Emmanuel Bailey v. Fed. Nat'l. Mortgage Ass'n.

• Decision Date: 21 April 2000
• Docket Number: No. 99-7103,99-7103
• Citation: 209 F.3d 740,341 U.S. App. D.C. 112
• Parties: (D.C. Cir. 2000) Emmanuel Bailey, Appellee v. Federal National Mortgage Association, Appellant
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 740

209 F.3d 740 (D.C. Cir. 2000)

Emmanuel Bailey, Appellee v. Federal National Mortgage Association, Appellant

No. 99-7103

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 22, 2000

Decided April 21, 2000

Appeal from the United States District Court for the District of Columbia(No. 98cv03095)

Juanita A. Crowley argued the cause for appellant. With her on the briefs was John Payton.

Kelly J. Davidson argued the cause for appellee. With her on the brief was Pamela J. White.

Before: Edwards, Chief Judge, Tatel and Garland, Circuit Judges.

Opinion for the Court filed by Chief Judge Edwards.

Edwards, Chief Judge:

The instant litigation involves a claim of employment discrimination filed by the appellee, Emmanuel Bailey, against the appellant, Federal National Mortgage Association ("Fannie Mae" or "employer"). In response to Mr. Bailey's complaint, Fannie Mae filed a motion to stay litigation pending arbitration. The District Court denied the motion to stay, and Fannie Mae now appeals.

This case presents a new twist to an old problem. In Cole v. Burns Int'l Sec. Servs., 105 F.3d 1465 (D.C. Cir. 1997), we held that, if certain conditions are met, an employer may compel an employee to use arbitration in lieu of litigation to pursue a statutory claim of employment discrimination if the employee signed an arbitration agreement as a condition of hire. In this case, however, Fannie Mae seeks to compel arbitration pursuant to a "Dispute Resolution Policy" that was unilaterally promulgated by the employer after Mr. Bailey was hired. There is a serious question under Cole whether an employer may impose a condition of employment requiring a current employee to use arbitration before seeking to litigate statutory employment discrimination claims for no consideration save the employee's continued employment.

Fortunately, we do not have to decide this troublesome question. The issue was not raised before the trial court, because Fannie Mae disclaimed any intention of terminating Mr. Bailey if he persisted in his refusal to arbitrate the instant dispute. Fannie Mae contends only that its motion to stay should be granted because Mr. Bailey implicitly agreed to arbitrate statutory claims of employment discrimination when he continued to work for the employer after the issuance of the Dispute Resolution Policy. Mr. Bailey, in turn, claims that he never gave his assent to be bound by the employer's new arbitration policy. Mr. Bailey claims further that he made it clear to Fannie Mae that he did not subscribe to the employer's new arbitration policy.

The District Court denied Fannie Mae's motion to stay, finding that, because there was no meeting of minds between the parties, there was no arbitration agreement to enforce. We can find no error in the judgment of the District Court. Accordingly, we affirm.

I. Background

On March 12, 1998, Mr. Bailey filed a memorandum with Fannie Mae's Office of Corporate Justice requesting an investigation of various allegations of race and gender discrimination. In this memorandum, labeled a "Formal Complaint," Mr. Bailey stated:

Pursuant to the Fannie Mae Employee Handbook, I hereby submit a Formal Complaint with respect to the aforementioned violations of all applicable United States and District of Columbia Laws and the Fannie Mae Affirmative Action Plan. Further, I hereby retain all redress options available to me under the Equal Employment Opportunity Commissions (EEOC) [sic] and the United States and/or Local Court System.

Request for Formal Investigation, reprinted in Joint Appendix ("J.A.") 39.

Fannie Mae had announced in January 1998 that it would issue a new arbitration policy on March 16, 1998. Subsequently, on March 16, 1998, as promised, Fannie Mae issued a Dispute Resolution Policy, which required employees to pursue job-related claims internally, through arbitration, before such claims could be presented to a court of law. In particular, the Dispute Resolution Policy stated that, as of March 16, 1998,

the Policy becomes a condition of employment for all Fannie Mae employees. This means that, by starting or continuing work for Fannie Mae on or after that date, each employee is indicating that he or she accepts the Policy as a condition of employment and agrees to be bound by it.

Dispute Resolution Policy at 1, reprinted in J.A. 106.

Mr. Bailey never said anything to any official at Fannie Mae to indicate that he acceded to the Dispute Resolution Policy, and he never signed any agreement to that effect. And Mr. Bailey never did or said anything to withdraw the position stated in his March 12 complaint, in which he reserved the right to pursue statutory claims with the EEOC and in federal or state court. Indeed, on March 30, 1998, after the Policy was issued, Mr. Bailey's counsel sent a letter to Fannie Mae asserting that

Mr. Bailey's [March 12] Complaint was directed to [the employer] on that date specifically to avoid the effective date on March 16 of a new corporate policy that might have mandated arbitration of Mr. Bailey's issues.

Letter from Pamela J. White to Stasia Kelly (Mar. 30, 1998), reprinted in J.A. 70-71. On May 8, 1998, after an exchange of correspondence between the parties over Mr. Bailey's refusal to be bound by the new arbitration policy, Mr. Bailey's counsel sent another letter to Fannie Mae to reiterate her client's position:

Mr. Bailey retained "all redress options" available to him with the courts or EEO administrative agencies and, thus, rejected Fannie Mae's new mandatory arbitration policy effective March 16, 1998. Furthermore, with or without regard to the filing date and pendency of his Complaint, Mr. Bailey does not agree to be bound by then ew "Dispute Resolution Policy."

Letter from Pamela J. White to Dawn P. Marcelle (May 8, 1998), reprinted in J.A. 186. In response to this last letter, Fannie Mae's counsel sent a letter to Mr. Bailey's attorney, reiterating the employer's position and reassuring Mr. Bailey that he was in no threat of losing his job:

Fannie Mae had not previously understood that Mr. Bailey had already decided that he would not be bound by the Dispute Resolution Policy. As you know, Fannie Mae considers Mr. Bailey to be bound by that Policy with respect to the complaint that he made on March 12,1998. In the event that an employee disregards the Policy, Fannie Mae would enforce it by seeking appropriate judicial relief. As Fannie Mae previously told employees, it will not terminate them for failing to follow the Policy. Letter from Fannie Mae to Pamela J. White, reprinted in J.A. 190.

On August 6, 1998, Fannie Mae rejected Mr. Bailey's complaint as unmeritorious. On December 14, 1998, Mr. Bailey filed a lawsuit in the Superior Court of the District of Columbia, alleging discrimination and retaliation in violation of 42 U.S.C. S 1981 (1994), discrimination and retaliation in violation of the D.C. Human Rights Act S 1-2501, and breach of implied contract in violation of 42 U.S.C. S 1981. Fannie Mae removed Mr. Bailey's lawsuit to the United States District Court for the District of Columbia on December 18, 1998. Fannie Mae then moved, pursuant to 9 U.S.C. S 3 (1994), to stay litigation pending arbitration of Mr. Bailey's claims. Because Mr. Bailey had rejected the policy of mandatory arbitration as a condition of his continued employment, he opposed the motion to stay.

On May 21, 1999, the District Court denied Fannie Mae's motion, finding that Mr. Bailey had effectively rejected the possibility of arbitration when he filed his complaint with Fannie Mae on March 12, 1998. Fannie Mae then filed this appeal pursuant to 9 U.S.C. S 16(a)(1) (1994).

II. Discussion

A. The Standard of Review

Normally, the determination of intent is a question of fact. See Pullman-Standard v. Swint, 456 U.S. 273, 288 (1982).Therefore, a district court's findings on intent are subject to deferential review under Federal Rule of Civil Procedure 52(a), and such findings may not be set aside unless clearly erroneous. See id. at 287-88. It does not matter whether a finding of fact is based on documentary evidence or inferences from other facts; in either event, an appellate court must respect a trial court's finding of fact unless it concludes that the finding is clearly erroneous. See Anderson v. Bessemer City, 470 U.S. 564, 574 (1985). "A finding is 'clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed."United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948). And the burden of establishing a clear error is on the appellant. See, e.g., Case v. Morrisette, 475 F.2d 1300, 1307 (D.C. Cir. 1973).

In Pullman-Standard, the Court applied Rule 52(a) to review a lower court's determination that the differential impact of a seniority system reflected an intent to discriminate racially. The Court expressly repudiated the view that facts could be put into distinguishable categories (i.e., either subsidiary or ultimate) in determining whether Rule 52(a)'s clearly erroneous standard of review should apply. See Pullman Standard, 456 U.S. at 287. However, the Court left open the question of the standard of review for "mixed questions of law and fact," that is, "questions in which the historical facts are admitted or established, the rule of law is undisputed, and the issue is whether the facts satisfy the statutory standard, or to put it another way, whether the rule of law as applied to the established facts is or is not violated."Id. at 289 n.19. It is unclear in this case whether the District Court's finding that Mr. Bailey never agreed to arbitration is a simple question of fact or a mixed question of law and fact. At first blush, the issue appears to raise a question of fact regarding the parties' intent. Unfortunately, the question is not so simple.

In United...