# Opposition Brief — Bierdeman v. Shearson Lehman Hutton Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1992
- **Citation:** 506 U.S. 917

## Text

‘

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

BEST AVAILABLE COPY

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
[TS

[DDS

PABLI

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CONTENTS

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APPENDICES

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PHORTTIES

Case

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STATUTORY PROVISIONS INVOITVED*

IN vu

Supreme Court of the United States

Ocronen Tran. 1999

o

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

_—

ss

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
A?

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 ]
register.

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

9)
7)

Anv controversy between a registered representative

}
and an\ nember organization arising out of the

i

;
hi

t

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

ai

7
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,

r

‘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
X

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

10

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

l
By on
rie

ruled that the arbitration agreement at issue is contained in

i

1
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
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

}
I

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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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.

(c) The term “employment agency” means any pet!
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

9

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:

9

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

Q9

an

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

(c) It shall be an unlawful employment practice for a labor
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 |
register. ” Shearson alleges that plaintiff then registered with
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

a

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]

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_1167%3A2. Public record. Not legal advice.