Gardner v. Benefits Communications Corp.

• Decision Date: 23 February 1999
• Docket Number: No. 98-7054,98-7054
• Citation: 175 F.3d 155
• Parties: 79 Fair Empl.Prac.Cas. (BNA) 215, 75 Empl. Prac. Dec. P 45,793 Sandra Kaye GARDNER, Appellant, v. BENEFITS COMMUNICATIONS CORPORATION, et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 155

175 F.3d 155

79 Fair Empl.Prac.Cas. (BNA) 215,

75 Empl. Prac. Dec. P 45,793

Sandra Kaye GARDNER, Appellant, v. BENEFITS COMMUNICATIONS CORPORATION, et al., Appellees.

No. 98-7054.

United States Court of Appeals District of Columbia Circuit.

Argued Jan. 13, 1999.

Decided Feb. 23, 1999.

Appeal from the United States District Court for the District of Columbia (No. 91cv00536).

Richard A. Salzman argued the cause for appellant. With him on the briefs was Douglas B. Huron.

John M. Husband argued the cause for appellees. With him on the brief were Brian M. Mumaugh, Anthony Herman and Christine L. Kurek.

Before: EDWARDS, Chief Judge, WILLIAMS and HENDERSON, Circuit Judges.

Opinion for the Court filed by Chief Judge HARRY T. EDWARDS.

HARRY T. EDWARDS, Chief Judge:

Almost eight years ago, Sandra Kaye Gardner filed suit against her employer, Benefits Communications Corporation ("BCC"), as well as against several other institutional and individual defendants, asserting statutory claims of employment discrimination and retaliation. The District Court initially ordered Gardner to arbitrate her claims, on the assumption that her registration with the National Association of Securities Dealers ("NASD"), which was completed as a condition of Gardner's employment with BCC, required Gardner to arbitrate claims of the sort at issue in this case. Because the District Court refused to certify an appeal to this court on that issue, this appeal represents the first opportunity that Gardner has had to challenge the District Court's order compelling arbitration. Moreover, because the arbitration has already occurred, Gardner also now challenges the propriety of the arbitration award.

This litigation has languished far longer than necessary; it is therefore regrettable that our disposition will prolong this case even further. This result is unavoidable, however, because Gardner's claims against BCC are not subject to mandatory arbitration. If all of the original defendants remained as parties to this lawsuit, we might face two difficult questions: whether a fair reading of Gardner's NASD registration indicates her agreement to submit the instant claims to arbitration, and, if so, whether arbitration lawfully may be compelled pursuant to the purported agreement. These are moot questions, however, for Gardner has agreed to dismiss all defendants save BCC. With BCC as the sole defendant, there is no doubt that Gardner is not required to arbitrate her claims in lieu of having the case heard in District Court.

Accordingly, we remand this case to the District Court for further proceedings to address the merits of Gardner's claims against BCC. In light of this disposition, it is unnecessary to resolve Gardner's additional claim that the disputed arbitration award should be set aside under Cole v. Burns International Security Services, 105 F.3d 1465 (D.C.Cir.1997).

I. BACKGROUND

BCC provides plan enrollment services for consumers of group and individual life insurance plans. The company is a wholly owned subsidiary of the Great-West Life Assurance Company ("Great-West"), a Canadian-based insurance company that sells group and individual life, health, and annuity products. BCC is also a director of BenefitsCorp Equities, Inc. ("BCE"), a limited broker-dealer in the annuity and life products market. BCC is not a member of NASD; however, both Great-West and BCE are members of NASD.

Gardner began working for BCC in the fall of 1989 as an Employer Sponsored Specialist. In this position, Gardner sold retirement-related insurance products and securities to participants in employer-sponsored pension plans. Because Gardner sold securities for BCC through BCE, she was required to register as an agent with NASD as a condition of her employment. Accordingly, on September 11, 1989, she executed a Uniform Application for Securities Industry Registration or Transfer, widely known as a "U-4 form," to satisfy this requirement. See Joint Appendix ("J.A.") 58-61.

For most of Gardner's tenure at BCC, her immediate supervisor was Craig Wolpert. According to Gardner, Wolpert did not like her and sought to get rid of her because she was "a big woman." Brief for Appellant at 5. Gardner alleges that she complained of Wolpert's discriminatory treatment to the upper management of her company, but Wolpert was never reprimanded for his behavior. See Brief for Appellant at 6; Complaint p 11, reprinted in J.A. 25. Gardner additionally claims that Wolpert not only continued his discriminatory treatment after her internal complaint, but also launched a campaign of retaliation in response to it. See Complaint p 12, reprinted in J.A. 25.

Due to Wolpert's allegedly discriminatory treatment and abuse, Gardner asserts she was forced into treatment for anxiety and depression. On October 11, 1990, Gardner suffered a panic attack and asked for sick leave due to her illness. Instead of granting Gardner's request, Wolpert placed Gardner on disciplinary probation and sought a replacement for her. See Memorandum from Craig Wolpert to Kaye Gardner (Oct. 11, 1990), reprinted in J.A. 128; Advertisement, WASHINGTON POST, Oct. 14, 1990, at K33, reprinted in J.A. 129. Gardner went on extended medical leave, and finally resigned from BCC in early 1991. See Brief for Appellant at 7; Complaint pp 13-14, reprinted in J.A. 25-26. Thereafter, she was employed by Liberty Securities, but at a much lower salary. In 1991, 1992, and 1993, Gardner earned $19,739, $15,823, and $25,000, respectively, compared to the roughly $53,500 she had earned at BCC. See J.A. 155.

In April 1991, Gardner filed suit in District Court against BCC, Great-West, and BCE, as well as against corporate officers Wolpert and Charles Nelson, Wolpert's direct supervisor, asserting claims of employment discrimination and unlawful retaliation under the D.C. Human Rights Act (the "Human Rights Act"), D.C.CODE ANN. §§ 1-2501 to 1-2557 (1981 & Supp.1998). See Complaint pp 1, 6, reprinted in J.A. 21-22, 23. She alleged that she had been subjected to sex discrimination and unlawful retaliation by Wolpert, and that the other defendants either knew or should have known of Wolpert's actions, but nevertheless allowed it to continue. See id. pp 9-10, 12, 15, reprinted in J.A. 24-26.

In response to Gardner's complaint, the defendants, all represented by the same counsel, moved to compel arbitration of the case, arguing that Gardner had agreed to arbitrate this type of dispute when she registered with the NASD. Gardner opposed this motion, but the District Court, relying on Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991), found that the NASD Code of Arbitration Procedure ("NASD Code") mandated arbitration of this dispute. See Gardner v. Benefits Communications Corp., No. Civ. A. 91-0536 JGP, 1991 WL 294564 (D.D.C. Dec.31, 1991) (memorandum), reprinted in J.A. 8-9. Gardner then sought reconsideration of the referral to arbitration from the District Court, or, in the alternative, certification for interlocutory appeal. The District Court denied this motion, and Gardner was forced to go to arbitration. See Gardner v. Benefits Communications Corp., No. 91-0536 (D.D.C. June 16, 1992) (memorandum order), reprinted in J.A. 11-13.

On January 7, 1993, Gardner submitted her claims to NASD. A hearing was held before a panel of three arbitrators on January 27 through February 1, 1994. On April 11, 1994, the panel entered a decision in favor of Gardner, but awarded her only $15,000. See Gardner Arbitration Award, reprinted in J.A. 110-15. The arbitration panel also assessed $3,000 in "forum fees" against Gardner. See id. at 113.

On April 28, 1994, only seventeen days after the panel decision was issued, Gardner promptly sought a new trial date from the District Court, arguing that the court should reconsider its prior ruling compelling arbitration, that the arbitration award was not final and did not preclude a de novo trial of Gardner's claims, and that the arbitrators had erred in their award. However, it was almost four years before the District Court acted on Gardner's motion. In fact, on January 20, 1995, about nine months after moving for a trial date, Gardner returned to the District Court to plead for a final determination in her case; this plea fell on deaf ears, for over three more years passed before the District Court ruled on Gardner's motion. Finally, on March 12, 1998, the District Court denied Gardner's request for a new trial, but modified the NASD award in two ways. See Gardner v. Benefits Communications Corp., No. 91-0536 (D.D.C. Mar.12, 1998) (order), reprinted in J.A. 20. First, the trial court found that the assessment of "forum fees" against Gardner was unlawful under Cole v. Burns International Security Services, 105 F.3d 1465 (D.C.Cir.1997); accordingly, the assessment of $3,000 against Gardner in forum fees was struck from the NASD award. See Gardner v. Benefits Communications Corp., No. 91-0536 (D.D.C. Mar.12, 1998) (memorandum), reprinted in J.A. 17. In addition, the trial court found that Gardner was the prevailing party and, thus, was entitled to attorney's fees and costs. See J.A. 17-18. The District Court, however, stayed the petition for attorney's fees pending her appeal to this court.

II. ANALYSIS

On appeal, Gardner argues, inter alia, that it was improper for the District Court to compel arbitration of her statutory discrimination claims against BCC. In order to determine the propriety of this decision, we must examine the language of Gardner's U-4 form as well as the language of the NASD Code and By-Laws.

The fifth paragraph of the U-4 form signed by Gardner states, "I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the organizations with which I register." J.A. 61. Gardner registered...