Borg-Warner Protective v. U.S. Equal Employment

• Decision Date: 04 January 2000
• Docket Number: No. Civ.A. 99-00861 (HHK).,Civ.A. 99-00861 (HHK).
• Citation: 81 F.Supp.2d 20
• Parties: BORG-WARNER PROTECTIVE SERVICES CORPORATION, Plaintiff, v. U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Defendant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

81 F.Supp.2d 20

BORG-WARNER PROTECTIVE SERVICES CORPORATION, Plaintiff, v. U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Defendant.

No. Civ.A. 99-00861 (HHK).

United States District Court, District of Columbia.

January 4, 2000.

COPYRIGHT MATERIAL OMITTED

Thomas P. Steindler, Charles R. Work, McDermott, Will & Emery, Washington, DC, for plaintiff.

Ellen J. Vargyas, Legal Counsel, Thomas J. Schlagater, Assistant Legal Counsel, John F. Sherlock, III, Attorney, U.S. Equal Employment Opportunity Commission, Office of Legal Counsel, Washington, DC, for defendant.

MEMORANDUM

KENNEDY, District Judge.

Borg-Warner Protective Services Corporation ("Borg-Warner") filed the instant action seeking a declaration that the compulsory arbitration agreement it requires its employees to sign does not violate Title VII, and for related injunctive relief. Presently before the court is the motion of the United States Equal Employment Opportunity Commission ("EEOC") to dismiss for lack of subject matter jurisdiction. For the reasons discussed below, the court concludes that the EEOC's motion to dismiss should be granted.

I. BACKGROUND

As a condition of employment, Borg-Warner requires its employees to sign an agreement to submit any disputes with Borg-Warner arising from their employment to arbitration ("Arbitration Agreement"), including claims arising under federal statutes such as Title VII. Complaint ¶¶ 6-7. In 1996, the EEOC adopted a National Enforcement Plan ("NEP") that sets forth its enforcement priorities. Compl. ¶ 17 & Exh. 2. The NEP establishes as an enforcement priority "[c]laims presenting unresolved issues of statutory interpretation under one or more of the statutes enforced by the Commission," including "[c]laims addressing the legality of agreements that mandate binding arbitration of employment discrimination disputes imposed as a condition of initial or continued employment." Compl. ¶ 17 & Exh. 2 at § B(1)(h).

In July 1997, the EEOC issued a "Policy Statement on Mandatory Binding Arbitration of Employment Discrimination Disputes as a Condition of Employment" ("Policy Statement"). Compl. ¶ 18 & Exh. 3 at 11. The Policy Statement sets forth the EEOC's "position that agreements that mandate binding arbitration of discrimination claims as a condition of employment are contrary to the fundamental principles" of federal civil rights laws, including laws prohibiting employment discrimination. Compl.Exh. 3 at 11. The Policy Statement discusses the EEOC's reasons for this position. Id. at 11-16. The Policy Statement further provides instructions to its field offices and its headquarters, as follows:

1. ... Field offices are instructed to closely scrutinize each charge involving an arbitration agreement to determine whether the agreement was secured under coercive circumstances (e.g., as a condition of employment). The Commission will process a charge and bring suit, in appropriate cases, notwithstanding the charging party's agreement to arbitrate.

2. Pursuant to the statement of priorities in the National Enforcement Plan see § B(1)(h), the Commission will continue to challenge the legality of specific agreements that mandate binding arbitration of employment discrimination disputes as a condition of employment. ...

Id. at 16.

On December 10, 1998, one of Borg-Warner's former employees, Rudy Lee, filed a charge with the EEOC's Seattle, Washington office alleging that Borg-Warner had discriminated against him on the basis of race. Compl. ¶ 20. Although Mr. Lee had signed the Arbitration Agreement as a condition of his employment, Mr. Lee did not mention it in his EEOC charge. Compl. ¶¶ 6, 21. On March 12, 1999, after it had investigated Mr. Lee's charge, the EEOC issued its determination ("Determination") that there was insufficient evidence to support Mr. Lee's charge of race discrimination. Compl. ¶ 21 & Exh. 5 at 1. The Determination further stated, however, that the EEOC had found "reasonable cause to believe that there is a violation of Title VII in that [Borg-Warner] requires employees to sign a Pre-dispute Resolution Agreement, which requires arbitration in lieu of court action in matters relating to employment." Id. On the same date, the EEOC invited Borg-Warner to conciliate the Lee matter by, inter alia, ceasing use of, and rescinding, the Arbitration Agreement. Compl. ¶ 22 & Exh. 6. Subsequent conversations between Borg-Warner's counsel and the EEOC made clear that these were non-negotiable conditions, and conciliation failed. Compl. ¶¶ 23-24 & Exhs. 7-8.

On April 8, the EEOC issued Mr. Lee a Notice of Right to Sue. Def.'s Mot. Dismiss Exh. 1. The Notice provides in pertinent part:

The Commission has determined that it will not bring a civil action against the respondent(s) and accordingly is issuing this Notice of Right to Sue. With the issuance of this Notice the Commission terminates its process with respect to your charge, except that the Commission may seek status as intervenor if you decide to sue on your own behalf as described below.

Def.'s Mot. Dismiss Exh. 1. In the meantime, on April 5, 1999, Borg-Warner filed suit in this court, seeking declaratory and injunctive relief. Compl. at 10.

III. ANALYSIS

The EEOC seeks to have this case dismissed on several grounds. The EEOC contends that this court does not have subject matter jurisdiction under the statutory provisions set forth in the complaint, 28 U.S.C. §§ 1331, 1337, and 1343, because neither Title VII nor the Administrative Procedure Act ("APA") serves as a predicate to jurisdiction under those statutes. The EEOC also claims that Borg-Warner lacks standing and that its claims are not ripe and are moot.

A. LEGAL STANDARD

In ruling upon a motion to dismiss brought under Rule 12(b)(1), a court must construe the allegations in the Complaint in the light most favorable to the plaintiff. See, e.g., Hohri v. United States, 782 F.2d 227, 241 (D.C.Cir.1986), vacated on other grounds, 482 U.S. 64, 107 S.Ct. 2246, 96 L.Ed.2d 51 (1987). Additionally, a court may consider such materials outside the pleadings as it deems appropriate to resolve the question whether it has jurisdiction to hear the case. See, e.g., Herbert v. National Academy of Sciences, 974 F.2d 192, 197 (D.C.Cir.1992); Haase v. Sessions, 835 F.2d 902, 906 (D.C.Cir.1987); Hohri, 782 F.2d at 241; Transamerica Leasing, Inc. v. La Republica de Venezuela, 21 F.Supp.2d 47, 55 (D.D.C.1998); Bayvue Apts. Joint Venture v. Ocwen Fed'l Bank, 971 F.Supp. 129, 132 n. 5 (D.D.C. 1997).

B. FEDERAL-QUESTION JURISDICTION

The first question that this court must answer in determining whether it may hear this case is whether there is a jurisdictional peg on which Borg-Warner may hang its hat, i.e., whether this case "arises under" federal law such that this court could hear this case if it were brought at the proper time by the proper plaintiff. Borg-Warner asserts that this court has jurisdiction under 28 U.S.C. §§ 1331, 1337, and 1343; 42 U.S.C. §§ 2000e-5 and 2000e-6, which codify portions of Title VII; 5 U.S.C. §§ 702 and 704, which codify portions of the Administrative Procedure Act ("APA"); and 28 U.S.C. § 2201, which codifies the Declaratory Judgment Act.

1. Sections 1331, 1337, and 1343

Sections 1331, 1337, and 1343 of Title 28 of the United States Code grant federal district courts subject-matter jurisdiction over certain types of cases. Section 1331 provides as follows: "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Section 1337 provides in pertinent part: "The district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce...." 28 U.S.C. § 1337(a). Section 1343 provides in pertinent part: "The district courts shall have original jurisdiction of any civil action authorized by law to be commenced by any person ... [t]o recover damages or to secure equitable or any other relief under any Act of Congress providing for the protection of civil rights...." 28 U.S.C. § 1343(a)(4).

Borg-Warner argues that its claims under Title VII, the APA, and the Declaratory Judgment Act satisfy these provisions and thus enable this court to hear its case. Thus, the court turns to the question whether any of these Acts of Congress serves as a predicate to jurisdiction.

2. Title VII

Borg-Warner argues that this court has jurisdiction to hear this case because Borg-Warner has alleged that the EEOC acted ultra vires, that is, in excess of its delegated authority, in promulgating the Policy Statement and in applying it to Borg-Warner through the Determination. "[F]ederal courts have jurisdiction to review `action[s] taken in excess of delegated powers.'" Railway Labor Executives' Association v. National Mediation Board, 29 F.3d 655, 661 (D.C.Cir.1994) (quoting Leedom v. Kyne, 358 U.S. 184, 190, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958)). The question "whether an agency has acted `in excess of its delegated powers' has alternatively been phrased as whether the agency action `on its face' violated a statute." Dart v. United States, 848 F.2d 217, 222 (D.C.Cir. 1988) (citation omitted). Facial challenges to agency action as allegedly "`in excess of authority' must not simply involve a dispute over statutory interpretation or challenged findings of fact." Id. at 231. Judicial review of such allegations is to be granted only in extraordinary circumstances: "to justify such jurisdiction, there must be a specific provision of the Act which, although it is [] clear and mandatory, [ ] was nevertheless violated.'" Dart, 848 F.2d at 231 (quoting Council of Prison Locals v. Brewer, 735 F.2d 1497, 1501 (D.C.Cir.1984)) (brackets in original).

Borg-Warner's claim that the EEOC has acted ultra vires is based upon section 118 of the Civil Rights Act of 1991 and the Supreme Court's decision in Gilmer v. Interstate/Johnson Lane Corp., 500...