Workers May Be Forced to Arbitrate Bias Claims, Court Says En Banc

Wednesday, October 1, 2003

Page 3

Workers May Be Forced to Arbitrate Bias Claims, Court Says En Banc

By a MetNews Staff Writer

Agreements requiring workers to arbitrate employment discrimination claims do not violate Title VII of the Civil Rights Act of 1964, the Ninth U.S. Circuit Court of Appeals ruled yesterday.

In an 8-3 en banc decision, the court overruled Duffield v. Robertson Stephens & Co., 144 F.3d 1182 (9th Cir. 1998), in which a three-judge panel held that such agreements violate the Civil Rights Act of 1991. The reasoning of that decision has been rejected by every other federal appeals court to consider the issue.

Judge A. Wallace Tashima, writing for the court, said Duffield’s conclusion that the 1991 act bars the application of arbitration clauses to Title VII claims if the agreement was entered into as a mandatory condition of employment was based on faulty analysis.

Tashima was joined by Judges Pamela Ann Rymer, Barry G. Silverman, Susan P. Graber, M. Margaret McKeown, William A. Fletcher, Richard C. Tallman, and Richard R. Clifton. Chief Judge Mary M. Schroeder and Judges Harry Pregerson and Stephen Reinhardt dissented.

The en banc ruling upholds the use of a compulsory arbitration agreement by Luce, Forward, Hamilton & Scripps, a San Diego-based firm with a Los Angeles office. The Equal Employment Opportunity Commission sued Luce Forward in February 2000, alleging that it had violated Title VII by withdrawing its offer to employ Donald Cormac Lagatree as a full-time secretary in the Los Angeles office after he refused to sign the agreement.

The commission suit was filed six months after this district’s Court of Appeal ruled that Luce Forward—and another firm sued by Lagatree, Long Beach’s Keesal, Young, & Logan—did not violate state law by requiring current and prospective employees to sign the agreements.

Lagatree, who now works at another local law firm, was employed by Keesal for three years, but was fired in June 1997, three months before Luce Forward offered to hire him. Lagatree told the MetNews yesterday he was “not surprised by [the ruling] given the political tenor of the times we live in.”

A three-judge Ninth Circuit panel had earlier ruled in favor of the firm, saying that +Duffield+ had been implicitly overruled by a later U.S. Supreme Court decision.

The panel was wrong about the effect of the high court case, which dealt with arbitration of employee claims not related to alleged discrimination, Tashima said. But the result was correct because Duffield was wrongly decided, the judge explained, although the panel could not reach that conclusion because only an en banc court can overrule a panel decision in the federal appellate system.

Tashima said that Congress could not have intended to ban the use of compulsory arbitration agreements in Title VII when it enacted the 1991 act, which expanded remedies for civil rights violations and abrogated several Supreme Court decisions which had given limiting interpretations to civil rights laws.

The jurist noted that the act explicitly permits “the use of alternative means of dispute resolution, including...arbitration” if “appropriate and...authorized by law.”

He also reasoned that Congress was presumptively aware of a Supreme Court ruling that preceded the act’s passage, upholding enforcement of a compulsory arbitration agreement with respect to an age discrimination claims, suggesting that had lawmakers intended to bar arbitration of civil rights claims, they would have done so explicitly and would not have included language favoring arbitration.

Pregerson, writing for the dissenters, noted that Congress, before it passed the 1991 act, rejected an amendment that would have specifically authorized employers to include mandatory arbitration clauses in their agreements.

The congressional language, he noted, supports arbitration where “appropriate.” Arbitration, he argued, is “appropriate” if it is voluntary agreed to by the parties, not where workers are “coerced into signing an arbitration provision as a non-negotiate ‘take-it-or-leave-it’ precondition of employment.”