Opposition Brief — Brown & Root, Inc. v. Breckenridge

Supreme Court, US.

oe) ee ae ee

APR 9 1999

No. 98-1450 a

IN THE

Supreme Court of the United States

OCTOBER TERM, 1998

TENTS -ste —aRROIET

BROWN & ROOT, INC., DENNY ARMSTRONG

and JOE PHILLIPS,

Petitioners,

V.

WARREN J. BRECKENRIDGE

and CHARLES LEE BOOKER,

Respondents

On Petition for Writ of Certiorari

to the Circuit Court of Kanawha County,

West Virginia

RESPONDENTS’ BRIEF IN OPPOSITION

J. MICHAEL RANSON

Counsel of Record

LESLIE R. STOTLER

RANSON LAw OFFICES

Attorneys for Respondents

Bank One Center

707 Virginia Street East

Suite 1711

Charleston, WV 25326-3589

(304) 345-1990

@J Counsel Press LLC

FORMERLY LUTZ APPELLATE SERVICES

(800) 274-3321 ¢ (800) 359-6859

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2 ee ONE

TABLE OF CONTENTS

Page

Statement GT Hie CROO sss si a es ee cee e ees l

Reasons for Denying the Writ ................-. 3

I. The Decision Of The Circuit Court Of Kanawha

County, West Virginia Does Not Conflict With

The Decisions Of This Court.............. 3

Il. The Question Presented Is Important ....... 8

CG TRNIOEE G5 eo oa i eed ee er bee 12

TABLE OF CITED AUTHORITIES

Cases:

AT&T Technologies, Inc. v. Communication Workers,

OTS Ue Oe CLO) bh gaa sé ca i ee es aee ken 9

Copley v. NCR Corp., 183 W. Va. 152, 394 S.E.2d 751

Poco: POPUL Ge POT eee rer he ed eee =

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20

FROME hark ie ke eee PRS So eae arene 3, Oy i By

Paperworkers v. Misco, 484 U.S. 29 (1987) ....... 9

Perry v. Thomas, 482 U.S. 483 (1987) ........... 3,2

Southland Corp. v. Keating, 465 U.S. 1 (1984) .... 3,4,5

il

Cited Authorities

Page

Steelworkers v. Enterprise Wheel & Car Corp., 363

U.S: 5973 (9) 2 i hie a ee ee eee 9

The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972)

sw Glbiw a Wl Wik W eine NA gtk gae WO wedi a ee pe ead 4

Statutes:

GUSA. G1, 008. isi eae ee eee 4

oF USL. 9 B41, OF OR sis ier eee 6

West Virginia Code § 5-11-1, ef seg. .............

Other Authority:

Policy Statement on Mandatory Arbitration, EEOC

Notice No. 915.002, dary 10, 1997 ..4...400ece. ss 9

l

STATEMENT OF THE CASE

The respondents, Warren J. Breckenridge, Jr. and Charles

Lee Booker, initiated the proceedings at issue in this petition

by filing a complaint in the Circuit Court of Kanawha County,

West Virginia on September 15, 1997 alleging violations of

the West Virginia Human Rights Act, West Virginia Code

§ 5-11-1, et seq. In the complaint, Respondent Breckenridge

alleges that he was employed by Petitioner Brown & Root

from August 17, 1992 until October 31, 1996, at which time

Respondent Breckeridge was laid off, in whole or in part,

because of his race. Also in the complaint, Respondent Booker

alleges that he was employed by Petitioner Brown & Root

from August of 1993 until October 26, 1996 at which time

Respondent Booker was laid off, in whole or in part, because

of his race. These allegations are based upon the petitioners’

practice of allowing only one African-American employee

to work at any of its locations at one time. In order to

accomplish this goal the petitioners move and lay off their

three black employees as needed. Additionally, Petiticner

Brown & Root’s Equal Employment Opportunity

representative admitted to Respondent Booker that the

representative’s investigation revealed racist feelings toward

African-Americans and a plot to lay-off all of Petitioner

Brown & Root’s African-American employees.

Subsequent to the respondents attempting to initiate

discovery in this case, the petitioners filed, with the Circuit

Court of Kanawha County, a motion to compel arbitration

and a duplicitous motion for protection pursuant to the motion

to compel arbitration. These motions were based on the

respondents’ alleged agreement to submit employment

disputes to mediation and/or binding arbitration, which

agreements made the respondents’ continued employment

Nm

contingent on the respondents’ acceptance of said agreements,

and on the petitioners’ alleged refusal to submit their claims

to binding arbitration. The Circuit Court, after reviewing the

briefs submitted on behalf of the parties’ and the oxal

arguments of counsel, denied the petitioners’ motion to

compel arbitration based upon the Circuit Court's

determination that

an employees’ [sic] right to a trial by jury under

the West Virginia Human Rights Act cannot be

waived or contracted away, even though as a

condition of employment an agreement to arbitrate

exists between the parties.

(Petition, Appendix A).

The petitioners then filed a Petition for Writ of

Prohibition in the Supreme Court of Appeals of West

Virginia. The West Virginia Supreme Court refused to issue

a rule to show cause and refused the writ requested by the

petitioners. The petitioners now seek relief from this Court

through this Petition for Writ of Certiorari, but prior to the

respondents filing this brief in opposition, the petitioners have

also instituted another proceeding in the United States District

Court for the Southern District of West Virginia requesting

that the District Court validate and enforce the arbitration

agreements, order the respondents to dismiss their lawsuit in

state court, and order the respondents to submit their claims

to arbitration proceedings.

BOD Se IE RIS AGIA

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REASONS FOR DENYING THE WRIT

The petition’s claim that the state courts’ actions are in direct

conflict with clearly established United States Supreme Court

precedent and with clear Congressional expression of federal

policy does not warrant review by this Court, because the state

courts’ actions are not in conflict with any precedent of this

Court. Additionally, because the state courts’ decisions do not

conflict with federal law, this decision does not permit state

courts and legislatures to usurp Congressional authority to

determine the scope of federal law. } urther, in this Petition, the

petitioners are essentially asking this Court to federalized all

employment contracts, including contracts of adhesion similar

to the agreement at issue in this case between construction and/

or maintenance workers and their employer, who conditions

continued employment on the employee’s prospective waiver

of his statutory remedies for discrimination. Because of the far

reaching effects of granting the relief that the petitioners request

and because the decision below was a plainly correct application

of the law, this Petition should be denied.

THE DECISION OF THE CIRCUIT COURT OF

KANAWHA COUNTY, WEST VIRGINIA DOES NOT

CONFLICT WITH THE DECISIONS OF THIS COURT.

The petitioners claim that the decision of the circuit court

conflicts with the decisions of this Court. The petitioners cite

Southland Corp. v. Keating, 465 U.S. 1 (1984) and Perry v.

Thomas, 482 U.S. 483 (1987) for the proposition that

this Court has consistently resolved this issue by

holding that state courts and legislatures lack the

4

power to mandate resolution of claims in a judicial

forum where the parties have entered into

arbitration agreements which encompass those

claims and are enforceable under the Federal

Arbitration Act.

(Petition, p. 8). These decisions involved agreements to

arbitrate disputes contained in a franchise agreement and in

a Uniform Application for Securities Industry Registration

form, respectively. The petitioners, however, do not discuss

any of this Court’s opinions that considered mandatory

arbitration of employment discrimination claims.

Even the authority on which the petitioners rely does not

demonstrate that Congress or this Court intended that the

Federal Arbitration Act, 9 U.S.C. § 1, et seg., would preempt

the exercise of State authority in the field of employment

discrimination. In Southland Corporation, this Court began

it’s opinion by referencing The Bremen v. Zapata Off-Shore

Co., 407 U.S. 1, 12 (1972) which noted that:

the contract fixing a particular forum for resolution

of all disputes “was made in an arm’s-length

negotiation by experienced and sophisticated

businessmen, and absent some compelling and

countervailing reason it should be honored by the

parties and enforced by the courts.” The Zapata

court also noted that “the forum clause was a vital

part of the agreement, and it would be unrealistic

to think that the parties did not conduct their

negotiations, including fixing the monetary terms,

with the consequences of the forum clause figuring

prominently in their calculations.”

Id. at 14, 92 S. Ct. at 1915.

5

Nothing in this case indicates that the agreement at issue was

made by experienced and sophisticated businessmen or that

any negotiation occurred. In both Southland Corporation and

Perry, this Court found that provisions of two different

California statutes with language that appeared to prohibit

compulsory arbitration of claims conflicted with § 2 of the

FAA and thus violated the Supremacy Clause.

However, in this case, no West Virginia statute prohibits

compulsory arbitration of claims, but a West Virginia

Supreme Court of Appeals decision determined that given

the language of the West Virginia Human Rights Act and the

policy underlying that Act, an inherent conflict exists between

arbitration and the West Virginia Human Rights Act’s

underlying purposes. See Copley v. NCR Corp., 183 W. Va.

152, 394 S.E.2d 751 (1990). Given this Court’s reasoning in

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991),

the West Virginia Supreme Court’s decision in Copley, and

thus the Kanawha County Circuit Court’s reliance on that

precedent, is entirely appropriate. After noting the federal

policy favoring arbitration in the FAA and its purpose to place

arbitration agreements on the same footing as other contracts,

the Gilmer Court held that “statutory claims may be the

subject of an arbitration agreement, enforceable pursuant to

the FAA.” Gilmer, 500 U.S. at 26. The Court further stated

that

[a]lthough all statutory claims may not be

appropriate for arbitration, “[h]aving made the

bargain to arbitrate, the party should be held to it

unless Congress itself has evinced an intention to

preclude waiver of judicial remedies for the

statutory rights at issue.”

i eT

6

Gilmer, 500 U.S. at 26. Thus, the burden is on the party who

asserts that Congress, or in this case the West Virginia

Legislature, intended to preclude arbitration of claims under

a given statute to demonstrate such intent with evidence from

either the statute or its legislative history or an inherent

inconsistency between compulsory arbitration and the

statute’s underlying framework and purposes. Gilmer, 500

U.S. at 26-27.

In Gilmer, a case involving a mandatory arbitration

provision in an Uniform Application for Securities Industry

Registration, the plaintiff brought an age discrimination claim

under the Age Discrimination in Employment Act (ADEA),

29 U.S.C. § 621, et seg. The Gilmer Court reviewed the

language of the ADEA and it’s legislative history and found

nothing that precludes arbitration of ADEA claims. In fact,

the Gilmer Court found specific language directing the Equal

Employment Opportunity Commission

to pursue “informal methods of conciliation,

conference, and persuasion,” 29 U.S.C. § 626(b),

which suggests that out-of-court dispute

resolution, such as arbitration, is consistent with

the statutory scheme established by Congress.

Gilmer, 500 U.S. 29. Accordingly, this Court concluded that

“Gilmer has not met his burden of showing that Congress, in

enacting the ADEA, intended to preclude arbitration of claims

under that Act.” /d., 500 U.S. at 35.

Initially, the respondents would draw the Court’s

attention to the language in Gilmer that

“(hjaving made the bargain to arbitrate, the party

should be held to it unless Congress itself has

7

evinced an intention to preclude waiver of judicial

remedies for the statutory rights at issue.”

Gilmer, 500 U.S. at 26. The respondents, however, did not

make the bargain to arbitrate. The respondents in this case

were given the option of agreeing to arbitration or losing their

employment, which certainly does not permit the plaintiffs

to do any amount of bargaining regarding the terms of their

employment. Beyond this issue, the respondents here can

demonstrate that the West Virginia Legislature and the West

Virginia Supreme Court of Appeals intended to preclude

waiver of a judicial forum for West Virginia Human Rights

Act claims based upon the West Virginia Supreme Court’s

holding in Copley that “[u]nder West Virginia law, an

arbitration clause in an employment contract cannot defeat a

human rights action filed by the claimant pursuant to W. Va.

Code, 5-11-13(b) (1983).” Therefore, the finding of the

Kanawha County Circuit Court, applying Gilmer and Copley,

that

an employees’ [sic] right to a trial by jury under

the West Virginia Human Rights Act cannot be

waived or contracted away, even though as a

condition of employment an agreement to arbitrate

exists between the parties.

(Petition, Appendix A) is not in direct conflict with well-

settled federal law as enunciated by this Court.

Il.

THE QUESTION PRESENTED IS IMPORTANT

The respondents agree that the question presented in the

Petition is important in the sense that if this Court grants the

petitioners the relief that they request, this Court will set a

precedent that federalizes all employment contracts, including

contracts of adhesion. Contrary to the petitioners’ argument

that the decision of the state court “constitutes a substantial

threat to the viability of private arbitration as an alternative

to judicial proceedings” and that the decision of the state court

“eviscerates the Federal Arbitration Act by inviting state

legislatures (and courts) to create classes of state law claims

that are non-arbitrable” (Petition, p. 7), the decisions of the

state court only apply to certain types of employment

contracts. This decision will hardly eviscerate the Federal

Arbitration Act, because as was correctly stated in the Gilmer

dissent,

There is little dispute that the primary concern

animating the FAA was the perceived need by the

business community to overturn the common-law

rule that denied specific enforcement of

agreements to arbitrate in contracts between

business entities.

Gilmer, 500 U.S. at 39.

If however, this Court grants the relief requested by the-

petitioners, employers can effectively eliminate any right of

an employee to pursue discrimination claims in either the

federal or state courts by requiring the employee to sign an

arbitration agreement if the employee wants to continue his

te

9

or her employment or wants to be considered for employment.

This result would eviscerate both federal and state remedies

to employment discrimination and would eliminate the role

of the courts in implementing anti-discrimination statutes,

in developing the law under those statutes, and in assuring

that the cases brought under those statutes are decided

consistent with the law, because with respect to private

grievance procedures, including arbitration, there is little or

no opportunity for judicial review. See, e.g., Paperworkers

v. Misco, 484 U.S. 29, 36-37 (1987) (citing Steelworkers v.

Enterprise Wheel & Car Corp., 363 U.S. 593, 596-97 (1960)

and AT&T Technologies, Inc. v. Communication Workers,

475 U.S. 643, 649-50 (1986)).

In response to this concern that employers would begin

to require employees, as a condition of employment, to waive

their right to pursue discrimination claims under federal law,

the Equal Employment Opportunity Commission has issued

a lengthy commentary regarding its position on the issue.

See Policy Statement on Mandatory Arbitration, EEOC

Notice No. 915.002, July 10, 1997. In this Policy Statement,

the Commission criticized agreements that required an

employee, as a condition of employment, to give up the right

to pursue federal discrimination claims in court and to submit

all such claims to arbitration. Specifically, the Commission

stated that:

Through its public nature — manifested through

published decisions — the exercise of judicial

authority is subject to public scrutiny and to

system-wide checks and balances designed to

ensure uniform expression of and adherence to

statutory principles. When courts fail to interpret

or apply the anti-discrimination laws in accord

10

with the public values underlying them, they are

subject to higher level courts and to Congress.

These safeguards are not merely theoretical, but

have enabled both the Supreme Court and

Congress to play an active and continuing role in

the development of employment discrimination

law. Just a few of the more recent Supreme Court

decisions overruling lower court errors include:

Robinson vy. Shell Oil Co., 117 S.Ct. 843 (1997)

(former employee may bring a claim for

retaliation); O’Conner v. Consolidated Coin

Caterers, Corp., 116 S.Ct. 1307 (1996)

(comparator in age discrimination case need not

be under forty); McKennon, 513 U.S. 352

(employer may not use after-acquired evidence to

justify discrimination); and Harris, 510 U.S. 17

(no requirement that sexual harassment plaintiffs

prove psychological injury to state a claim).

EEOC Notice at IV (B), p. 3. Thus, if the relief requested in

this Petition is granted, this Court will set a precedent that

federalizes all employment contracts, including contracts of

adhesion similar to the agreement at issue in this case between

construction and/or maintenance workers and their employer,

who conditions continued employment on the employee’s

prospective waiver of his statutory remedies for

discrimination.

Despite the petitioners lengthy argument regarding

preventing the hostility toward arbitration that Congress

sought to eliminate when it enacted the Federal Arbitration

Agreement seventy-five years ago, the respondents submit

that the decisions of the West Virginia courts do not evidence

See Pa a eee A Te ee

1]

any hostility toward the FAA. The decisions of the West

Virginia courts do, however, evidence a hostility toward

contracts of adhesion similar to the agreement at issue in this

case. The bargaining positions of the parties in this case, a

large corporate employer and individual construction/

maintenance employees, are clearly not comparable, and the

respondents in this case cannot be said to have voluntarily

entered into an agreement to submit employment

discrimination claims to binding arbitration. As the Gilmer

dissent noted, during Senate Judiciary Subcommittee hearings

regarding the FAA,

the ABA committee responsible for drafting the

bill assured the Senators that the bill “is not

intended [to] be an act referring to labor disputes,

at all. It is purely an act to give the merchants the

right or the privilege of sitting down and agreeing

with each other as to what their damages are, if

they want to do it. Now that is all there is in this.”

Hearing on S. 4213 and S. 4214 before a

Subcommittee of the Senate Committee on the

Judiciary, 67th Cong., 4th Sess., 9 (1923).

Gilmer, 500 U.S. at 39. Based upon this legislative intent, a

contract of employment in which an employer, as a condition

of employment, requires its employees to either waive the

remedies afforded to them in federal and state anti-

discrimination statutes or to become unemployed, is not a

voluntary agreement as considered by Congress to be included

in the provisions of the FAA.

The consequences of the West Virginia decisions will

not undermine the stability of interstate business transactions,

but if this Court grants this Petition, the consequence of that

decision will be to undermine the stability and the

12

effectiveness of both federal and state anti-discrimination

statutes. Accordingly, the decision of the Circuit Court of

Kanawha County, West Virginia must stand.

CONCLUSION

For the foregoing reasons, the respondents, Warren J.

Breckenridge, Jr. and Charles Lee Booker, respectfully

request that the Petition for Writ of Certiorari be denied.

Respectfully submitted,

J. MICHAEL RANSON

Counsel of Record

LESLIE R. STOTLER

RANSON LAW OFFICES

Attorneys for Respondents

Bank One Center

707 Virginia Street East

Suite 1711

Charleston, WV 25326-358¢

(304) 345-1990