Opposition Brief — Goldman, Sachs & Co. v. Utley

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In the

Supreme Court of the United States. —

OcTOBER TERM, 1989.

GOLDMAN, SACHS & CO.,

GOLDMAN SACHS MONEY MARKETS, INC.,

DAVID B. FORD anpD FRANCIS J. GAUL, JR.,

ee 4 PETITIONERS,

3 v.

is KRISTINE M. UTLEY,

e RESPONDENT.

Brief in Opposition to Petition for a Writ

ie of Certiorari to the United States Court of

e Appeals for the First Circuit.

RICHARD D. GLOVSKY

Giovsky & ASSOCIATES

31 Milk Street

Suite 810

Boston, Massachusetts 02109

(617) 423-7100

Counsel of Record for Respondent

QUESTION PRESENTED

Whether the Court of Appeals was

correct in ruling that Congress intended to

preclude even a temporary prospective

waiver of a judicial forum under Title VII

of the Civil Rights Act of 1964 ("Title

VII") and that arbitration is inherently

inconsistent with the underlying purposes

of Title VII.

TABLE OF CONTENTS

Page(s)

QUESTION PRESENTED ...... - re

TABLE OF AUTHORITIES ..... . . « S23

STATUTORY PROVISIONS INVOLVED. . +, 2

STATEMENT OF THE CASE. ... « -« a

REASONS WHY A WRIT SHOULD NOT

BE GRANTED. . ..+« «© «© © 6 8 @ & . + be

I. Introduction. .« s s ss ss = a0

II. The Court Should Not Grant

A Writ Because It Is Settled

That Title VII Claims Are Not

Subject To Compulsory

Arbitration And The Court

Of Appeals' Decision Is In

Accord With The Applicable

Decisions Of Thie Comet .. =... As

CONCLUSION . . « s «© @ 5) eee s wae

TABLE OF AUTHORITIES

Cases Page(s)

- ver,

Sue aie Se eEe@ee) « « s ee le BRRBID

Al Wi

Reynolds, Inc., 712 F.Supp. 547

Cc SD 5 5 « 0 « st AS, 24, 31

Atchi =.

v. Buell, 480 U.S. 557 (1987). 21, 22

Ba i sas-Best

Freight System, Inc.,

ec See CROOEy 6. lw ltl ltl lt 2k, 22, 23

. Ree . 26, 35

Coppinger v. Metro-North

Commuter Railroad,

861 F.2d 33 (2d Cir. 1988) . . 24

EEOC v. Cosmair, Inc.,

821 F.2d 1085 (5th Cir. 1987). 29

Gavalik .. Continental Can Co.,

812 F.2d 834 (3d Cir. 1987) . 35

Lingle v. Norge Div. of

Magic Chef, Inc.,

108 S.Ct. 1877 (1988) .... 21

West Branch,

Michigan, 466 U.S. 284 (1984). passim

-iii-

Mitsubishi Motors Corp. v. Soler

Chrysler~-Plymouth, Inc.,

473 U.S. 614 (1985) ... . . passim

Nicholson v. CPC International,

Inc., S77 F.2@ 221i

(3@ Cir. 1989) . . «. « « « «© « 24, 28

Rich v. Martin Marietta,

522 F.2d 333, 343-344

te ee ree

Rodriguez De Quijas v. Shearson/

American Express, Inc.,

109 S.Ct. 1917 (1989) : ae '@ Re Bee

ss .« « Bee wa

Shearson/American Express, Inc.

v. McMahon, 482 U.S. 220

(1967) 6 6 oe et 6 ee ec ee Ss ee

Swenson v. Management Recruiters

International, Inc., 858 F.2d

1304 (8th Cir. 1988), reh'g

denied, 872 F.2d 264 (1989),

cert. denied, 110 S.Ct. 143

Gee 4 a ek kee Ue tee

— + * a e's ate es 6 8 Oe ee

Utley v. Goldman, Sachs & Co.,

883 F.2d 184 (lst Cir. 1989) . passim

Statutes

Federal Arbitration Act,

9 U.8.C. §2 et. GO@G@. . + + + ss BRE

18

24

15 U.S.C. §1 et. seq.

(anti-trust law) .....

Securities Act of 1933,

15 U.S.C. §77a et. seq.

Securities Act of 1934,

15 U.S.C. §78a et. seq. ..

Racketeer Influenced and

Corrupt Organization Act,

18 U.S.C. §1961 et. seq. .

Fair Labor Standards Act

of 1938, 29 U.S.C. §201

OCs Gils. 4 <5. s-i6 2 5 6 6 we S

Age Discrimination in

Employment Act of 1967,

29 U.S.C. §621 et seq.

Employee Retirement Income

Security Act of 1974,

29 U.S.C. §1001 et seq. °

Title VII of the Civil Rights

Act of 1964, as amended,

42 U.S.C. §2000e-1 et. seq.

42 U.S.C. §2000e-5(f)(5) ..

-42 U.S.C. §1983..

Mass. Gen. L.

Gu. BO, G225 «© «© wo we ew oe ss

G. BOAR «© « 6s ew we eo oe 6

-V-

24

23

23

23, 24

23

24

24, 25

passim

36

24, 35

Legislative Materials

1971 Hearings 48, 125, 208,

238 . . >. . . — >. . >. . >. >. . 21

H.R. Rep. No. 238, at 1-13... 21

S. Rep. No. 415 at 23-24 .... 21

118 Cong. Rec. S. 2301

(daily ed. Feb. 22, 1972) .. 21

Rules

Rules of the Supreme Court of

the United States

Rule 17 .« « «© © © © © © 80 0 ce AD

eo ee © © © we wo oc eo 8 BG,

Rule 17.1(a) . . . « «© «© « « « 14

Rule 17.1(G) . « « « «© «© « © « BG,

Rule 21.2(@) . . «© «© =» eee &@

Federal Rules of Civil Procedure

Rule $3 ..«-eseseeneenenenes By

New York Stock Exchange, Inc.

Rule 601 et seq., 2 New York

Stock Exchange Guide (CCH)

G 2601 et seq. ... +. +. « « 26,

13 J. Moore, H. Bendix & B. Ringle

Moore's Federal Practice

g817.41, (1988) ° . . . . . . 16

Sape & Hart, Title VII

,

40 Geo. Wash. L. Rev. 824

(1972) . . . . . *. . >. . . >. . 20,

-vi-

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1989

No. 89-802

GOLDMAN, SACHS & CO.,

GOLDMAN SACHS MONEY MARKETS, INC.,

DAVID B. FORD and FRANCIS J. GAUL, JR.,

Petitioners

- against -

KRISTINE M. UTLEY,

Respondent

BRIEF IN OPPOSITION TO PETITION FOR A WRIT

OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FIRST CIRCUIT

Respondent Kristine M. Utley ("Ms.

Utley"), plaintiff below, respectfully

opposes the petition for a writ of

certiorari to the United States Court of

Appeals for the First Circuit (the “Court

of Appeals"), filed by petitioners Goldman,

Sachs & Co. ("Goldman Sachs"), Goldman

Sachs Money Markets Inc. ("GSMMI"), David

B. Ford ("Ford") and Francis J. Gaul, Jr.

("Gaul") (collectively referred to as the

"“petitioners"), defendants below.

STATUTORY PROVISIONS INVOLVED

Ms. Utley disagrees that Rule 53 of

the Federal Rules of Civil Procedure is a

statutory or regulatory provision involved

in this case within the meaning of Rule

21.2(f) of the Rules of the Supreme Court

of the United States. Ms. Utley otherwise

agrees with petitioners' statement of the

statutory provisions involved.

STATEMENT OF THE CASE

Ms. Utley began her employment with

Goldman as a sales asscciate on or about

July 8, 1985. On or about February 10,

1986, she was assigned to the Money Market

Department ("Department") of the Fixed

Income Division ("Division") of the Boston

office of GSMMI, where she was the only

woman sales associate in the Department.

Her employment was abruptly terminated on

the eve of Thanksgiving, November 25,

1987.

During her tenure in the Department,

Ms. Utley contends that the working

environment to which the she was subjected

was hostile, intimidating and sexist.

Materials which demean and disparage women

were circulated through the Division.

These materials included announcements with

photographs of women exposing naked breasts

substituted for the actual pictures of new

female employees.

On or about November 12, 1987, Ms.

Utley was asked by petitioner Gaul to

consider a transfer to New York, even

though any one of the men in Ms. Utley's

department was at least equally qualified

to fulfill the responsibilities of the job

to which she was asked to consider being

transferred. Subsequently, Gaul told Ms.

Utley that the fact that she handled some

of the Hartford-based accounts being

transferred to New York was of only

"slight" importance in the decision to ask

her to transfer her to New York.

Gaul thereafter announced at a staff

meeting, without previously asking anyone

else to transfer to New York, that Ms.

Utley would likely be moving to New York;

Ms. Utley informed the petitioners that she

did not wish to be transferred, and

requested that they find another solution.

Ms. Utley believes she was singled out for

transfer on the basis of her sex. Upon

information and belief, soon after Ms.

Utley was terminated, Goldman hired two

male sales associates to be assigned to the

Boston office Fixed Income Division. Ms.

Utley maintains she could easily have been

reassigned to one of the positions being

filled by the two male sales associates

hired soon after her termination.

After both Ms. Utley and Goldman had

engaged counsel with regard to her claims

of discrimination, petitioners unlawfully

pressured Ms. Utley to speak to the

petitioners directly regarding these

matters. Despite Ms. Utley's objections to

discussing the proposed transfer without

her counsel present, petitioner Ford

insisted on speaking with her, and did so

on November 25, 1987. During this

conversation, Ford abruptly terminated Ms.

Utley.

As a condition of her employment with

Goldman, Ms. Utley was required to register

with the New York Stock Exchange ("NYSE")

as a General Securities Representative. In

particular, Ms. Utley was required to, and

did, execute a "Uniform Application for

Securities Industries Registration or

Transfer" ("Form U-4") soon after starting

her employment with Goldman. The

petitioners allege that Ms. Utley was

required to, and did, execute a second Form

U-4 when she began her employment with

GSMMI.

_—— <=

On the last page of the Form U-4,

buried in small print, there is a clause

which reads as follows:

I agree to arbitrate any dispute,

claim or controversy that may arise

between me and my firm, or a customer,

or any other person 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.

Item 10 of the "second" Form U-4 requests

registration with the NYSE and other self-

regulatory organizations ("SRO").

On November 27, 1987, Ms. Utley filed

a complaint with the Massachusetts

Commission Against Discrimination and the

Equal Employment Opportunity Commission

alleging sexual harassment and sex

discrimination.

On December 6, 1987, Ms. Utley filed a

complaint in Massachusetts Superior Court,

in the County of Suffolk. The Complaint

consisted of eight counts, including

allegations relating to sexual harassment

and discrimination in violation of G.L.M.

c. 151B and of G.L.M. c. 12 §11I; and

wrongful termination. Petitioners moved to

dismiss, or alternatively to stay the

proceedings on the ground that Ms. Utley

allegedly agreed to arbitrate her claims in

accordance with the Constitution, Rules and

By-Laws of the New York Stock Exchange.

The petitioners' motion was denied by the

Massachusetts Superior Court. On May 26,

1989, after remand from the Appeals Court

of Massachusetts, the Massachusetts

Superior Court entered an order granting

petitioners' Motion to Stay with respect to

Ms. Utley's common law claims and denying

the motion with respect to her state

— ==

statutory discrimination and civil rights

claims.

On March 22, 1988 Ms. Utley received a

Notice of Right to Sue from the EEOC.

Thereafter, on April 5, 1988, Ms. Utley

filed this federal court action against the

petitioners under Title VII of the Civil

Rights Act as amended, 42 U.S.C. §2000e-1

et. seq. ("Title VII").

On April 26, 1988, the petitioners

filed a Motion for a Stay in which they

requested the District Court to stay Ms.

Utley's federal court action pending

arbitration. The District Court by a

Memorandum and Order dated January 17, 1989

denied petitioner's Motion For a Stay. The

District Court concluded that the Supreme

Court's decision in Alexander v. Gardner-

Denver, 415 U.S. 36 (1973), compelled the

decision that Title VII claims are not

arbitrable.

On February 3, 1989, the petitioners

appealed the District Court's decision to

the United States Court of Appeals for the

First Circuit. On August 23, 1989, the

Court of Appeals affirmed the decision of

the District Court. The Court of Appeals

held that "Congress intended to preclude

even a temporary waiver of a judicial

forum." Utley v. Goldman Sachs & Company,

et al, 883 F.2d 184, 187 (1989). In

addition, the Court of Appeals held that

the "District Court acted within its

discretion when it declined to stay this

action pending resolution of the State

Court proceedings." Id. at 187.

The Court of Appeals recognized that

in Alexander v. Gardner-Denver Co., 415

-10<

U.S. 36, this Court ruled that “arbitration

agreements do not preclude an independent

right to access to a judicial forum for

resolution of Title VII claims." Utley,

883 F.2d at 186. Moreover, the Court of

Appeals found that Alexander had not been

disturbed by such of this Court's decisions

under the Federal Arbitration Act, 9 U.S.C.

§l1 et seq. ("FAA") following Alexander as

Mitsubishi Motors Corp. v. Soler Chrysler-

Plymouth, Inc., 473 U.S. 614 (1985),

Shearson/American Express, Inc. v. McMahon,

482 U.S. 220 (1987), and Rodriguez De

ess, Inc.,

109 S.Ct. 1917 (1989). 883 F.2d at 186.

Rather, the Court of Appeals noted that

none of these decisions involved

discrimination claims. Id. at 186.

allie

Furthermore, the Court of Appeals

noted that this Court's decisions involving

the FAA recognize that the presumption of

arbitrability under the FAA is "defeated

when it is ‘overridden by a contrary

congressional command'. Id. at 186

(quoting Shearson, 482 U.S. at 226. The

Court of Appeals concluded that Congress

had expressed just such an intent with

regard to Title VII. In particular, the

Court of Appeals found, in the words of

Alexander, that Congress had made the

policy against discrimination a “highest

priority." Id. at 187. Further, the Court

of Appeals found that Title VII ‘involved

the adjudication of the rights of an

individual under the constitution, an

inquiry that, with all due respect to

arbitration, has historically been the sole

ai 2<

in ———i

province of Article III adjudication. Id.

at 187 (citation omitted).

Finally, the Court of Appeals

concluded that Alexander was not limited to

situations involving collective bargaining

agreements. Id. at 187. In shert, the

Court of Appeals concluded that neither

Alexander nor this Court's decisions under

the FAA required an employee to go to

arbitration before going to Court. Id. at

187.

REASONS WHY A WRIT

SHOULD NOT BE GRANTED

I. INTRODUCTION.

Rule 17 of the Rules of the Supreme

Court states that "review on writ of

certiorari is not a matter of right, but of

judicial discretion, and will be granted

oa} 30

only when there are special and important

reasons therefor." Sup. Ct. R. 17.1. Rule

17 goes on to enumerate several reasons,

not exclusive, for which this Court will

grant a writ of certiorari. Only three of

these reasons could conceivably apply to

the instant case: (1) a conflict between

the Federal Courts of Appeals, Sup. Ct. R.

17.1(a); (2) an important and unsettled

question of federal law, Sup. Ct. R.

17.1(c); or (3) a conflict with applicable

decisions of the Supreme Court, Sup. Ct.

R. 17.1(c).

Here, as the petitioners admit, there

is no conflict between the federal courts

of appeals on the question presented (i.e.,

whether Congress intended to preclude a

waiver of a judicial forum for Title VII

claims). in fact, the only other federal

a) 4

court of appeals to directly confront the

question reached the same conclusion as the

court of appeals in the instant case.

Swenson v. Management Recruiters

International, Inc., 858 F.2d 1304, 1307

(8th Cir. 1988) reh'g denied 872 F.2d 264

(1989), cert. denied, 110 S.Ct. 143

(1989) .1

The petition does not present an

unsettled question of federal law. See, S.

Ct. R. 17.1(c). While the question of the

arbitrability of Title VII claims is an

important one, in order to meet the

standard set forth in Rule 17.1(c), the

. In addition, it is worth noting that

the only United States District Court,

other than the United States District

Court for the District of Massachusetts

in this case, to directly confront this

issue also reached the same conclusion

as the Court of Appeals in the instant

case. See Alford v. Dean Witter Reynolds,

Inc., 712 F.Supp. 547, 549 (S.D. Tex.

1989) (Title VII claims are not subject

to compulsory arbitration).

=} $<

question of law presented by a petition

should also be one of first impression

which has not been, but should be, settled

by this Court. See, 13 J. Moore, H.

Bendix, and B. Ringle, Moore's Federal

Practice, 9817.41 (1988). The question

presented in the instant case, however, has

already been settled by this Court in

Alexander. In Alexander, this Court held

that Congress intended to preclude a waiver

of judicial remedies for Title VII claims.

415 U.S. at 51-52. Moreover, while the

Court in Alexander did not directly

confront the issue of whether an employee

can be compelled to arbitrate in the first

instance, it is a clear inference from this

Court's opinion in Alexander that an

employee cannot be so compelled. [Id. at

49, 55, 59-60. In addition, despite

-16-

petitioners' assertions to the contrary,

the Alexander decision was not limited to

situations involving collective bargaining

agreements. The well-springs of the

Alexander decision were not the

reculiarities of the collective bargaining

setting, but rather the Congressional

intent to preclude a prospective waiver of

a judicial forum for Title VII claims, and

the relative inadequacy of the arbitral

forum to decide such matters. Id. at 5l-

and 56.

Finally, as related above, the Court

of Appeals' decision does not conflict with

this Court's decisions under the FAA

subsequent to Alexander, none of which

involved discrimination claims. See, e.g.,

Rodriguez De Quijas, 109 S.Ct. 1917;

’ McMahon, 482 U.S. 220; and Mitsubishi, 472

al?ea

U.S. 614. Furthermore, this Court's

decisions under the FAA have all recognized

that the presumption favoring arbitration

under the FAA can be overridden as to

statutory claims where Congress has evinced

an intent to preclude the waiver of a

judicial forum or when there is an inherent

conflict between the policy underlying the

statutory claims and the policy favoring

arbitration. See, Mitsubishi, 473 U.S. at

627-628; McMahon, 482 U.S. at 226; and

Rodriguez De Quijas, 109 S.Ct. at 1921. As

stated above, in Alexander, this Court

found just such an intent on the part of

Congress and just such a conflict between

the policy underlying Title VII and the

policy favoring arbitration.

a1G~e

a

Thus, the petitioners have failed to

meet the standard for granting certiorari

under Rule 17.

II. THE COURT SHOULD NOT GRANT A WRIT

BECAUSE IT IS SETTLED THAT TITLE VII

CLAIMS ARE NOT SUBJECT TO COMPULSORY

ARBITRATION AND THE COURT OF APPEALS'

DECISION IS IN ACCORD WITH THE

P SIONS OURT.

Although petitioners attempt to

enlarge the issue in this case to encompass

statutory remedies other than Title VII,

the question before this Court is whether

the Court of Appeals correctly applied this

Court's decisions in concluding that Title

VII claims are not subject to compulsory

arbitration. Ms. Utley submits that the

Court of Appeals correctly construed this

Court's decision in Alexander as well as

its decisions under the FAA in concluding

that Title VII claims are not subiect to

compulsory arbitration.

o19-

Petitioners acknowledge that the

proper test to be applied in determining

whether an arbitration agreement will be

held to cover statutory remedies is whether

Congress has evinced an intent to preclude

the waiver of judicial remedies for the

statutory rights at issue or whether there

is an inherent conflict between the policy

underlying the statutory claims and the

policy favoring arbitration. Mitsubishi,

473 U.S. at 627-628; and McMahon, 482 U.S.

at 227.

Ample authority exists for the

proposition that Congress intended to

preclude a waiver of judicial remedies for

violations of Title VII. Alexander, 415

U.S. at 51-52; Swenson, 858 F.2d at 1305.

See, also, Sape & Hart, Title VII

Reconsidered: The Equal Opportunity Act of

206

1972, 40 Geo. Wash. L. Rev. 824, 879, text

and notes 356-357 (1972) (citing to 1971

Hearings 48, 125, 208, 238; H.R.Rep. No.

238, at 11-13; S. Rep. No. 415, at 23-24;

and 118 Cong. Rec. .S.2301 (daily ed. Feb.

22, 1972)).

This Court has recently reaffirmed the

principle that individuals should not be

barred from bringing claims under federal

statutes designed to protect civil rights.

In Lingle v. Norge Div. of Magic Chef,

Inc., 108 S.Ct. 1877, 1884 (1988), the

Court, quoting from Atchison, T. & S.F.R.

Co. v. Buell, 480 U.S. 557, 564-565 (1987)

said:

"This Court has, on numerous

occasions, declined to hold that

individual employees are, because of

the availability of arbitration,

barred from bringing claims under

federal statutes. See, e.g., McDonald

v. West Branch, 466 U.S. 284 [104

S.Ct. 1799, 80 L.Ed.2d 302] (1984);

Barrentine v. Arkansas-Best Freight

System, Inc., 450 U.S. 728 [101 S.Ct.

=2}..

1437, 67 L.E@.2d 641] (1981);

Alexander v. Gardner-Denver Co., 415

U.S. 36 [94 S.Ct. 1011, 39 L.Ed.2d

147} (1974). Although the analysis of

the question under each statute is

quite distinct, the theory running )

through these cases is that

notwithstanding the strong policies |

encouraging arbitration, 'different i

considerations apply where the

employee's claim is based on rights

axisindout of -a_statute designed to

rov s ees

to individual workers. Rarrentine.

supra, 450 U.S. at 737 [101 S.Ct. at

1443])." Atchison, T. & S.F.R. Co. v.

Buell, 480 U.S. —.,., —». 107 S.Ct.

1410, 1415, 94 L.Ed.2d 563 (1987)

(emphasis added).

Petitioners' position seems to leave no

room to find any statutory rights exempt

from compulsory arbitration. Clearly, this

position is untenable and is in itself in

conflict with this Court's decisions.

In fact, Ms. Utley contends that,

taken as a whole, this Court's rulings draw

a distinction between claims based upon

statutes protecting individual rights and

Claims based upon business or purely

commercial transactions. Thus, in cases

involving individual rights, the Court has

found a Congressional intent to preclude

waiver of judicial remedies. Barrentine v.

Arkansas - Best Freight Systems, 450 U.S.

728 (1981) (Fair Labor Standards Act of

1938, 29 U.S.C. §201 et. seq.); ald v.

City of West Branch, Michigan; 466 U.S. 284

(1984) (claims under 42 U.S.C. §1983); and

Alexander v. Gardner-Denver. Compare,

Rodriguez De Quijas, 109 S.Ct. 1917

(dispute between investors and brokerage

firm under Securities Act of 1933, 15

U.S.C. §77 et. seq.); McMahon, 482 U.S.

220 (dispute between investors and

brokerage firm under Securities Act of

1934, 15 U.S.C. §78a et. seq. and Racketeer

Influenced and Corrupt Organizations Act

("RICO"), 18 U.S.C. §1961 et. seg.); and

Mitsubishi, 473 U.S. 614 (anti-trust

dispute under federal anti-trust laws, 15

U.S.C. §1 et. seq.). The Courts of Appeals

and District Courts have made a similar

distinction. Nicholson v. CPC

International, Inc., 877 F.2d 221 (3d Cir.

1989) (Age Discrimination in Employment

Act, 29 U.S.C. §621 et. seq. claim);

Coppinger v. Metro-North Commuter Railroad,

861 F.2d 33 (2d Cir. 1988) (42 U.S.C.

§1983 claim); Swenson v. Management

Recruiters International, Inc., 858 F.2d

1304 (8th Cir. 1988) (Title VII claims);

and Alford v. Dean Witter Reynolds, Inc.,

712 F.Supp. 547 (S.D.Tex. 1989) (Title VII

claims). Compare, Arnulfo P. Sulit v. Dean

Witter Reynolds, Inc. 847 F.2d 475 (8th

Cir. 1988) (Employment Retirement Income

-24<

Security Act of 1974, 29 U.S.C. §1001 et

seq. claim).2 In short, "[{d]iscrimination

and civil rights legislation have

traditionally been viewed differently than

purely private economic disputes."

Swenson, 858 F.2d at 1306. In addition,

the Court of Appeals for the First Circuit

was correct in finding that under the

second prong of the Mitsubishi and McMahon

test, there is an inherent conflict between

the underlying purposes of Title VII and

the policy of the FAA favoring arbitration.

The Supreme Court in Alexander discussed at

length the reasons why arbitration is an

inappropriate forum for resolving Title VII

Claims. 415 U.S. at 56-58; see, also,

¢ Ms. Utley notes that this Court was

recently presented with the same issue

presented in this case in a Petition For

a Writ of Certiorari filed by Management

Recruiters in the Swenson case. This

Court denied certiorari in Swenson.

110 S.Ct. 143 (1989).

=2$~<

McDonald, 466 U.S. at 290-91; Barrentine,

450 U.S. at 743-45. While some of the

reasons expressed by the Court in Alexander

apply only to grievance arbitration under a

collective bargaining agreement, serious

concerns evinced by the Court apply as well

to the arbitration of employment

discrimination disputes before the New York

Stock Exchange.

For example, in Alexander the Court

noted that “the fact finding process in

arbitration usually is not equivalent to

judicial fact finding." 415 U.S. at 57.

In this case, Ms. Utley's claims would be

arbitrated under rules applicable to the

securities industry. The New York Stock

Exchange Rules reveal that there is limited

discovery, the usual rules of evidence do

-26-

not apply, no record is kept unless

requested by the parties, and written

reasons for a decision need not be given.

New York Stock Exchange, Inc., Rule 601 et.

seq., 2 New York Stock Exchange Guide (CCH)

q2601 et. seq. The restrictions on

discovery, including the fact that there is

no provision for depositions, are

particularly detrimental to a claimant's

ability to prove an employment

discrimination claim where the information

necessary to prove a case is often in the

hands of the employer. See, e.g., Rich v.

Martin Marietta, 522 F.2d 333, 343-344

(10th Cir. 1975). Also, the relief

available from an arbitral panel convened

by the New York Stock Exchange does not

include equitable relief, the availability

of which is an essential part of the

remedial scheme under Title VII. Cf£.,

Nicholson, 877 F.2d at 228. Nor can a

Claimant under the New York Stock Exchange

arbitration rules recover attorney's fees,

which are an essential component of Title

VII's enforcement scheme. Furthermore, the

availability of a judicial forum is

particularly important for statutes like

Title VII, which concern public as well as

private interests. Title VII suggests that

a public forum is an appropriate arena for

the judicial scrutiny of issues such as

those raised by this case. Judicial

construction is necessary because statutory

language frequently can be given meaning

only by reference to public law concepts.

Alexander 415 U.S. at 57. A judicial forum

-28-

is also important to insure that the public

interest in eliminating discrimination is

given proper consideration. 3 In addition to

the above, only limited review of the

arbitral panel's decision is available, and

there is no anti-discrimination policy

found in the Rules of the New York Stock

Exchange. In sum, there is an inherent

conflict between the purposes underlying

Title VII and the policy favoring

arbitration under the FAA. See,

Mitsubishi, 473 U.S. at 627-628; and

3 '

Further, construing a pre-dispute

arbitration agreement to mandate arbitra-

tion of Title VII claims will have the

effect of discouraging claimants from

filing charges with the EEOC. Any pro-

cedure that inhibits the filing of

charges undermines the purpose of Title

VII to eliminate unlawful discrimination

since the charge not only informs the

EEOC of the particular discrimination,

but also may identify other unlawful

practices. See, EEOC v. Cosmair, Inc.,

821 F.2d 1085, 1090 (5th Cir. 1987).

-29-

McMahon, 482 U.S. at 226. Title VII claims

are not, therefore, subject to compulsory

arbitration.

Petitioners try to draw a distinction

between arbitration pursuant to a

collective bargaining agreement and

arbitration pursuant to an individual

agreement. This distinction, however, is

not born out either by this Court's

decision in Alexander or its decisions

under the FAA. First, the motive force

behind the Alexander decision was not the

peculiarities of grievance arbitration

underlying a collective bargaining

agreement, but rather what this Court found

to be the Congressional intent to preclude

a prospective waiver of a judicial forum

for Title VII claims, and the comparative

-30-

inadequacy of the arbitral forum to decide

them. Jd. at 5i-52, 56. As this Court

stated in McDonald v. City of West Branch:

"rOjur rejection of a deferral

rule in Gardner-Denver was based in

large part on our conclusion that

Congress intended the [statute] at

issue in [Gardner-Denver] to be

judicially enforceable and that

arbitration could not provide an

adequate substitute for judicial

proceedings in adjudicating claims

under [Title VII}.

Id. at 285. See, also, Swenson, 858 F.2d

at 1306; and Alford, 712 F.Supp. at 549.

Furthermore, contrary to the

petitioners' position, this Court's

decisions under the FAA actually bolster

the conclusion that the distinction the

petitioners attempt to draw between

collective bargaining agreements and

“individually-accepted" arbitration

agreements is an invalid one. This Court's

FAA decisions all recognize an exception to

@3ie-

the presumption of arbitrability with

regard to statutory claims manifesting a

Congressional intent to preclude the waiver

of a judicial forum. Mitsubishi, 473 U.S.

at 627-628; Shearson/American Express, Inc.

v. McMahon, 482 U.S. at 226-227; and

Rodriguez De Quijas, 109 S.Ct. at 1921.

Therefore, unless it is found that the

Congressional intent to preclude such a

waiver is limited to a situation involving

collective bargaining agreements, the rule

of non~-arbitrability must apply equally to

all claimants without regard to the

existence of a collective bargaining

agreement. The inquiry in each instance

must be whether "Congress wanted the

substantive protection afforded by a given

statute to include protection against

waiver of a judicial forum, [an] intention

-32-

RANT be in a

that will be deducible from text or

legislative history." Mitsubishi, 473 U.S.

at 628. In Alexander, this Court

concluded with respect to Title VII claims,

that there was just such a Congressional

intent deducible from both the text and

legislative history of Title VII. Id. at

51-52. Moreover, there is no indication in

Alexander or elsewhere that the

Congressional intent expressed in Title VII

to preclude a prospective waiver of a

judicial forum is limited to employees

under a collective bargaining agreement.

Finally, petitioners argue that the

Court of Appeals misconstrued Alexander by

not finding that under Alexander Ms. Utley

should at least be required first to

exhaust the arbitration process before she

=33@

may pursue her Title VII claims ina

judicial forum. Reading Alexander in the

manner urged by petitioners, however,

misconstrues not only the Alexander opinion

but the Mitsubishi test as well. In

Alexander, this Court carefully couched its

language with respect to an employee going

to arbitration before commencing a lawsuit

in terms such as "permissive" or

atk,

"elective". Id. at 49, 55, 59-60.

Moreover, under Mitsubishi, this Court

opined that if a Court finds a

Congressional intent to preclude a waiver

of a judicial remedy under Title VII, then

the Title VII claim is outside the scope of

an agreement to arbitrate and not subject

to arbitration. See, McDonald v. City of

West Branch, Michigan, 466 U.S. at 290-292

=34-

(text and n.11). See also, Gavalik v.

Continental Can Co., 812 F.2d 834, 850 and

n.30 (3d Cir. 1987). In McDonald, the

Court held that:

although arbitration is well-suited to

resolving contractual disputes, our

decisions in Barrentine and Gardner-

Denver compel the conclusion that it

cannot provide an adequate substitute

for a judicial proceeding in

protecting the federal statutory and

constitutional rights that §1983 is

designed to safeguard. 466 U.S. at

290.

In McDonald, the Court also cited

Alexander v. Gardner-Denver as holding that

the rights conferred by Title VII can form

"no part of the collective bargaining

process" since waiver of these rights would

defeat the paramount Congressional purpose

behind Title VII. 466 U.S. at 292 (n.12),

citing Alexander, 415 U.S. at 51. Thus,

while the legislative history and text of

Title VII certainly support the principle

that the administrative agency charged with

=35-

enforcing Title VII should highlight

conciliation and informal resolution, it

requires a quantum leap to suggest that it

mandates exhaustion of arbitration before

the NYSE in order for a victim of

discrimination to pursue her Title VII

claims. Ms. Utley submits that the

petitioners' reading of the legislative

history of Title VII is incorrect. 4

For example, petitioners refer in

their petition to the amendment to

Title VII permitting courts to appoint

a master under Fed. R. Civ. P. 53 if a

case has been pending 120 days or more

after issue has been joined. 42 U.S.C.

2000e-5(f) (5). Petitioners contend

that the amendment supports their

argument that Congress intended to pro-

vide non-judicial avenues for Title VII

claims. However, by framing the issue

as whether Congress intended to provide

non-judicial forums for Title VII claims,

defendants fail to acknowledge important

distinctions between reference to a

master and arbitration. First, the

reference to a master takes place only

if the issue has been joined, i.e.,

discovery has been completed. Secondly,

there is a sharp contrast between

court supervised masters, many of whom

are magistrates, and arbitrators

appointed by the New York Stock Exchange

(e.g., in terms of expertise with the

law and familiarity Title VII issues).

o36~<

CONCLUSION

For all of the foregoing reasons, Ms.

Utley respectfully requests the Court to

deny the petitioners a writ of certiorari

in this case.

Respectfully submitted,

Richard D. Glovsky

Counsel of Record

for Respondent

31 Milk Street

Suite 810

Boston, MA 02109

(617) 423-7100

Melinda Milberg

Daniel S. Tarlow

Glovsky & Associates

Of Counsel

December 21, 1989