10.2190/QUA1-CDTD-GHNL-76GB QUA1CDTDGHNL76GB 267 MANDATORY ARBITRATION OF STATUTORY DISPUTES: THE VIEW FROM THE FOURTH CIRCUIT 267 286 20021107 20021107 20021107 20021107 QUA1CDTDGHNL76GB.pdf http://baywood.metapress.com/link.asp?target=contribution&id=QUA1CDTDGHNL76GB 4 CHARLES J. COLEMAN GEORGE M. PANGIS Rutgers University School of Law at Camden In 1991, the U.S. Court of Appeals for the Fourth Circuit vaulted to a position of leadership in cases involving mandatory arbitration of statutory disputes when the Supreme Court upheld the decision made by that circuit in Gilmer v. Interstate/Johnson Lane Corp. [1]. In that case, the Fourth Circuit stood alone in holding that 1) statutory claims under the Age Discrimination in Employment Act (ADEA) may be subject to an arbitration agreement signed at the time of a person's employment; and 2) such an agreement may be enforced under the terms of the Federal Arbitration Act of 1925 (FAA) [2]. In subsequent years, the Gilmer decision has been extended by the entire judiciary to a vast array of cases involving a variety of statutes. The Fourth Circuit has decided a number of these cases, sometimes leading the other circuits, sometimes following them, sometimes affirmed by the Supreme Court, and sometimes reversed. This article examines those decisions and provides an assessment of the role that has been played by the Fourth Circuit on this topic. Dennis R. Nolan and Roger I. Abrams, American Labor Arbitration: The Early Years, 35 University of Florida Law Review 3 (1983), pp. 373-421. For example, Williams v. Cigna Fin. Advisors, Inc., 197 F.3d 752, 763-64 (5th Cir. 1999). United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960). EEOC v. Frank's Nursery & Crafts, 177 F.3d 448 (6th Cir. 1999). Hooters of America. Inc. v. Phillips, 173 F.3d 933 (4th Cir. 1999). Rodriguez de Ouijas v. Shearson/American Express Inc., 490 U.S. 477 (1989). Alexander v. Gardner-Denver, 415 U.S. 36 (1973). Textile Workers Union v. Lincoln Mills, 230 F.2d 81 (1956). Pryner v. Tractor Supply Co., 109 F.3d. 354, 363 (7th Cir. 1997). EEOC v. Waffle House, Inc., No. 99-1823 (2002), with Justice Thomas dissenting joined by Justice Scalia and Chief Justice Rehnquist. United Steelworkers v. American Mfg. Co., 363 U.S. 564 (1960). David E. Feller, Presidential Address: Bye Bye Trilogy, Hello, Arbitration, Arbitration 1993: Arbitration and the Changing World of Work, Proceedings of the Forty-Sixth Annual Meeting of the National Academy of Arbitrators (Washington, D.C.: BNA, 1994). United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960). For example, Paul R. Hayes, Labor Arbitration: A Dissenting View, New Haven and London, Yale University Press, 1966. Gilmer v. Interstate/Johnson Lane Corp., 895 Fed. 2d 196 (4th Cir. 1990); 500 U.S. 20 (1991). Engineers Assn. v. Sperry Gyroscope Co., 252 F.2d 133 (2d Cir. 1957). Cert. denied, 356 U.S. 932 (1958). 42 U.S.C. § 2000c, et. Seq. Cole v. Burns Intl. Sec. Servs., 105 F.3d 1465 (D.C. Cir. 1997). Which amounted to $4,470.88. The arbitrator decided against Bradford [35, at 558]. The number of cases involving employment discrimination rose by two, 166 percent between 1970 and 1989 as compared to 125 percent for all other litigation [4, (1995) at p. 66]. Shearson/American Express Inc. v. McMahon, 482 U.S. 220 (1987). Johnson v. Circuit City Stores, 148 F.3d 373 (4th Cir. 1998). Dennis R. Nolan and Roger I. Abrams, American Labor Arbitration: The Maturing Years, 35 University of Florida Law Review 4 (1983): pp. 557-632. The authors acknowledge their debt to David E. Feller for this phrase. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985). 519 U.S. 980 (1996). For discussion, Charles J. Coleman and Gerald C. Coleman, Toward a New Paradigm of Labor Arbitration in the Federal Courts, Hofstra Labor Law Journal, Vol. 13, No. 1, Fall 1995, pp. 1-74; C. J. Coleman and G. C. Coleman, Constructing a New Paradigm of Labor Arbitration, Dispute Resolution Journal, Vol. 51, No. 4, Oct. 1996, pp. 34-45. Pub. L. 102-166 § 118. Safrit v. Cone Mills Corp., 248 F.3d 306 (4th Cir. 2001). Bradford v. Rockwell Semi-Conductor Systems, Inc., 238 F.3d. 549 (4th Cir. 2001). For examples of the rules, see Charles J. Coleman, A Dialogue on a Contemporary Issue: The Hooters Case, Journal of Individual Employment Rights, Vol. 9, No. 2, 2001, pp. 163-169. Wilko v. Swan, 346 U.S. 247 (1953). Carson v. Giant Food, Inc., 175 F.3d. 325 (4th Cir. 1999). EEOC v. Waffle House, Inc., 193 F.3d 805 (4th Cir. 1999); EEOC v. Kidder, Peabody & Co., 156 F.3d 298 (2d Cir. 1998). A Due Process Protocol for Mediation and Arbitration of Statutory Disputes Arising Out of the Employment Relationship. Joyce M. Najita, Ed., Arbitration 1995: New Challenges and Expanding Responsibilities. Proceedings of the Forty-Eighth Meeting of the National Academy of Arbitrators, BNA: Washington, D.C. 1996, pp. 298-304. Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998). Austin v. Owens-Brockway Glass Containers, Inc., 78 F.3d 875 (4th Cir. 1996). Brown v. AFB Freight Systems, 183 F.3d 319 (4th Cir. 1999). O'Neil v. Hilton Head Hosp., 115 F.3d 272 (4th Cir. 1997). 9 U.S.C. § 2 (1994). Language issues were also significant in Brown v. TWA, 127 F.3d 337 (4th Cir. 1997), decided after Austin but before the Supreme Court's decision in Wright. This case dealt with a customer service agent who filed sexual harassment claims in federal district court under Title VII of the Civil Rights Act and the Family Medical Leave Act. She was covered by a collective bargaining agreement that prohibited discrimination on a number of grounds, including sexual harassment. The contract also contained an arbitration clause that provided an arbitration board with the power to decide disputes or grievances "which may arise under the terms of this Agreement" [p. 339]. The Fourth Circuit, relying on the language in the CBA, argued that: 1) the CBA included a nondiscrimination clause, part of which was directed to sexual harassment; 2) the arbitration board was limited by the contract to grievances that arose "with reference to interpretation and application of any provision of the agreement." However, because the agreement did not "purport to submit any noncontractual dispute or any statutory dispute to arbitration" [p. 341], the appellate court reversed the summary judgment of the district court that had ordered Brown to arbitration. Generally, 80 Cornell Law Rev. 1665, at 1703 and Footnote 36. See also Insurance Co. v. Morse 87 U.S. 445, 451-453 (1874) (Arbitration agreements "oust the courts of the jurisdiction conferred by law."); Lewis v. Brotherhood Accident Co., 79 N.E. 802, 803 (Mass. 1907) (A contractual term requiring disputes to arbitration "is void as an attempt to oust the courts of their jurisdiction."); Pepin v. Society St. Jean Baptiste, 49 A.387, 388 (R.I. 1901) (Prospective waiver of a judicial forum by agreement to arbitrate violates public policy.) This also follows a long history of similar sentiments in English courts, which have held that, regarding arbitration contracts, "an agreement of the parties cannot ouster the court of its jurisdiction." King v. Hollister, 95 Eng. Rep. 532, 532 (K.B. 1746). Joan Parker, Arbitration of Statutory Employment Discrimination Claims: What Hath Gilmer Wrought, Journal of Individual Employment Rights, Vol. 8, No. 3, pp. 231-244 (1999-2000). Emphasis added. Section I of the FAA is also relevant to the employment arena. This section provides that "nothing herein shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce, " without specifying what is meant by the phrase, "foreign or interstate commerce." The Supreme Court avoided this issue in its Gilmer decision [1] but mercifully put this issue to rest in Circuit City Stores, Inc. v. Adams [121 S. Ct. 1302 (2001)], in which it decided that FAA coverage is extended to all workers except those who are actually and directly engaged in the interstate commerce transportation industry. The Ninth Circuit Court of Appeals would undoubtedly occupy the other extreme because of its holding in Duffield that employers may not compel employees to waive their protection under Civil Rights legislation through predispute agreements to arbitrate. Duffield v. Robertson Stephens & Co., 144 F.3d. 1182 (9th Cir. 1998).