Opposition Brief — Bierdeman v. Shearson Lehman Hutton Inc.

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‘

No. 92-314 7’

IN THE

Supreme Court of the United States

OcToBEeR TERM. 1992

—_—-

IAURYN AGNEW BIERDE MAN.

SHEARSON LEHMAN HuTron [nN

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH C\RCUTI

> —

RESPONDENT'S BRIEF IN OPPOSITION

TO PETITION FOR A WRIT OF CERTIORARI

JerrReEY L. FRIEDMAN

: ‘ “

Counsel of Record for Respo:

Office of the General Counsel

Shearson Lehman Brothers Inx

388 Greenwich Street s4th |

New York. New York LOOI3

(212) 464-7293

THEODORE A. KREBSBACH

Office of the General Counsel

Shearson Lehman Brothers In«

(212) 464-7206

PeTER R. BOUTIN

LisA M. BERTAIN

Keesal, Young & Logan

Four Embarcadero Center. Suite 1500

San Francisco. California 94111

(415) 989-0616

Of Counsel

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OURSTION PRESENTED

RULE 28.1 LIST

PARENT COMPANIES. SUBSIDIARIES AND AFFILIATES

OF SHEARSON LEHMAN BROTHERS INC

Parent Companies

American Expr

Shearcon I.ehman Brothers |

Subsidianes

I xpress Cred:t ¢

Express Information Services ‘

Express Master Trust

Express Overseas Credit Corporation Limite

I: XPTeSS Overseas Credit Corporation NA

American Express Overseas redit Corporation 5.A

Express Overseas Finance Company N.\

Express Receivables Financing Corporat)

Express Resource Corporation

Express Travel Related Services |

Amex Life Assurance Compan

First Data Corporation

Grahams Rintoul Investment 11

IDS Bank & Trust

IDS Certificate Comp:

[DS Deposit Cor]

IDS Financial

\ffiliates (continued

IDS Financia! Se

[IDS

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STATUTORY PROVISIONS INVOITVED*

IN vu

Supreme Court of the United States

Ocronen Tran. 1999

LAURYN AGNEW BIERDEMAN

Petitioner

SHEARSON LEHMAN Hurron [Ne

Nie spond nil

ON PETITION FOR A WRIT OF CERTIORARI

lO THE UNTTEED STATES COURT OF APPEALS

POR THE NINTH CIRCUTI

_—

RESPONDENT'S BRIEF IN OPPOSTTION

iO PRTTTION FOR A WRIT OF CERTIORARI

OPINIONS BELOW

Phe opinion of the United States Court of Appeals for the

Ninth Circuit is reported at 1992 U.S App LEXIS 13271] and

is reproduced at Appendix B hereto The opinion of the United

States District Court for the Northern District of California i:

reported at 744 | Supp. 211 and is reproduced at Appendia

|) herete

JURISDICTION

The judgment of the court of appeals was entered on May

1992 and i: reproduced at Appendix © hereto. The Court

has jurisdiction pursuant to 2&8 U.S.C. § 1254(1) (1982

eters

STATEMENT OF THE CASE

Petitioner Laurvn Agnew Bierdeman (“Ms. Bierdeman” or

“petitioner”) commenced this action by serving respondent

Shearson Lehman Hutton Inc. (“Shearson”) with a complaint,

on or about January 3, 1990. The complaint asserts that

emplovees of Shearson terminated Ms. Bierdeman’s employment

as an institutional equity salesperson and subjected Ms.

Bierdeman to discriminatory conduct in violation of Title VIJ

of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (1982)

(“Title VIT").

The complaint alleges that Ms. Bierdeman was subjected to

such conduct due to her female gender and the fact that she

took two pregnancy leaves of absence during her employment

with Shearson. The complaint asserts that Ms. Bierdeman filed

timely charges of discrimination with the California Depart-

ment of Fair Emplovment & Housing and the Equal Employ-

ment Opportunity Commission (“EEOC”). Ms. Bierdeman’s

charges of discrimination stated that Shearson contended that

Ms. Bierdeman’s employment was not terminated due to her

female gender cr her pregnancy leaves of absence, but rather,

due solely to poor work performance. The EEOC, after in-

vestigating Ms. Bierdeman’s charges of discrimination, issued

Ms. Bierdeman a right to sue letter, dated October 3, 1989, and

terminated any further processing of the matter.

Shearson served Ms. Bierdeman with an answer to her com-

plaint, dated July 3, 1990, which, among other things: (1)

reiterated Shearson’s contention that Ms. Bierdeman’s employ-

ment was terminated due to poor work performance, and (2)

maintained that al] decisions and actions taken by Shearson with

respect to Ms. Bierdeman’s employment were based upon

reasonable factors which were not related to Ms. Bierdeman’s

female gender or her pregnancy. Shearson’s answer also asserted,

as an affirmative defense, that Ms. Bierdeman had agreed to

arbitrate any claim that she has against Shearson and she was

therefore precluded from maintaining an action against Shear-

son in the district court.

Shearson also filed a motion in the district court, on or about

February 22, 1990, for an order staving proceedings pending

arbitration, pursuant to Ms. Bierdeman’s contractual obligation

to arbitrate any claim that she has against Shearson. as required

by the Federal Arbitration Act. 9 U.S.C. § 1 ef seq. (1990)

(“FAA”). Shearson based its motion upon an arbitration agree-

ment contained in a contract Ms. Bierdeman executed at the

time she became registered as a securities representative.

Specifically, as required by her employment with Shearson.

Ms. Bierdeman registered as a securities representative with the

New York Stock Exchange. Inc. (“NYSE”). the National Associa-

tion of Securities Dealers, Inc. (“NASD”) and the American Stock

Exchange, Inc. (“AMEX”)! In connection with her registration

with these SROs, Ms. Bierdeman executed a registration applica-

tion, entitled “Uniform Application for Securities Industry

Registration,” on May 19, 1983. Ms. Bierdeman’s registration ap-

plication provided, among other things. that she-

agree|d] to arbitrate any dispute, claim or controvers\

that may arise between me and [Shearson], that is

required to be arbitrated under the rules. constitu.

tions or by-laws of the organizations with which ]

The Constitution and Rules of the SROs with which

Ms. Bierdeman registered all contain several provisions requir-

ing Ms. Bierdeman to arbitrate the claims which she has lodged

against Shearson, and Shearson relied on these provisions in the

lower courts. One such provision is NYSE Rule 347, which

provides:

Shearson is also registered with these self-regulatory organizations (“SRO’

as a broker and dealer in securities. The NYSE. for example, defines such a

registered corporation as a “member corporation.” See NYSE Const., Art. I.

§ 3(h)(i), 2 NYSE Guide (CCH) ¢ 1003. The term “member organization.

used throughout the Constitution and Rules of the NYSE, includes the term

“member corporation.” See Rule 2. 2 NYSE Guide (CCH) € 2002

Anv controversy between a registered representative

}

and an\ nember organization arising out of the

;

emplovment or termination of employment o

registered representative Dy and with such

member organization shall be settled by arbitration

| — ‘ =~ Pe casein

at the instance of anv such party, In accordance Wit

thie arbitrati I procedurft¢ pre rite ePlsewl re

these Tule

T 4° T +

NYSI Aue + 9 NYSI C,uide C( H{ and

| } +

The qistrict ) rt QT () ano if | LTi¢ VAL, | 41) lene Shneal

motion fOr <« tay ot proceedings pending arbditrall

: : ‘

noiaing Lite \ I] aims non-arbitrabie as a matte tI iaV iL Tie

district court relied on this Courts opinion 1} Vlexander 1

115 Q74 nT holding

Gardner-Denver Co.., 115 U.S. 36 (1974 to support its holding

not het j r Shear rouments which lear] lict}

iotwithstanding Shearsons arguments Wile Cicalt\ qiistl

suished the arbitration agreements at issue In, and the principt

established by Alexander and its progeny (1.¢ Barrentine 1

Arkansas-Best Freight Sys.. Inc., 450 U.S. 728 (1981) and

McDonald vt. City of West Branch, 466 U.S. 284 (1984)), trom

the arbitration agreement and principles involved in this cas

Shearson, by notice of appeal dated July 15, 1990,* filed

an appeal to the United States Court of Appeals tor the Nintl

Circuit based upon the district court s retusal to require M

Aa \

ul N YSE- Const Arvt. Ad | NYSE Guide (CCH) § 1501: NA

de of Arb. Prov Nia NASI Manual (CCH) © 3708: AMEX |]

41.0810). 2 AMEX Guide (CCH) § 9391.08

Shearson argued before the district court that these cases represent this ¢

abor arbitration precedent which governs arbitration agreements containe

llective-bargaining agreements Such an agreement is not the kind

ercial arbitration agreement into which Ms. Bierdeman entered whi

verned by the FAA and the Court commercial arbitratio!

resented in Rodriguez De Quijas v. Shearson/American Express, In i

{77 (1989): Shearson/American Express. Inc. vu. McMahon, 482 U.S

reh’g denied. 483 U.S. 1056 (1987): Mitsubishi Motors Corp. vc. Soler Chry

ut? im 17 { a Di4 LQSR5S

\\ t fia ralse tl f the tT M i ‘

T a i t ‘

Bierdeman to arbitrate her Title VII claims. During the penden

ey of Shearson’s appeal, this Court delivered its opinion in

Gilmer. ruling that: (1) the tvpe of arbitration agreement in

volved in this case is governed by. and enforceable under. the

[ AA. 9 the ( OUTTS LaDO! arb

d Mi Donald does not apply © SU

itration precedent represented 1

} ] os

\lexander. barrentine an

arbitration agreement. and (3) claims asserted under the Age

Discrimination in Emplovment Act of 1967. 29 U.S.C. § 621 ef

}

1982 ADEA”) are arbitrable

Subsequent to Gilmer. a panel ot the Ninth Circuit Court of

Appeals ruled in Mago v. Shearson Lehman Hutton In ISK

F.9d 932 (9th Cir. 1992) that the FAA requires enforcement of

igreements to arbitrate Title VII claims 1 sht of the broad

inciple nderlving Gilmer

Dhereatte another panel Of! the Nint! Cir i] l the pre

nt case. reversed the district court and

aims are arbitrable. relving on Mago and Gilm«

Che court of appeals also rejected Ms. Bierdemans argument

} ] )

tes with Shearson wa

reement to arbitrate her dispute

that her ag

’ ’ ]

iovment which lS ed

yntained in the tvpe of “contract of em]

mpt from the FAA since Ms. Bierdeman never raised the ar,

‘nt in the district court. and, more importa

ment was rejected by this Court in Gilmer

> } } } , r

Ms. Bierdeman subsequently filed a Petition for a Writ of Cer

tiorari (“Petition”) with this Court, on or about Aug

opinion requiring her to arb

‘

FH ASONS FOR DENYING THIER WRIT

tyOr) al f } tla triat tlie (court Should ¢ral

ré ew the ce t Of appca ridin that re

rial t arbitrate Uae 1 ite Vil clain Vac I

alnst Shedl no bx raintaminyg that the courts ¢

Til ? Thye | f Sf 4 ‘ee TITIOL al i() [fae

es that cert al ould b ranted to res

‘ r T¢ ler ; Ih) C7cegTni thie ( ‘

, P ‘ ‘ t <4 ‘ | ot tty } A \ “a? }

tractual avret ent roitrate fer dl

, : ; , ‘ j ’ ere] ¥

bas Oias | LA , Petit | |

f ‘ ’ ? a ‘ | ‘ + cert

: ‘ ali (} yt re ] ire a ( qpiirt te f If

cS ree attendant to tlie tragitiy Ol a writ ¢

the following reason 1) there is no meaning

trie OQurts Ol apped because (a) the Court

ilmer and ruling in Alford 1 Dean Witter Key

1404 (5th Cu 1990 vacated and remande

0) (199) have caused thi lower courts unlve!l

that Tithe \ ll cl ys ale arbitrable and by) thae

decisions on which petitioner reimes wer rey

| i ;

rnd conflict with Giimer and Alford: and (2) t

ment advanced by petitioner if upport ob her 1

r) Was ¢ the considered and reyected by the

Phere Iexists No Meaningful Conflict Among the

Courts of Appeals Regarding the knforceability of

putes in Light

(,ilmer 1 In

Dean Wit

Avreements to Arbitrate Lithe VIL I

Of this Courts Rulings an

terstate Johnson Lane ( orp and Alford 1

ter Reynolds, Ine

Phe Petitio i! es that the (

ce r cCorntiict al I thie US ( a y¢ irc {

cability of recrments to arbitrate Tithe VII Phe |

rare that Cc} COTILIICT ¢€ 1st re Three Durst

eighth circuit courts of apype rudin t lithe VII

ire non-arbitrable in Utley t. Goldman Sach Ci |

184 (Ist Cir. 1989). cert. denied, IOS. Ct. $42 (1990) and Swen

) 1 Vem t. Recruiters Intl Ir KOK | 130-4 7

he rel denied. 872 k.2d 264 ert. denied. |] { 14

ey.) vhich conflict with the contrat rulings of the fifth t]

al ninth circuit courts of peal Gecisions I \iford 1+. Dear

Witte Reunold Lr O39 F.2d 229 th Clair. 199] Willis 1

Lean Witter Keunold 46 } 2d 305 (6th Cir. 199] Va

( thie present ¢ ( (4 et t1Q!] i! 1()

Althou he dirst and eighth circuart { appea (/tl

1d owenson, respective did rule that Tithe VIET clai ire

arbitrable, they did so prior to this Court's rulings in Gilmer

and Alford. Indeed, every court subsequently ruling on the issue

has interpret d Grilmer to re quire entorcement of agreement

to arbitrate Tithe VII claims. See Willis. 948 F.2d at 307-1!

\/ford, 939 F.2d at 230: Mayo. 956 F.2d at 935: Bender v. Smith

( 0 78Q | Supp 155 160 IN

Hlarrw { pham

Securities [rv iS] |]

Barne lf

Richardson Greenshield

1992 Sacks 1

ijdy) 1475 1478-83 DD. Cal 199] Kaliden hearsor

Lehman Hutton Ine 89 F.Supp. 179 181-84 (W.D. I 19S)

King t. The birst Boston Cor) 1992 U.S. Dist. LEAIS 474

YW) Cy 13a }] |) \ Apri 1999

\ rf wow OF thre Co { rilil lI (alte i \/{ ] (

thie 7) t an eighth cll it pons 1 (U/tley a uo¢

I} t] = ee ) | Paive r¢ ‘ (

on Gilmer and Alford in requiring enforcement of agreements

to arbitrate Title VII claims, and (2 rejected Utley and Swen

con which are outdated and were implicit! overruled by Gilmer

and Alford Accordingly. One must reach the inescapable COT)

clusion that granting certiorari 1s not warranted in this case

In Gilmer. the Court, in examining an arbitration agreement

which is virtually identical to the agreement al Issue In this case

see Gilmer. 111 S.Ct. at 1650 51. found no congressional intent

to prohibit agreements to arbitrate ADEA claims, and ruled that

such agreements must therefore be enforced under the FAA. In

so doing. the Court, among other things. rejected the applica

tion of its labor arbitration precedent represented in Alexander

Barrentine and McDonald, governing collective-bargaining al

hitration agreements, to private commercial arbitration

agreements. such as that at issue in this case. Which are govern

ed by the FAA and the Courts ¢ ommercial arbitration prece

dent represented in Rodriguez, McMahon and Mitsubishi

The Court in Gilmer instructed that its labor arbitration Case

were inapplicable to the type of arbitration agreement involved

in this case because: (1) the Court's labor arbitration precedent

involved the issue of whether labor arbitration decisions which

involved contract-based claims precluded subsequent statutor

claims. not the arbitrability of a statutory claim under the KAA

9) the labor arbitrators involved in those cases. unlike the type

of commercial arbitrators who will be resolving this case, did

not have the authority to resolve statutory claims. and (3) there

exists the possibility that in collective-bargaining arbitration

individual rights may be subordinatec the collective right

of all union members. See Gilmer, li] Ct. at 1656-57

It is thus clear that, in light of Gilmer, the Court's labor at

bitration precedent is not to be relied on to prohibit entorc

ment of the type of commercial arbitration agreement at issu

in this case which must be enforced under the FAA

The Court in Gilmer, as it had done in Rodriguez and

McMahon. also rejected arguments opposing arbitration put

suant to SRO arbitration rules and the FAA which attacked the

“4 lequacy of this dispute resolution procedure See Gilmer, 11]

S. Ct. at 1054-55

peals howeve! IT)

deciding the issue several vears prior to Gilmer in Utley and

Swenson, relied on the Court's labor arbitration precedent t

prohibit enforcement of an agreement to arbitrate Title VII

laims. See Utley. 583 F.2d at 185-87: Stenson. SSS F.2d at

1305-09. These circuit courts of appeals also relied on what the

perceived as the inadequacy of arbitration procedures to resolve

litle VI] dispute: See tlery SS.5 2d at 187; Swenson. SSS

I.2d at 1306-07. Any doubt that this aporoach was impropet1

or that the Court’s opinion in Gilmer a phe equally to Lith

VII claims. was resolved resoundingly by its ruling in Alford

Prior to Gilmer, the fifth circuit court of appeals, in Alford

relied on Swenson. Utley and the Court’s labor arbitration prece

lent in ruling that agreements to arbitrate Title VII claims are

mentorceable. See Alford v. Dean Witter Reynolds, Inc., 905

I. 2d 104 (5th Cir. 1990), vacated and remanded, 111 S. Ct. 2050

1990). After issuing Gilmer, the Court, acting upon a Petition

for a Writ of Certiorari to review the fifth circuit’s ruling in

\/ford, granted certiorari, vacated the fifth circuit's ruling

remanded the case, and instructed the fifth circuit to reconsider

its opinion in light of Gilmer. See Dean Witter Reynolds, Inc

vt. Alford, 111 S. Ct. 2050 (1991). In accordance with the ob

vious meaning of the Court’s summary disposition of the Peti

tion in Alford, the fifth circuit, on remand, concluded correctly,

that Gilmer required it to render enforceable avreements to

trate Title VII claim:

In Gilmer, the Supreme Court decided that a claim

Inder ADI A] “can be subjected to compulsory dal

Ditration pursuant to an arbitration avreement In a

ecurities registration application. 11] S. Ct. at 1650

Because both the ADEA and Title VII are similar civil

rights statutes, and both are enforced by the EEOC pA

compare 29 U.S.C. § 626 with 42 U.S.C. § 2000e-9,

we have little trouble concluding that Title VII claims

can be subjected to compulsory arbitration. Any broad

public policy arguments against such a conclusion

were necessaril\ rejected by Gilmer

Alford. 939 F.2d at 230

Moreover, every court that has analyzed the enforceability

of agreements to arbitrate Title VII « laims under the FAA subse

quent to Gilmer has required enforcement of su¢ h agreement:

in light of the rationale underlying Gilmer, choosing not to

follow the outdated Swenson and Utley decisions. See Alford

939 F 2d 229 (5th Cir. 1991); Willis; Mago: Bierdeman: Bender

Sacks: Kaliden: King. Swenson and Utley. therefore, are not im

peding the ability of parties to have their arbitration agreements

enforced by the lower courts nationwide subsequent to Gilmer

There is. thus. no conflict among the courts of appeals

warrants review by the Court in this case regarding the e!

forceabilitv of agreements to arbitrate Title VII claim:

Il. This Court in Gilmer Has Already Resolved the

Issue of Whether the Type of Contract Requiring

Petitioner to Arbitrate Her Disputes w ith Respond

ent is Exempt from the Federal Arbitration Act

The Petition also argues that the Court should review the court

of appeals’ opinion to resolve an issue that petitioner maintain:

was not resolved in Gilmer and should be resolved by the Court

in this case. Specifically, the Petition argues that pr titioner’s con

tractual agreement to arbitrate any disputes that she has with

Shearson is exempted from the FAA by § | of the statute, hich

provides, in pertinent part:

[Njothing contained herein shal] apply to contract

of employment of seamen, railroad employees, or an)

other class of workers engaged in foreign or interstat

commerce

9 U.S.C. § ] See Petition at 10-l1. This precise issue. however.

has already been explicitly resolved by the Court in Gilmer

Gilmer involved the identical arbitration agreement that i:

involved in this case. The petitioner in Gilmer, like the petitioner

in this case, executed a securities registration application that

ontained an agreement to arbitrate any dispute with a member

organization such as Shearson in accordance with the arbita

tion rules of an SRO. The member organization involved in

Gilmer, like Shearson, relied on NYSE Rule 347 which require:

ecurities registrants such as peuuoner to arbitrate an\ dispute

arising out of their emplovment or termination of employment

with a membet1 Organization. See Gilmer. 11] S. Ct. at 1650 >|

The Court in Gilmer ruled that this arbitration agreement

Was not exempted trom the FAA by § 1] of the statute since it

is not contained in a “contract of emplovn ent. Rather, the Court

By on

rie

ruled that the arbitration agreement at issue is contained in

ecurluies registration applic ation which is a contract between

the securities registration applicant and the securities exchang

] |

not a contract Detween the securities registration applicant and

the member organization. See Gilmer, 111 S. Ct. at 1650-5] n.2

lhe Court in Gilmer, moreover. also recognized that the low

1 | ] ) 1 | } |

wirts have held uniformly that the exciusionary Clause Con

tained in § | of the FAA is inapplicable to arbitration clause:

1 } ] re |

contained in securities registration appilcations, and that the

Court implicitly assumed this in Perry v. Thomas. 482 U.S. 48

1QR

i ] ' 4

Contrary to petitioner suggestion that this issue was

solved in Gilmer the Court in C3] ae }

resoived in GCtlimer, the Ourt 1n Gtlmer Clearly stated

W le choose to follow the plain language of the FAA

} l l } ] j a ] ;

and the weight of authority and we theretore hold tha

I's exclusionary clause does not apply to Gilmer

irbitration agreement

Crilmer. 111 S. Ct. at 1652 n. 2 (emphasis added Accordin

] } .

the court of appeals, in addition to noting that petiuoner neve!

] }

iised this issue in the distri Ourt, reyected petitioner s Daseles

argument that the Court in Gilmer did not resolve this issue.

See A-12 All other courts ruling on the issue have also recognized

that the issue was explicitly resolved in Gilmer and that the FAA

requires enforcement ot! the twpe of arbitration agreement 1n

Ived in this case. See Alford. 939 F.2d at 230 n.": Willis. 94%

9d at 312: Sacks, 751 F. Supp. at 1483

}

hus, a! the issue concerning the appl ability of the FAA t

the tvpe ol arbitration agreement Involve din this case WaS resol

ed il Gilmer there 1s mm basis tor the (,ourt t rant CeTt

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BEST AVAILABLE COPY

APPENDIX A

STATUTORY AND REGULATORY

PROVISIONS INVOIVED

United States Arbitration Act

9 U.S.C. § 1.

“Maritime transactions’, as herein defined, means

charter parties, bills of lading of water carriers,

agreements relating to wharfage, supplies furnished

~ vessels or repairs to vessels, collisions, or any other mat-

ters in foreign commerce which, if the subject of con-

troversy, .would be embraced within admira!ty

jurisdiction; “commerce’, as herein defined, means

commerce among the several States or with foreign

nations, or in any Territory of the United States or

in the District of Columbia, or between any such Ter-

ritory and another, or between any such Territory and

any State or foreign nation, or between the District

of Columbia and any State or Territory or foreign na-

tion, but nothing herein contained shall apply to con-

tracts of employment of seamen, railroad employees,

or any other class of workers engaged in foreign or

interstate commerce. 9 U.S.C. § 1 (1990).

9 USC. § 2:

A written provision in any maritime transaction or

a contract evidencing a transaction involving com-

merce 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.

A-l

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 application of one of the

parties stay the trial of the action until such arbitra

tion 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

2000e. Definitions

or the purposes of this subc hapter

(a) The term “person” includes one or more in

dividuals, governments, governmental agencies

political subdivisions, labor unions, partnerships.

associations, corporations, legal representatives

mutual companies, joint-stock companies, trust:

unincorporated organizations, trustees, trustees in

cases under Title ll, or receivers.

(b) The term “employer” means a person engaged

in an industry affecting commerce who has fifteen o1

more employees for each working day in each of twen

ty or more calendar weeks in the current or preceding

calendar year, and any agent of such a person, but

such term does not include (1) the United States, a

corporation wholly owned by the Government of the

United States, an Indian tribe, or any department or

agency of the District of Columbia subject by statute

to procedures of the competitive service (as defined

in section 2102 of Title 5), or (2) a bona fide private

membership club (other than a labor organization)

which is exempt from taxation under section 501(c)

of Title 26, except that during the first year after

March 24, 1972, persons having fewer than twenty

five employees (and their agents) shall not be con

sidered employers.

son regularly undertaking with or without compen

sation to procure employees for an employer or to pro

cure for employees opportunities to work for an

employer and includes an agent of such a person.

(d) The term “labor organization” means a labor

organization engaged in an industry affecting com

merce, and any agent of such an organization, and

includes any organization of any kind, any agency,

or employee representation committee, group, associa

tion, or plan so engaged in which employees par

ticipate and which exists for the purpose, in whole or

in part, of dealing with erployers concerning

grievances, labor disputes, wages, rates of pay, hours,

or other terms or conditions of employment, and any

conference, general committee, joint or system board,

or joint council so engaged which is subordinate to

a national or international labor organization.

(e) A labor organization shall be deemed to be

engaged in an industry affecting commerce if (1) it

maintains or operates a hiring hall or hiring office

which procures employees for an employer or procures

for employees opportunities to work for an employer,

or (2) the number of its members (or, where it is a

labor organization composed of other laber organiza-

tions or their representatives, if the aggregate number

of the members of such other labor organization) is

(A) twenty-five or more during the first year after

March 24, 1972, or (B) fifteen or more thereafter, and

such labor organization

(1) is the certified representative of employees

under the provisions of the National Labor Rela

tions Act, as amended, or the Railway Labor Act.

as amended;

A-3

(2) although not certified, is a national or inter-

national labor organization or a local labor

organization recognized or acting as the represen-

tative of employees of an employer or employers

engaged in an industry affecting commerce; or

(3) has chartered a local labor organization or

subsidiary body which is representing or actively

seeking to represent employees of employers within

the meaning of paragraph (1) or (2); or

(4) has been chartered by a labor organization

representing or actively seeking to represent

employees within the meaning of paragraph (1) or

(2) as the local or subordinate body through which

such employees may enjoy membership or become

affiliated with such labor organization: or

(5) is a conference, genera! committee, joint or

system board, or joint council subordinate to a na-

tional or international labor organization, which

includes a labor organization engaged in an

industry affecting commerce within the meaning

of any of the preceding paragraphs of this sub

section.

(f) The term “employee” means an individual

employed by an employer, except that the term

“employee” shall not include any person elected to

public office in any State or political subdivision of

any State by the qualified voters thereof, or any per-

son chosen by such officer to be on such officer's per-

sonal staff, or an appointee on the policy making level

or an immediate adviser with respect to the exercise

of the constitutional or legal powers of the office. The

exemption set forth in the preceding sentence shall not

include employees subject to the civil service laws of

a State government, governmental agency or political

subdivison.

A-4

(zg) The term “commerce” means trade, traffic,

commerce, transportation, transmission, or com-

munication among the several States; or between a

State and any place outside thereof; or within the

District of Columbia, or a possession of the United

States; or between points in the same State but

through a point outside thereof.

(h) The term “industry affecting commerce” means

any activity, business, or industry in commerce or in

which a labor dispute would hinder or obstruct com-

merce or the free flow of commerce and includes any

activity or industry “affecting commerce” within the

meaning of the Labor-Management Reporting and

Disclosure Act of 1959, and further includes any

governmental industry, business, or activity.

(i) The term “State” includes a State of the United

States, the District of Columbia, Puerto Rico, the

Virgin Islands, American Samoa, Guam, Wake

Island, the Canal Zone, and Outer Continental Shelf

lands defined in the Outer Continental Shelf Lands

Act.

(j) The term “religion” includes all aspects of

religious observance and practice, as well as belief,

unless an employer demonstrates that he is unable to

reasonably accommodate to an employee's or prospec-

tive employee's religious observance or practice

without undue hardship on the conduct of the

employer's business.

(k) The terms “because of sex” or “on the basis of

sex” include, but are not limited to, because of or on

the basis of pregnancy, childbirth, or related medical

conditions; and women affected by pregnancy,

childbirth, or related medical conditions shall be

treated the same for all employment-related purposes,

including receipt of benefits under fringe benefit pro-

grams, as other persons not so affected but similar in

their ability or inability to work, and nothing in sec-

tion 2000e-2(h) of this title shall be interpreted to per-

mit otherwise. This subsection shall not require an

employer to pay for health insurance benefits for abor-

tion, except where the life of the mother would be en-

dangered if the fetus were carried to term, or except

where medical complications have arisen from an

abortion: Provided, That nothing herein shall preclude

an employer from providing abortion benefits or

otherwise affect bargaining agreements in regard to

abortion.

Pub.L. 88-352. Title VII, § 701, July 2, 1964, 78 Stat. 253; Pub

89-554. § 8(a), Sept. 6, 1966, 80 Stat. 662: Pub.k. 92-261, §

ea:

ants

Mar. 24. 1972. 86 Stat. 103; Pub.L. 95-555, § 1, Oct. 31, 1978.

99 Stat. 2076: Pub.L. 95-598, Title III, § 330, Nov. 6, 1978, 92

Stat. 2679.

§ 2000e-2. Unlawful employment practices

Employer practices

(a) It shall be an unlawful employment practice for

employer -

(1) to fail or refuse to hire or to discharge any in-

dividual. or otherwise to discriminate against any in-

dividual with respect to his compensation, terms, con-

ditions, or privileges of employment, because of such

individual’s race, color, religion, sex, or national

origin; OF

(2) to limit, segregate, or classify his employees or

applicants for employment in any way which would

deprive or tend to deprive any individual of employ-

ment opportunities or otherwise adversely affect his

status as an employee, because of such individual's

race, color, religion, sex, or national origin.

A-6

Employment agency practices

(b) It shall be an unlawful employment practice for an

employment agency to fail or refuse to refer for employment,

or otherwise to discriminate against, any individual because of

his race, color, religion, sex, or national origin, or to classify or

refer for employment any individual on the basis of his race,

color, religion, sex, or national origin.

Labor organization practices

organization-

(1) to exclude or to expel from its membership, or

otherwise to discriminate against, any individual

because of his race. color, religion, sex, or national

origin;

(2) to limit, segregate, or classify its membership

or applicants for membership, or to classify or fail or

refuse to refer for employment any individual, in any

way which would deprive or tend to deprive any in-

dividual of employment opportunities, or would limit

such employment opportunities or otherwise adversely

affect his status as an employee or as an applicant for

employment, because of such individual's race, col-

or, religion, sex, or national origin: or

(3) to cause or attempt to cause an employer to

discriminate against an individual in violation of this

section.

Training programs

(d) It shall be an unlawful employment practice for any

employer, labor organization, or joint labor-management com-

mittee controlling apprenticeship or other training or retrain-

ing, including on-the-job training programs to discriminate

against any individual because of his race, color, religion, sex

or national origin in admission to, or employment in, any pro-

gram established to provide apprenticeship or other training.

Businesses or enterprises with personnel qualified on

basis of religion, sex, Or national origin; educational

‘nstitutions with personnel of particular religion

(e) Notwithstanding any other provision of this subchapter.

(1) it shall not be an unlawful employment practice for an

employer to hire and employ employees, for an employment

agency to classify, or refer for employment an) individual, for

a labor organization to classify its membership or to classify or

refer for employment any ‘ndividual, or for an employer, labor

organization, or joint labor-management committee controlling

apprenticeship or other training or retraining programs to ad-

mit or employ any individual in any such program, on the basis

of his religion, sex, Or national origin in those certain instances

where religion, sex, or national origin is a bona fide occupa-

tional qualification reasonably necessary to the normal opera-

tion of that particular business or enterprise, and (2) it shall not

be an unlawful employment practice for a school, college.

university, or other educational institution or institution of learn-

ing to hire and employ employees of a particular religion if such

school. college, university, or other educational institution or

‘nstitution of learning is, in whole or in substantial part, owned,

supported, controlled, or managed by a particular religion or

by a particular religious corporation, association, OF society, OF

‘f the curriculum of such school, college, university, or other

educational institution or institution of learning is directed

toward the propagation of a particular religion.

Members of Communist Party or Communist-action

or Communist-front organizations

(f) As used in this subchapter, the phrase “unlawful employ-

ment practice” shall not be deemed to include any action or

measure taken by an employer, labor organization, joint labor-

management committee, or employment agency with respect

to an individual who is a member of the Communist Party of

the United States or of any other organization required to register

as a Communist-action or Communist-front organization by

final order of the Subversive Activities Control Board pursuant

to the Subversive Activities Control Act of 1950.

A-§

National security

(g) Notwithstanding any other provision of this subchapter,

it shall not be an unlawful employment practice for an emplover

to fail or refuse to hire and employ any individual for any posi

tion, for an employer to discharge any individual from any posi-

tion, or for an employment agency to fail or refuse to refer any

individual for employment in any position, or for a labor

organization to fail or refuse to refer any individual for employ-

ment in any position, if

(1) the occupancy of such position, or access to the

premises in or upon which any part of the duties of

such position is performed or is to be performed, is

subject to any requirement imposed in the interest of

the national security of the United States under any

security program in effect pursuant to or administered

under any statute of the United States or any Executive

order of the President; and

(2) such individual has not fulfilled or has ceased

to fulfill that requirement.

Seniority or merit system; quantity or quality of

production: ability tests; compensation based on

sex and authorized by minimum wage provisions

(h) Notwithstanding any other provision of this subchapter,

it shall not be an unlawful employment practice for an employer

to apply different standards of compensation, or different terms,

conditions, or privileges of employment pursuant to a bona fide

seniority or merit system, or a system which measures earnings

by a quantity or quality of production or to employees who work

in different locations, provided that such differences are not the

result of an intention to discriminate because of race, color

religion, sex, or national origin, nor shall it be an unlawful

employment practice for an employer to give and to act upon

the results of any professionally developed ability test provided

that such test, its administration or action upon the results is

not designed, intended or used to discriminate because of race,

A-Y

color. religion, sex or nationai origin. It shall not be an unlawful

employment practice under this subchapter for any employer

to differentiate upon the basis of sex in determining the amount

of the wages or compensation paid or to be paid to emplovees

of such employer if such differentiation Is authorized by the pro

visions of section 206(d) of Title 29

Businesses or enterprises extending

preferential treatment to Indians

(i) Nothing contained in this subchapter shall apply to any

business or enterprise On Or near an Indian reservation with

respect to any publicly announced employment practice of such

business or enterprise under which a nreferential treatment 1:

} j

given to any individual because he is an Indian living on or neat

a reservation.

Preferential treatment not to be granted on account

of existing number or percentage imbalance

(j) Nothing contained in this subchapter shall be interpreted

to require any employer, employment agency, labor organiza

tion, or joint labor-management committee subject to this sub

chapter to grant preferential treatment to any individual or to

any group because of the race. color, religion, sex, or national!

origin of such individual or group on account of an imbalance

which may exist with respect to the total number or percen

tage of persons of any race, color, religion, sex, or national origin

employed by any employer, referred or classified for employ

ment by any employment agency or labor organization, admit

ted to membership or classified by any labor organization, o1

admitted to, or employed in, any apprenticeship or other training

program, in comparison with the total number or percentage

of persons of such race, color, religion, sex or national origin

in any community, State, section, or other area, or in the

available work force in any community, State, section, or other

aqTCa

Pub.L. $8-352, Tithe VII, § 703, July 2, 1964 78 Stat. 255: Pub.L.

992.96]. & Klay. (b). Mar. 24, 1972, 86 Stat. 109

ALO

APPIENDIX B

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEAIT

FOR THRE NINTH CIRCUTI

LAURYN BIE RDEMAN

Plaintiff-Appeliee NQO. 90-16024

1) ¢

SHEARSON LEHMAN MIEMORANDUM*

HUTTON INC

Filed May 28. 1992

Defendant Appr lant

Appeal from the United States District Court

for the Northern District of California

Robert F. Peckham, District Judge, Presiding

Argued and Submitted October 7, 199]

San Francisco. California

Submission Deferred October 17, 199]

Resubmitted: May 13. 1992

BeFORE: TANG, REINHARDT, and TROT T, Circuit Judge:

Laurvn Agnew Bierdeman filed suit against her former

employer, Shearson Lehman Hutton Ine. | Shearson’), alley

inv sex discrimination in violation of Tithe VII, 42 U.S

929000e-2/as(1) (1981). At the beginning of her employment with

Shearson, Bierdeman executed a Uniform Application for

AI]

Securities Industry Registration. The application form, among

other things, required Bierdeman to arbitrate any dispute be-

tween Shearson and herself arising out of her emplovment.

Shearson filed a motion for a stay of the district court ffro-

ceedings pending arbitration. The district court denied the mo-

tion on the ground that Title VII cases are not arbitrable. Shear-

son timely noticed_its appeal to this court. We reverse and

remand.

This court recently ruled that Title VII disputes are arbitrable.

Mago v. Shearson Lehman Hutton Inc... 956 F.2d 932, 935 (9th

Cir. 1992) The district court’s contrary conclusion was erroneous.

Bierdeman argues, alternatively, that her agreement to ar-

bitrate is not subject to the Federal Arbitration Act because it

arises from a contract of employment. The Federal Arbitration

Act expressly excludes from its provisions “contracts of employ-

ment of seamen, railroad employees, or any other class of workers

engaged in foreign or interstate commerce.” 9 U.S.C. § 1 (1970).

We reject Bierdeman’s argument for two reasons.

First, this argument was not raised below. We ordinarily will

not entertain arguments raised for the first time on appeal.

Bolker v. Commissioner, 760 F.2d 1039, 1042 (9th Cir. 1985

Second, the Supreme Court has held that arbitration

agreements arising from a securities registration application do

not constitute “contracts of employment” within the meaning

of 9 U.S.C. § 1, and are in fact subject to the Federal Arbitra-

tion Act. Gilmer v. Interstate/Johnson Lane Corp., —_ U.S.

___, 101 S. Ct. 1647, 1651-52 n.2 (1991); see also Alferd v. Dean

Witter Reynolds, Inc., F.2d 229, 230n.* (5th Cir. 1991).

REVERSED and REMANDED.

A-12

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NO. 90-16024

CT/AG#: CV-89-4473-RFP

(Filed July 8, 1992

LAURYN BIERDEMAN

Plaintiff - Appellee

SHEARSON LEHMAN HUTTON INC

Defendant - Appellant

APPEAL FROM the United States District Court for the

Northern District of California (San Francisco)

THIS CAUSE came on to be heard on the Transcript of the

Record from the United States District Court for the Northern

District of California (San Francisco) and was duly submitted.

ON CONSIDERATION WHEREOEF It is now here ordered

and adjudged by this Court, that the ____ judgment of the said

District Court in this cause be. and hereby is REVERSED and

REMENDED [sic]

Filed and entered 05/28/92

A TRUE COPY

CATHY A. CATTERSON

Clerk of Court

ATTEST

JUN 24 1992

by Verna Lavin

Deputy Clerk

A-13

APPENDIX D rk

LAURYN AGNEW

BIE RDEMAN

Plaintiff, NO. €-89-4473 REP

ORDER

SHEARSON LEHMAN RDEI

Defendant

I INTRODUCTION.

We are presented with a motion by defendant Shearson

Lehman Hutton (“Shearson”) to stay proceedings and compel

arbitration in this sex discrimination suit brought under Title

VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.

Plaintiff Lauryn Agnew Bierdeman was employed by Shearson

as an institutional equity salesperson. She alleges that Shear

son first reduced her compensation and ultimately terminated

her employment because of her sex and in retaliation for her

twice taking pregnancy leave. After timely submitting her claim

to the Equal Employment Opportunity Commission (“EEOC”)

and receiving a notice of right to sue, Bierdeman filed this ac

tion in federal district court. She has refused to submit to ar

bitration, arguing that the Title VII statute and judicial authori-

ty interpreting it entitle her to pursue a remedy in federal court

without first submitting her grievance to binding arbitration.

Defendant Shearson now moves to stay Bierdeman’s action

and to compel her to submit her claim to arbitration. Shearson

argues that Bierdeman is contractually bound to arbitrate her

claim by the constitutions and regulations of the New York Stock

Exchange (“NYSE”), National Association of Securities Dealers

(“NASD”), and American Stock Exchange (“AMEX”), which she

agreed to comply with when she accepted employment with

‘efendant. Shearson wants Bierdeman to submit to arbitration

as provided by the rules of these organizations

A-14

Shearson attempts to distinguish Supreme Court authority

holding that arbitration agreements cannot prevent Title VII

plaintiffs from pursuing their remedies in federal court. In do-

ing so, Shearson separates the Supreme Court's decisions on the

arbitrability of various statutory claims into decisions involy

ing collective bargaining agreements and decisions involving

privately negotiated commercial arbitration agreements such

as those implicated here. While this categorization allows Shear

son to distinguish Supreme Court precedent holding that Title

VII plaintiffs do not waive their right to a judicial remedy by

signing an arbitration agreement, it is nevertheless spurious. The

decisions which Shearson relies upon in arguing for enforcement

of the NYSE, NASD, and AMEX arbitration provision without

exception involve statutes other than Title VII.

IH BACKGROUND.

Plaintiff Laurvn Bierdeman went to work for Lehman

Brothers in May, 1983, as an institutional equity salesperson.

The following vear, defendant Shearson acquired Lehman

Brothers. When plaintiff accepted her position, she signed an

agreement Which provided in pertinent part, “I agree 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 |

the NYSE, the NASD, and AMEX, and that the constitutions

and rules of those organizations require her to arbitrate her

claim.

Bierdeman claims that Shearson discriminated against her on

the basis of her sex; specifically, she contends that her bonus

compensation was cut and that she was eventually terminated

because she took pregnancy leave. Bierdeman was the only

female employee in Shearson’s West Coast Equity Sales Depart

ment. She took two three-month pregnancy leaves during the

time she was employed by Shearson — the first from October

through December of 1985, and the second from May through

July of 1987. She alleges that her supervisors reduced the number

of accounts that she managed and reduced the number of “bonus

nn eee ae eee ee ae

points” she received after her first pregnancy leave. After her

second leave, she alleges that her bonus points were again cut

end that Shearson removed a Quotron machine which she con

tends she needed in order to be able to perform her job. She

was terminated in December 1987 and replaced with a male

emplovee on the same day. .

Bierdeman contends that Shearson agents and emplovees told

her that her pregnancy leaves were not in the company’s best

interests. She contends that she heard through a client that

Shearson told the client she was terminated because she preferred

to be at home with her children.

Bierdeman filed a complaint with the EEOC and received

a notice of right to sue. She timely filed this action on December

18, 1989. Shearson has formally demanded that Bierdeman sub

mit her grievance to arbitration. Demand Letter, Declaration

of Jeffrey L. Friedman at Exhibit 2. Plaintiff maintains that she

is not compelled to do this.

Il. DISCUSSION.

Defendant Shearson’s position is that plaintiff agreed at the

time of accepting employment to submit any complaints against

Shearson to arbitration. In support of this position, Shearson

relies upon her agreement, quoted above, to comply with the

arbitration regulations of any self-regulating organizations

(“SRO's”) of securities brokers that she registered with.

Bierdeman registered with the NYSE, the NASD and AMEX.

Declaration of Jeffrey L. Friedman at 47 and at Exhibit 1. NYSE

Rule 600(a) provides that any dispute or claim arising between

a member organization and an “associated person” of that

member organization shall be submitted to arbitration. The

NASD Code of Arbitration Procedure §8(a) similarly provides

for the submission to arbitration of “any dispute, claim, or con

troversy arising out of or in connection with the business of any

member of the association.” Shearson asserts that the AMEX ar-

bitration rules also bind plaintiff to submit to arbitration. Ninth

Circuit authority holds that the arbitration provisions contained

A-16

in the rules of the various SRO's have contractual force. Muh

v. Newberger, Loeb, & Co., Inc., 540 F.2d 970. 973 (9th Cir.

1976). Therefore, we find that Shearson has made a prima facie

showing that a contract existed between it and Bierdeman re-

quiring that she submit any grievances between her and Shear-

son to arbitration by the procedures set wp by one of the SRO's:

However, even if Bierdeman’s agreement to submit disputes

with Shearson to arbitration in accordance with SRO rules con-

stitutes a valid contract, it nevertheless is unenforceable. A line

of Supreme Court cases holds that a Title VII plaintiff does not

prospectively waive her right to pursue relief in federal court

when she agrees to arbitration of disputes.

The serninal case in this area is Alexander v. Gardner-Denver

Company, 415 U.S. 36, 94 S.Ct. 10M, 39 L.Ed.2d 147 (1974).

kn Alexander, the Court held that a prier arbitration decision

finding that the plaintiff's claim had no merit could not foreclose

plaintiff's right to bring a Title VI race discrimination case in

federal court. The Court wrote:

| L Jegislative enactments in this area have long evinced

a general intent to accord parallel or overlapping

remedies against discrimination. Title VIP's pur

pose and procedures strongly suggest that an in

dividual does not forfeit his private cause of action

if he first pursues his grievance to final arbitration

under the non-discrimination clause of a collective

bargaining agreement. 415 U.S. 47-49.

We assume for purposes of argument, but do not decide. that this agree

ment is valid. Plaintiff has challenged the validity of the agreement to sub

mit to arbitration, characterizing it as a contract of adhesion. While the Ninth

Circuit has rejected the proposition that NASD and NYSE. arbitration

agreements can be defined as unconscionable as a matter of law. Cohen 1

Wedbush, Noble, Cooke & Co., 841 F.2d 282. 286 (9th Cir 1988), the possibility

remains that such agreements could be found unconscionable under certain

circumstances, Determining whether plaintiff truly lacked meaningful power

to refuse the arbitration provision or to bargain over its terms, however. would

require an evidentiary hearing. Because we dispose of this motion on the

grounds discussed below, we find that it is unnecessary to conduct such a

hearing

A-17

So long as the plaintiff satisfied the Title VII jurisdictional re-

quirements of presenting his claim to the EEOC and receiving

a notice of right to sue, the claim could be litigated in federal

court despite the arbitrator’s decision. Id. at 45.

The Supreme Court elaborated on Alexander in Barrentine

v. Arkansas-Best Freight System, 450 U.S. 728 (1981). when it

held that an adverse arbitration decision had no preclusive ef-

fect on a Fair Labor Standards Act plaintiff's righi to litigate

based on the same facts submitted to arbitration. The Barren-

tine Court distinguished between contractual rights and

statutory rights “designed to provide minimum substantive

guarantees to individual workers,” finding that the latter were

so significant that courts should not defer to arbitral decisions.

While the Supreme Court did not directly hold in Alexander

that agreements to submit to arbitration of claims arising under

Title VII are not enforceable, other Circuits have applied the

Alexander line of cases to this effect. In Swenson v. Manage-

ment Recruiters, 858 F.2d 1304 (8th Cir. 1988), cert. denied,

110 S.Ct. 143 (1989), the-Eighth Circuit relied on Alexander to

find that Title VII claims were simply not subject to arbitra-

tion, finding that “Congress did not intend federal judicial pro-

ceedings in discrimination cases to be preempted by employ-

ment arbitration agreements.” 858 F.2d at 1306. Similarly, the

First Circuit held in Utley v. Goldman Sachs & Co., 883 F.2d

184 (Ist Cir. 1989), cert. denied, 110 S.Ct. 842 (1989), that an

employee cannot prospectively waive her rights to sue under Title

VII even where she signs an arbitration agreement. It should

be noted that the Utley case is directly on point, in that it in-

volved a female employee bringing a sex discrimination suit

which the employer asserted was subject to arbitration under

stock exchange rules because of the same type of U-4 form agree-

ment at issue here.

Shearson appears to admit that Alexander renders Title VII

claims non-arbitrable; however, it attempts to argue that Alex-

ander should be limited to the collective bargaining agreement

context. In doing so, Shearson focuses not on the distinction be-

tween Supreme Court precedent on arbitration of Title VII as

A-18

opposed to other types of claims, but on the distinction between

arbitration agreements in the group as opposed to the individual

context. Shearson relies on several Supreme Court cases finding

that private commercial arbitrations agreements were en-

forceable. None of the cases cited were in the Title VII context,

however. See e.g.. Mitsubishi v. Soler Chrysler-Plymouth, 473

U.S. 614 (Sherman Act): Shearson American Express v.

McMahon, 482 U.S. 220 (Civil RICO treble damages claim):

Rodriguez de Quijas v. Shearson American Express, 490 U.S.

___., 104 L.Ed.2d. 525 (1989) (Securities Exhcange Act claim).

Drawing this distinction between the collective bargaining

and private arbitration agreement context has been rejected in

two other circuits as an incorrect interpretation of Alexander.

The Eighth Circuit in Swenson, for example, found that Alex-

ander “turned not on the fact that a collective bargaining ar-

bitration was involved, but instead on the unique nature of Ti-

tle VII.” 858 F.2d at 1306. In Utley, the First Circuit also found

that Alexander turned on the Title VII issue and could not be

distinguished on grounds that it applied only to agreements to

arbitrate contained in collective bargaining agreements.

We note that some time was devoted to oral argument to

discussion of the persuasive effect of various cases regarding the

arbitrability of discrimination claims arising under the Age

Discrimination in Employment Act (“ADEA”), 29 U.S.C. §§621

et seq. Having reviewed the cases cited by the parties, we do

not find support in this line of reasoning for Shearson’s posi-

tion on the arbitrability of ADEA claims. While the Fourth Cir-

cuit has held ADEA claims to be arbitrable, Gilmer v. In-

terstate/Johnson Lane Corp., 895 F.2d 195 (4th Cir. 1990), the

Third Circuit has held them to be non-arbitrable, Nicholson v.

CPC International, Inc., 877 F.2d 221 (3rd Cir. 1989).

Second, the court is not persuaded that even those courts

finding ADEA claims arbitrable would apply the same reason-

ing to Title VII claims. For example, in Gilmer, the Fourth Cir-

cuit noted than an arbitration agreement would be unen-

forceable where “Congress has evinced an intention to preclude

A-19

waiver of the judicial forum for a particular statutory right.” 895

F.2d at 197. While the Fourth Circuit found no indication of such

Congressional intention with respect to ADEA, the Supreme

Court found that such intention exists with respect to Title VII

claims. Alexander, 415 U.S. at 51-52. Thus, we do not find the

Fourth Circuit's decision in Gilmer persuasive on the question

of whether arbitration of Title VII claims should be compelled.

Finally and most significantly, Ninth Circuit authority con-

flicts with Shearson’s position. In Criswell v. Western Airlines,

709 F.2d 544 (1983), the Ninth Circuit relied on the Supreme

Court's decision in Alexander to reject deference to an arbitral

decision in an ADEA case. In doing so, the court specifically

drew the analogy between ADEA and Title VII claims. 709 F.2d

at 548. Given that the Ninth Circuit has disfavored arbitration

of ADEA claims on the rationale that the Supreme Court does

not compel deference to arbitral decisions in the Title VII con-

text, we find Shearson’s argument regarding ADEA unpersua-

sive.

IV. CONCLUSION.

ror the reasons set forth above, we find that plaintiff could

not prospectively waive her right to a judicial determination

of her Title VII claim. Accordingly, defendant's motion to stay

proceedings and compel arbitration is hereby denied.

IT IS SO ORDERED.

DATED: June 20, 1990.

/s/ Robert F. Peckham

United States

District Judge

C-89-4473 RFP LAURYN AGNEW BIERDEMAN VS.

SHEARSON LEHMAN HUTTON

A-20

CERTIFICATE OF SERVICE BY MAIL.

I. the undersigned deputy clerk. declare under penalty of per-

jury that I served the following document(s) as listed below by

enclosing a true copy of said document(s) in a separate postage

paid, sealed envelope and to-day placing the said envelope in

a regularly maintained United States Postal Service mail

depository in the City and County of San Francisco. Califor-

nia, addressed as follows:

Kathleen Lucas-Wallace, Esq. (415) 433 6166

Deborah C. England, Esq.

LAW OFFICES OF KATHLEEN LUCAS-WALLACE

930 Bush St., Suite 500

San Francisco, CA 94108

Peter R. Boutin, Esq. (415) 989 0616

Lisa M. Bertain, Esq.

KEESAL, YOUNG & LOGAN

Four Embarcadero Center. Suite 1500

San Francisco, CA 9411]

1) ORDER DENYING DEFENDANT'S MOTION TO STAY

PROCEEDINGS AND COMPEL ARBITRATION

DATED: June 21. 1990

S legible

Deputy Clerk

A-2]

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.