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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1990
- **Citation:** 493 U.S. 1045

## Text

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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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_0630%3A2. Public record. Not legal advice.