. SEAVER, STEWART
A. BRODER and Gaston & SNOw were on brief for appel-
lants.
RICHARD D. GLOvsKY with whom MELINDA MILBERG,
DANIEL S. TARLOW and GLOvsky & ASSOCIATES were on
brief for appellee.
AUGUST 23, 1989
* Of the District of Massachusetts, sitting by designation.
A2
Opinion of the Court of Appeals
for the First Circuit
HARRINGTON, District Judge. Goldman, Sachs & Co.,
Goldman Sachs Money Market Inc. (“GSMMI”), David
Ford and Frank Gaul, defendants-appellants, appeal from
the district court’s denial of their motion for a stay of all
proceedings pending arbitration of plaintiff, Kristine Marie
Utley’s Title VII claims. The district court (Wolf, J.)
denied defendants’ motions, based upon the United States
Supreme Court decision of Alexander vy. Gardner-Denver
Co., 415 U.S. 36 (1974), which ruled that an individual
cannot prospectively waive judicial remedies for a violation
of Title VII. Defendants filed an appeal urging this Court,
at the very least, to enforce the arbitration agreement be-
tween them and the plaintiff, before allowing Ms. Utley
to proceed with her Title VII claims in a judicial forum.
For the reasons set forth, we affirm the district court.
Plaintiff began her employment with Goldman Sachs
as a fixed income sales trainee in the New York office during
July of 1985. Goldman, Sachs & Co. is an investment bank-
ing firm and broker-dealer and a member of numerous
securities exchanges, including the New York Stock Ex-
change, Inc. Around February 10, 1986 she was assigned
to the Money Market Department of the Boston office of
GSMMI, where she was the only woman sales associate in
the Department. In the fall of 1987, a supervisor, Mr. Paul
Gaul, asked the plaintiff to consider a transfer to the New
York office. The plaintiff believed that she was singled
out for transfer on the basis of her sex, and both parties
engaged the assistance of counsel. Appellee’s Brief at 5.
When Ms. Utley refused to accept the transfer, she was
terminated.
Plaintiff filed timely complaints with the Massachusetts
Commission against Discrimination and the Equal Employ-
A3
Opinion of the Court of Appeals
for the First Circuit
ment Opportunity Commission alleging sexual harassment
and sex discrimination. On December 6, 1987, she filed
a Complaint in Massachusetts Superior Court.’ On April
6, 1988, the plaintiff filed an action in the United States
district court for the District of Massachusetts alleging that
her rights under Title VII of the Civil Rights Act of 1964,
as amended, 42 U.S.C. sec. 2000e-2 et seq. (“Title Vil”)
were violated. In her Complaint, plaintiff alleged that she
was subjected to a hostile working environment in which
women were demeaned. She also alleged that defendants’
efforts to transfer her to New York and their decision to
terminate her employment constituted acts of discrimination
on account of her sex. The defendants moved the district
court, pursuant to the Federal Arbitration Act (“FAA”),
9 U.S.C. sec. 3, for an Order staying all proceedings in
district court pending the completion of arbitration.
Defendants claimed that arbitration was mandated by
Utley’s execution of a Uniform Application for Securities
Industry Registration or Transfer (“Form U-4"), which
stated that she agreed to arbitrate any dispute which arose
‘ The Complaint consisted of eight counts, including allegations
of sexual harassment and discrimination in violation of G.L.M.
c. 151B; violation of G.L.M. c. 12 sec. i11; and wrongful termination.
Defendants moved to dismiss, or in the alternative, to stay the state
proceedings on the grounds that plaintiff had agreed to arbitrate all
claims. After an appeal of the superior court's denial of these mo-
tions, the case was remanded to superior court for a determination
of the agreement's validity, and a determination of which claims,
if any, were arbitrable. The superior court (Rouse, J.) held that
the arbitration agreement was valid, and that the plaintiff must
arbitrate her contract and tort claims. The court ruled that the
plaintiff could pursue her sex discrimination and civil rights claims
in the judicial forum. Utley v. Goldman Sachs & Co. et al., CA &7-
6735 (Mass. Sup. Ct., May 26, 1989) (Memorandum and Order
denying Defendants’ Motion to Compel Arbitration).
A4
Opinion of the Court of Appeals
for the First Circuit
2
between her and her firm.’ The plaintiff. opposed defend-
ants’ motions on the grounds, infer alia, that plaintiff's Title
VII claim is not referable to arbitration under the FAA.
In Alexander vy. Gardner-Denver, the Supreme Court
ruled that, despite a collective bargaining agreement to
arbitrate all disputes, an employee could not prospectively
waive his or her right to a judicial forum on an employment
discrimination claim. While acknowledging the existence
of a strong federal policy in favor of arbitration, the Court
determined that the scheme of Title VII placed ultimate
responsibility for its enforcement with federal courts, gave
them “plenary powers” to secure compliance, 415 U.S.
at 45, and determined that deferral to arbitral decisions
would conflict with that rule.-/d. at 56.
The Court further decided that the legislative history
of Title VII “manifests a Congressional intent to allow an
individual to pursue independently his rights under both
Title VII and other applicable state and federal statutes.”
Id. at 48, and n.9 (emphasis added). The Court also noted
that the “choice of forums inevitably affects the scope of the
substantive right to be vindicated” id. at 56 (citing U.S.
Bulk Carriers Vv. Arguelles, 400 U.S. 351, 359-360 (1971),
(Harlan, J., concurring) ), and concluded that “federal
policy was best accommodated by permitting an employee
to pursue fully remedies under the grievance-arbitration
clause of a collective-bargaining agreement and his cause
of action under Title VII.” /d. at 59-60. The Court never
directly addressed whether arbitration must precede a
> Ms. Utley disputes the validity of at least one of two Form U-4
agreements. We form no opinion about its validity, except to assume
for the purposes of this opinion that it was a valid agreement,
AS
Opinion of the Court of Appeals
for the First Circuit
judicial remedy but a reasonable inference from the Court's
use of such language as, “permitting an employee” and
“allowing an individual” to pursue both remedies is that it
was not intended to mandate arbitration of Title VII claims
before proceeding to a judicial forum.
In decisions following Alexander, the Court effectively
developed a presumption of arbitrability under the FAA.
See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
Inc., 473 U.S. 614, 628 (1985) (burden is on party oppos-
ing arbitration to show Congressional intention to preclude
waiver of judicial remedies); see also, Shearson/ American
Express Inc. v. McMahon, 107 S. Ct. 2332, 2337 (1987);
(FAA, 9 U.S.C. § 1 et seg. (1982) establishes a “ ‘federal
policy favoring arbitration’”) (quoting Moses H. Cone
Memorial Hosp. v. Mercury Construction Corp., 460 U.S.
1, 24 (1983) ); Rodriguez de Quijas v. Shearson/ American
Express Inc., 57 USLW 4539 (1989) (overruling Wilko v.
Swan, 346 U.S. 427 (1953), and holding that arbitration
agreements are enforceable as to claims under section 12(2)
of the Securities Act of 1933).
Notwithstanding this policy, however, the Court has done
nothing to disturb its prior ruling in Alexander that arbitra-
tion agreements do not preclude an independent right of
access to a judicial forum for resolution of Title VII claims.
In fact, none of the recent pro-arbitration decisions by the
Supreme Court involve employment discrimination claims.
See Swenson Vv. Management Recruiters International, Inc.,
858 F.2d 1304, 1306-7 (8th Cir. 1988). The reason for
this is the congressional intent behind Title VII. The pre-
sumption of arbitrability under the FAA will be defeated
when it is “overriden by a contrary congressional command”
Ao
Opinion of the Court of Appeals
for the First Circuit
in another statute. Shearson, 107 S. Ct. at 2337. The Court
permits exceptions to enforcement of arbitration agreements
when “Congress . . . has evinced an intention to preclude
a waiver of judicial remedies for the statutory rights at
issue.” Mitsubishi, 473 U.S. at 627-28. See also, Mc-
Donald v. City of West Branch, 466 U.S. 284, 289.
Congress has shown such an intention with regard to Title
VIL.
In this circuit the court has articulated previously that
the proper inquiry regarding arbitrability under Mitsubishi
is one of Congressional intent. Page v. Moseley, Hallgarten,
Estabrook, and Weeden, Inc., 806 F.2d 291, 300 (1st Cir.
1986). We have stated that we would not preclude arbitra-
tion of federal statutory rights unless we found that Con-
gress, either implicitly or explicitly, intended otherwise. Jd.
at 297. In Page, we distinguished Title VII actions under
Alexander from the general rule favoring arbitrability,
noting that Title VII “contained an express private right of
action, . . . and involved adjudication of the rights of an
individual under the Constitution, an inquiry that, with alli
due respect to arbitration, has historically been the sole
province of Article III adjudication.” id.
That reasoning, based upon a recognition of Title VII’s
unique nature, continues to be valid today. The fact that
Ms. Utley signed an individual employment agreement
rather than a collective bargaining agreement as in Alex-
ander is not significant. Similarly, defendants’ attempts to
read into Alexander and its progeny a requirement for
employees to participate in arbitration prior to initiating
claims in a judicial forum is inconsistent with the Congres-
sional intent behind Title VII. As Congress has made the
policy against discrimination “a highest priority,” Alex-
A7
Opinion of the Court of Appeals
for the First Circuit
ander, 415 U.S. at 47, we rule that an employee cannot
waive prospectively her right to a judicial forum at any time,
regardless of the type of employment agreement which she
signs.
Further support for this conclusion can be found in the
sighth Circuit decision of Swenson v. Management Recruit-
ers International, Inc., 858 F.2d 1304 (8th Cir. 1988).
Swenson involved a cause of action by an employee against
her former employer and her former supervisor, alleging
inter alia, sex discrimination in violation of a Minnesota
statute. The district court stayed the judicial proceedings
pending arbitration of all issues pursuant to the FAA. The
Court of Appeals reversed. Although that decision involved
a question of preemption of state judicial remedies by the
FAA, the Court carefully considered whether the FAA
preempted federal judicial remedies for violations of Title
VIL.
As stated by the Swenson Court,
We conclude that in the passage of Title VII it was
the Congressional intent that arbitration is unable
to pay sufficient attention to the transcendent public
interest in the enforcement of Title VII. Title VII
mandates the promotion of the public interest by
assisting victims of discrimination. The arbitration
process may hinder efforts to carry out this mandate.
Id. at 1307.
We find this analysis compelling.
To summarize our opinion, the text of Title VII, while
promoting conciliation and informal resolution, does not
mandate exhaustion of arbitration before allowing an em-
ployee to proceed to a judicial forum. Furthermore, Title
A8
Opinion of the Court of Appeals
for the First Circuit
VII’s statutory scheme and its legislative history clearly
point to the conclusion that Congress intended to preclude
even a temporary prospective waiver of judicial forum.
Therefore, Ms. Utley cannot be required to participate in
arbitration proceedings prior to a judicial hearing on her
Title VII claims.
Additionally, we hold that the district court acted within
its discretion when it declined to stay this action pending
the resolution of state court proceedings. The decision to
stay litigation of non-arbitrable claims is one left to the
district court as a matter of discretion to control its docket.
See Moses H. Cone Memorial Hospital v. Mercury Con-
struction Corp., 460 U.S. at 20 n.23. See also, Sevinor v.
Merrill Lynch, Pierce, Fenner & Smith, 807 F.2d 16, 20
(1st Cir. 1986).
The Order of the district court is AFFIRMED.
APPENDIX B
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Memorandum and Order of the United States
District Court for the District of Massachusetts
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
C.A. 88-794-WF
,
¥
KRISTINE UTLEY,
Plaintiff,
Vv.
GOLDMAN, SACHS & Co., et ail.,
Defendants.
MEMORANDUM AND ORDER
Wo LF, D.J. January 17, 1989
Defendants have moved for a stay pending arbitration
of plaintiff's claim of sex discrimination in violation of Title
VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.
§ 2000(e) et. seq. Plaintiff opposes this request. The mo-
tion must be denied.
This conclusion is compelled by the Supreme Court’s
decision in Alexander v. Gardner-Denver, 415 U.S. 36,
(1973). There, as here, the controversy in question was
subject to an agreement to submit all disputes to arbitra-
tion. 7d. at 40. Indeed, in contrast to the instant case, in
Alexander the claim of discrimination had been presented
to an arbitrator and rejected before the Title VII claim was
asserted in federal court. Yet, the Supreme Court unani-
mously rejected the contention that the Title VII claim
B2
Memorandum and Order of the United States
District Court for the District of Massachusetts
could not still be litigated, finding: that responsibility for
enforcement of Title VII is vested with the federal courts,
id. at 44; that Title VII was designed to supplement rather
than supplant existing laws and institutions relating to
employment discrimination, id. at 48-9 (emphasis added) ;
and there can be no prospective waiver of an employee’s
rights to litigate under Title VII in the form of a broad
agreement to arbitrate employment disputes, id. at 51.
Accordingly, defendants’ motion to stay is hereby
DENIED. All discovery shall be completed by September
15, 1989.
January 17, 1989
/S/ Mark L. WoLF
United States District Judge
APPENDIX C
* + Pee es See eee a Fst’
Judgmeni of the Court of Appeals
for the First Circuit
UNITED STATES COURT OF APPEALS
For THE First CIRCUIT
No. 89-1218
>
-
KRISTINE UTLEY,
Plaintiff, Appellee,
Vv.
GOLDMAN SACHS & COMPANY, ef al.,
Defendants, Appellants.
>
As
JUDGMENT
Entered: August 23, 1989
This cause came on to be heard on appeal from the
United States Disirict Court for the District of Massachu-
setts, and was argued by counsel.
Upon consideration whereof, It is now here ordered, ad-
judged and decreed as follows: The judgment of the district
court is affirmed.
By the Court:
FRANCIS P. SCIGLIANO
Clerk.
APPENDIX D
Statutory Provisions Involved
TITLE 9 OF THE UNITED STATES CODE
§ 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,
irrevocable, and enforceable, save upon such grounds as
exist at law or in equity for the revocation of any contract.
(July 30, 1947, ch. 392, 61 Stat. 670.)
§ 3. Stay of proceedings where issue therein
referable to arbitration
If any suit or proceeding be brought in any of the courts
of the United States upon any issue referable to arbitration
under an agreement in writing for such arbitration, the
court in which such suit is pending, upon being satisfied
that the issue involved in such suit or proceeding is referable
to arbitration under such an agreement, shall on applica-
tion of one of the parties stay the ‘al of the action until
such arbitration has been had in accordance with the terms
of the agreement, providing the applicant for the stay is not
in default in proceeding with such arbitration.
(July 30, 1947, ch. 392, 61 Stat. 670.)
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Statutory Provisions Involved
§ 4. Failure to arbitrate under agreement; petition
to United States court having jurisdiction for
order to compel arbitration; notice and service
thereof; hearing and determination
A party aggrieved by the aileged failure, neglect, or re-
fusai of another to arbitrate under a written agreement for
arbitration may petition any United States district court
which, save for such agreement, would have jurisdiction
under title 28, in a civil action or in admiralty of the subject
matter of a suit arising out of the controversy between the
parties, for an order directing that such arbitration proceed
in the manner provided for in such agreement. Five days’
notice in writing of such application shall be served upon
the party in default. Service thereof shall be made in the
manner provided by the Federal Rules of Civil Procedure.
The court shall hear the parties, and upon being satisfied
that the making of the agreement for arbitration or the
failure to comply therewith is not in issue, the court shall
make an order directing the parties to proceed to arbitra-
tion in accordance with the terms of the agreement. The
hearing and proceedings, under such agreement, shall be
within the district in which the petition for an order direct-
ing such arbitration is filed. If the making of the arbitra-
tion agreement or the failure, neglect, or refusal to perform
the same be in issue, the court shall proceed summarily
to the trial thereof. If no jury trial be demanded by the
party alleged to be in default, or if the matter in dispute
is within admiralty jurisdiction, the court shall hear and
determine such issue. Where such an issue is raised, the
party alleged to be in default may, except in cases of ad-
miralty, on or before the return day of the notice of applica-
tion, demand a jury trial of such issue, and upon such de-
mand the court shall make an order referring the issue
D3 :
Statutory Provisions Involved
or issues to a jury in the manner provided by the Federal
Rules of Civil Procedure, or may specially call a jury
for that purpose. If the jury find that no agreement in writ-
ing for arbitration was made or that there is no default
in proceeding thereunder, the proceeding shall be dismissed.
If the jury find that an agreement for arbitration was made
in writing and that there is a default in proceeding there-
under, the court shall make an order summarily directing
the parties to proceed with the arbitration in accordance
with the terms thereof.
TITLE 42 OF THE UNITED STATES CODE
§ 2000e-5. Enforcement provisions
(a) Power of Commission to prevent unlawful employment
practices
The Commission is empowered, as hereinafter provided,
to prevent any person from engaging in any unlawful em-
ployment practice as set forth in section 2000e-2 or 2000e-3
of this title.
(b) Charges by persons aggrieved or member of Commis-
sion of unlawful employment practices by employers,
etc.; filing; allegations; notice to respondent; contents
of notice; investigation by Commission; contents of
charges; prohibition on disclosure of charges; deter-
mination of reasonable cause; conference, conciliation,
and persuasion for elimination of unlawful practices;
prohibition on disclosure of informal endeavors to end
unlawful practices; use of evidence in subsequent pro-
ceedings; penalties for disclosure of information; time
for determination of reasonable cause
Whenever a charge is filed by or on behalf of a person
claiming to be aggrieved, or by a member of the Commis-
sion, alleging that an employer, employment agency, labor
organization, or joint labor-management committee con-
D4
: Statutory Provisions Involved
trolling apprenticeship or other training or retraining, in-
cluding on-the-job training programs, has engaged in an
unlawful employment practice, the Commission shall serve
a notice of the charge (including the date, place and circum-
stances of the alleged unlawful employment practice) on
such employer, employment agency, labor organization, or
joint labor-management committee (hereinafter referred
to as the “respondent” within ten days, and shall make an
investigation thereof. Charges shall be in writing under
oath or affirmation and shall contain such information and
be in such form as the Commission requires. Charges shall
not be made public by the Commission. If the Commission
determines after such investigation that there is not reason-
able cause to believe that the charge is true, it shall dismiss
the charge and promptly notify the person claiming to be
aggrieved and the respondent of its action. In determining
whether reasonable cause exists, the Commission shall
accord substantial weight to final findings and orders made
by State or local authorities in proceedings commenced
under State or local law pursuant to the requirements of
subsections (c) and (d) of this section. If the Commission
determines after such investigation that there is reasonable
cause to believe that the charge is true, the Commission
shall endeavor to eliminate any such alleged unlawful em-
ployment practice by informal methods of conference, con-
ciliation, and persuasion. Nothing said or done during and
as a part of such informal endeavors may be made public
by the Commission, its officers or employees, or used as
evidence in a subsequent proceeding without the written
consent of the persons concerned. Any person who makes
public information in violation of this subsection shall be
fined not more than $1,000 or imprisoned for not more than
one year, or both. The Commission shall make its deter-
D5
Statutory Provisions Involved
mination on reasonable cause as promptly as possible and,
so far as practicable, not later than one hundred and twenty
days from the filing of the charge or, where applicable under
subsection (c) or (d) of this section, from the date upon
which the Commission is authorized to take action with
respect to the charge.
(c) State or local enforcement proceedings; notification of
State or local authority; time for filing charges with
Commission; commencement of proceedings
In the case of an alleged unlawful employment practice
occurring in a State, or political subdivision of a State,
which has a State or local law prohibiting the unlawful
employment practice alleged and establishing or authorizing
a State or local authority to grant or seek relief from such
practice or to institute criminal proceedings with respect
thereto upon receiving notice thereof, no charge may be
filed under subsection (a)* of this section by the person
aggrieved before the expiration of sixty days after proceed-
ings have been commenced under the State or local law,
unless such proceedings have been earlier terminated, pro-
vided that such sixty-day period shall be extended to one
hundred and twenty days during the first year after the
effective date of such State or local law. If any requirement
for the commencement of such proceedings is imposed by
a State or local authority other than a requirement of the
filing of a written and signed statement of the facts upon
which the proceeding is based, the proceeding shall be
deemed to have been commenced for the purposes of this
subsection at the time such statement is sent by registered
mail to the appropriate State or local authority.
‘So in original. Probably should be subsection “(b)”.
D6
Statutory Provisions Involved
(d) State or local enforcement proceedings; notification
of State or local authority; time for action on charges
by Commission
In the case of any charge filed by a member of the Com-
mission alleging an unlawful employment practice occurring
in a State or political subdivision of a State which has a
State or local law prohibiting the practice alleged and
establishing or authorizing a State or local authority to
grant or seek relief from such practice or to institute crim-
inal proceedings with respect thereto upon receiving notice
thereof, the Commission shall, before taking any action
with respect to such charge, notify the appropriate State
or local officials and, upon request, afford them a reasonable
time, but not less than sixty days (provided that such sixty-
day period shall be extended to one hundred and twenty
days during the first year after the effective day of such
State or local law), unless a shorter period is requested,
to act under such State or local law to remedy the practice
alleged.
(e) Time for filing charges; time for service of notice of
charge on respondent; filing of charge by Commission
with State or local agency
A charge under this section shail be filed within one
hundred and eighty days after the alleged unlawful employ-
ment practice occurred and notice of the charge (including
the date, place and circumstances of the alleged unlawful
employment practice) shall be served upon the person
against whom such charge is made within ten days there-
after, except that in a case of an unlawful employment
practice with respect to which the person aggrieved has
initially instituted proceedings with a State or local agency
with authority to grant or seek relief from such practice or
to institute criminal proceedings with respect thereto upon
D7
Statutory Provisions Involved
receiving notice thereof, such charge shall be filed by or on
behalf of the person aggrieved within three hundred days
after the alleged unlawful employment practice occurred,
or within thirty days after receiving notice that the State
or local agency has terminated the proceedings under the
State or local law, whichever is earlier, and a copy of such
charge shall be filed by the Commission with the State or
local agency.
(f) Civil action by Commission, Attorney General, or per-
son aggrieved; preconditions; procedure; appointment
of attorney; payment of fees, costs, or security; inter-
vention; stay of Federal proceedings; action for appro-
priate temporary or preliminary relief pending final
disposition of charge; jurisdiction and venue of United
States courts; designation of judge to hear and deter-
mine case; assignment of case for hearing; expedition
of case; appointment of master
(1) If within thirty days after a charge is filed with the
Commission or within thirty days after expiration of any
period of reference under subsection (c) or (d) of this
section, the Commission has been unable to secure from
the respondent a conciliation agreement acceptable to the
Commission, the Commission may bring a civil action
against any respondent not a government, governmental
agency, or political subdivision named in the charge. In the
case of a respondent which is a government, governmental
agency, or political subdivision, if the Commission has been
unable to secure from the respondent a conciliation agree-
ment acceptable to the Commission, the Commission shall
take no further action and shall refer the case to the At-
torney General who may bring a civil action against such
respondent in the appropriate United States district court.
The person or persons aggrieved shall have the right to in-
tervene in a civil action brought by the Commission or the
D8
Statutory Provisions Involved
Attorney General in a case involving a government, govern-
mental agency, or political subdivision. If a charge filed
, with the Commission pursuant to subsection (b) of this
section, is dismissed by the Commission, or if within one
l hundred and eighty days from the filing of such charge or
|! the expiration of any period of reference under subsection
(c) or (d) of this section, whichever is later, the Com-
mission has not filed a civil action under this section or the
Attorney General has not filed a civil action in a case in-
volving a government, governmental agency, or political
subdivision, or the Commission has not entered into a con-
ciliation agreement to which the person aggrieved is a party,
the Commission, or the Attorney General in a case involv-
ing a government, governmental agency, or political sub-
division, shall so notify the person aggrievea and within
ninety days after the giving of such notice a civil action
may be brought against the respondent named in the charge
(A) by the person claiming to be aggrieved or (B) if such
charge was filed by a member of the Commission, by any
person whom the charge alleges was aggrieved by the al-
leged unlawful employment practice. Upon application by
the complainant and in such circumstances as the court
may deem just, the court may appoint an attorney for such
complainant and may authorize the commencement of the
action without the payment of fees, costs, or security. Upon
timely application, the court may, in its discretion, permit
the Commission, or the Attorney General in a case involv-
ing a government, governmental agency, or political sub-
division, to intervene in such civil action upon certification
that the case is of general public importance. Upon request,
the court may, in its discretion, stay further proceedings
for not more than sixty days pending the termination of
State or local proceedings described in subsection (c) or
| } —
D9
Statutory Provisions Involved
(d) of this section or further efforts of the Commission to
obtain voluntary compliance.
(2) Whenever a charge is filed with the Commission
and the Commission concludes on the basis of a preliminary
investigation that prompt judicial action is necessary to
carry out the purposes of this Act, the Commission, or the
Attorney General in a case involving a government, govern-
mental agency, or political subdivision, niay bring an action
for appropriate temporary or preliminary relief pending
final disposition of such charge. Any temporary restraining
order or other order granting preliminary or temporary
relief shall be issued in accordance with rule 65 of the
Federal Rules of Civil Procedure. It shall be the duty of
a court having jurisdiction over proceedings under this
section to assign cases for hearing at the earliest practicable
date and to cause such cases to be in every way expedited.
(3) Each United States district court and each United
States court of a place subject to the jurisdiction of the
United States shall have jurisdiction of actions brought
under this subchapter. Such an action may be brought in
any judicial district in the State in which the unlawful em-
ployment practice is alleged to have been committed, in the
judicial district in which the employment records relevant
to such practice are maintained and administered, or in
the judicial district in which the aggrieved person would
have worked but for the alleged unlawful employment
practice, but if the respondent is not found within any such
district, such an action may be brought within the judicial
district in which the respondent has his principal office.
For purposes of sections 1404 and 1406 of title 28, the
judicial district in which the respondent has his principal
office shail in all cases be considered a district in which the
action might have been brought.
.
D10
Statutory Provisions Involved
(4) It shall be the duty of the chief judge of the district
(or in his absence, the acting chief judge) in which the
case is pending immediately to designate a judge in such
district to hear and determine the case. In the event that
no judge in the district is available to hear and determine
the case, the chief judge of the district, or the acting chief
judge, as the case may be, shall certify this fact to the
chief judge of the circuit (or in his absence, the acting
chief judge) who shail then designate a district or circuit
judge of the circuit to hear and determine the case.
(5) It shall be the duty of the judge designated pursuant
to this subsection to assign the case for hearing at the
earliest practicable date and to cause the case to be in every
way expedited. If such judge has not scheduled the case
for trial within one hundred and twenty days after issue
has been joined, that judge may appoint a master pursuant
to rule 53 of the Federal Rules of Civil Procedure.
(g) Injunctions; appropriate affirmative action; equitable
relief; accrual of back pay; reduction of back pay;
limitations on judicial orders
If the court finds that the respondent has intentionally
engaged in or is intentionally engaging in an unlawful em-
ployment practice charged in the complaint, the court may
enjoin the respondent from engaging in such unlawful em-
ployment practice, and order such affirmative action as
may be appropriate, which may include, but is not limited
to, reinstatement or hiring of employees, with or without
back pay (payable by the employer, employment agency,
or labor organization, as the case may be, responsible for
the unlawful employment practice), or any other equitable
relief as the court deems appropriate. Back pay liability
shall not accrue from a date more than two years prior to
Dil
Statutory Provisions Involved
the filing of a charge with the Commission. Interim earn-
ings or amounts earnable with reasonable diligence by the
person or persons discriminated against shall operate to re-
duce the back pay otherwise allowable. No order of the
court shall require the admission or reinstatement of an
individual as a member of a union, or the hiring, reinstate-
ment, or promotion of an individual as an employee, or the
payment to him of any back pay, if such individual was
refused admission, suspended, or expelled, or was refused
employment or advancement or was suspended or dis-
charged for any reason other than discrimination on account
of race, color, religion, sex, or national origin or in viola-
tion of section 2000e-3(a) of this title.
(h) Provisions of chapter 6 of title 29 not applicable to
civil actions for prevention of unlawful practices
The provisions of chapter 6 of title 29 shall not apply
with respect to civil actions brought under this section.
(i) Proceedings by Commission to compel compliance with
judicial orders
In any case in which an employer, employment agency,
or labor organization fails to comply with an order of a
court issued in a civil action brought under this section,
the Commission may commence proceedings to compel
compliance with such order.
(j) Appeals
Any civil action brought under this section and any pro-
ceedings brought under subsection (i) of this section shall
be subject to appeal as provided in sections 1291 and 1292,
title 28.
Di2
Statutory Provisions Involved
(k) Attorney’s fee; liability of Commission and United
States for costs
In any action or proceeding under this subchapter the
court, in its discretion, may allow the prevailing party, other
than the Commission or the United States, a reasonable
attorney’s fee as part of the costs, and the Commission and
the United States shall be liable for costs the same as a
private person.
(Pub. L. 88-352, Title VII, § 706, July 2, 1964, 78 Stat.
259; Puo. L. 92-261, § 4, Mar. 24, 1972, 86 Stat. 104.)
FEDERAL RULES OF CIVIL PROCEDURE
Rule 53. Masters.
(a) Appointment and Compensation. The court in
which any action is pending may appoint a special master
therein. As used in these rules the word “master” includes
a referee, an auditor, an examiner, and an assessor. The
compensation to be allowed to a master shall be fixed by the
court, and shall be charged upon such of the parties or
paid out of any fund or subject matter of the action, which
is in the custody and control of the court as the court may
direct; provided that this provision for compensation shall
not apply when a United States magistrate is designated to
serve as a master pursuant to Title 28, U.S.C. § 636(b) (2).
The master shali not retain the master’s report as security
for the master’s compensation; but when the party ordered
to pay the compensation allowed by the court does net
pay it after notice and within the time prescribed by the
court, the master is entitled to a writ of execution against
the delinquent party.
(b) Reference. A reference to a master shall be the
exception and not the rule. In actions to be tried by a jury,
D13
Statutory Provisions Involved
a reference shall be made only when the issues are com-
plicated; in actions to be tried without a jury, save in matters
of account and of difficult computation of damages, a refer-
ence shall be made only upon a showing that some excep-
tional condition requires it. Upon the consent of the parties,
a magistrate may be designated to serve as a special master
without regard to the provisions of this subdivision.
(c) Powers. The order of reference to the master may
specify or limit the master’s powers and may direct the
master to report only upon particular issues or to do or
perform particular acts or to receive and report evidence
only and may fix the time and place for beginning and
closing the hearings and for the filing of the master’s report.
Subject to the specifications and limitations stated in the
order, the master has and shall exercise the power to regu-
late all proceedings in every hearing before the master and
to do all acts and take all measures necessary or proper
for the efficient performance of the master’s duties under
the order. The master may require the production before
the master of evidence upon all matters embraced in the
reference, including the production of all books, papers,
vouchers, documents, and writings applicable thereto. The
master may rule upon the admissibility of evidence unless
otherwise directed by the order of reference and has the
authority to put witnesses on oath and may examine them
and may call the parties to the action and examine them
upon oath. When a party so requests, the master shall make
a record of the evidence offered and excluded in the same
manner and subject to the same limitations as provided
in the Federal Rules of Evidence for a court sitting without
a jury.
D14
Statutory Provisions Involved
(d) Proceedings.
(1) Meetings. When a reference is made, the clerk shall
forthwith furnish the master with a copy of the order of
reference. Upon receipt thereof unless the order of refer-
ence otherwise provides, the master shall forthwith set a
time and place for the first meeting of the parties or their
attorneys to be held within 20 days after the date of the
order of reference and shall notify the parties or their
attorneys. It is the duty of the master to proceed with all
reasonable diligence. Either party, on notice to the parties
and master, may apply to the court for an order requiring
the master to speed the proceedings and to make the report.
If a party fails to appear at the time and place appointed,
the master may proceed ex parte or, in the master’s discre-
tion, adjourn the proceedings to a future day, giving notice
to the absent party of the adjournment.
(2) Witnesses. The parties may procure the attendance
of witnesses before the master by the issuance and service
of subpoenas as provided in Rule 45. If without adequate
excuse a witness fails to appear or give evidence, the witness
may be punished as for a contempt and be subjected to the
consequences, penalties, and remedies provided in Rules 37
and 45.
(3) Statement of Accounts. When matters of account-
ing are an issue before the master, the master may prescribe
the form in which the accounts shall be submitted and in
any proper case may require or receive in evidence a state-
ment by a certified public accountant who is called as a
witness. Upon objection of a party to any of the items thus
submitted or upon a showing that the form of statement
is insufficient, the master may require a different form of
statement to be furnished, or the accounts or specific items
D1I5
Statutory Provisions Involved
thereof to be proved by oral examination of the accounting
parties or upon written interrogatories or in such other
manner as the master directs.
(e) Report.
(1) Contents and Filing. The master shall prepare a
report upon the matters submitted to the master by the
order of reference and, if required to make findings of fact
and conclusions of law, the master shall set them forth in
the report. The master shall file the report with the clerk
of the court and in an action to be tried without a jury,
unless otherwise directed by the order of reference, shall
file with it a transcript of the proceedings and of the evi-
dence and the original exhibits. The clerk shall forthwith
mail to all parties notice of the filing.
(2) In Non-Jury Actions. In an action to be tried with-
out a jury the court shall accept the master’s findings of fact
unless clearly erroneous. Within 10 days after being served
with notice of the filing of the report any party may serve
written objections thereto upon the other parties. Applica-
tion to the court for action upon the report and upon ob-
jections thereto shall be by motion and upon notice as
prescribed in Rule 6(d). The court after hearing may
adopt the report or may modify it or may reject it in whole
or in part or may receive further evidence or may recommit
it with instructions.
(3) In Jury Actions. In an action to be tried by a jury
the master shall not be directed to report the evidence. The
master’s findings upon the issues submitted to the master
are admissible as evidence of the matters found and may be
read to the jury, subject to the ruling of the court upon
D16
Statutory Provisions Involved
any objections in point of law which may be made to the
report.
(4) Stipulation as to Findings. The effect of a master’s
report is the same whether or not the parties have consented
to the reference; but, when the parties stipulate that a
master’s findings of fact shall be final, only questions of law
arising upon the report shall thereafter be considered.
(5) Draft Report. Before filing the master’s report, a
master may submit a draft thereof to counsel for all parties
for the purpose of receiving their suggestions.
(f) A magistrate is subject to this rule only when the
order referring a matter to the magistrate expressly provides
that the reference is made under this Rule.
(As amended Feb. 28, 1966, eff. July 1, 1966; Apr. 28,
1983, eff. Aug. 1, 1983; Mar. 2, 1987, eff. Aug. 1, 1987.)
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.