Haskins v. Prudential Insurance Co.
| Decision Date | 08 March 2000 |
| Docket Number | No. 99-3486,99-3486 |
| Parties | (6th Cir. 2000) Robert L. Haskins, Sr., Plaintiff-Appellee, v. Prudential Insurance Company of America, a/k/a The Prudential Insurance and Financial Services, Defendant-Appellant. Argued: |
| Court | U.S. Court of Appeals — Sixth Circuit |
Appeal from the United States District Court for the Northern District of Ohio at Toledo. No. 98-07711--James G. Carr, District Judge.
Francis J. Landry, WASERMAN, BRYAN, LANDRY & HONOLD, Toledo, Ohio, for Appellee.
Carole S. Katz, REED, SMITH, SHAW & McCLAY, Pittsburgh, Pennsylvania, Fritz Byers, Toledo, Ohio, for Appellant.
Before: BOGGS and COLE, Circuit Judges; ZATKOFF,* Chief District Judge.
ZATKOFF, D. J., delivered the opinion of the court, in which BOGGS, J., joined. COLE, J. (pp. 241-43), delivered a separate dissenting opinion.
Plaintiff-Appellant Robert L. Haskins ("Haskins") brought this action against his former employer, Defendant-Appellant Prudential Insurance Company of America ("Prudential"). In his complaint, Haskins alleged that he was unlawfully terminated because of his age and race. In response to the complaint, Prudential filed a motion to dismiss Haskins' complaint and compel arbitration, which the district court denied. For the reasons that follow, we REVERSE the judgment of the district court.
Haskins is a fifty-six year-old African-American who was employed by Prudential from 1980 until June 12, 1997. Haskins claims that on this date, he was unlawfully terminated because of his age and race. During his employment with Prudential, Haskins was represented by the United Food and Commercial Worker's International Union. Through the course of his employment with Prudential, Haskins sold instruments registered with the Securities and Exchange Commission and his selling activities were regulated by the National Association of Securities Dealers ("NASD"). Pursuant to NASD requirements and as a condition of continued employment with Prudential, on June 17, 1983, Haskins executed a Uniform Application for Securities Industry Registration or Transfer, which is commonly known as a U-4 Form. The U-4 Form contained the following provision concerning arbitration:
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, as indicated in Question 8.
This clause did not specifically delineate the types of claims subject to arbitration. However, Question 8 on the U-4 Form, which is referred to in the above-quoted arbitration provision, asked Haskins to state the securities organizations with which he planned to register. In response to this question, Haskins indicated he planned to register with the NASD. One of the rules in the NASD Code stated that the following matters shall be arbitrated:
[A]ny dispute, claim, or controversy arising out of or in connection with the business of any member of the Association, or arising out of the employment or termination of employment of associated person(s) with any member . . . .
NASD Manual, Code of Arbitration Procedure Rule 10101.1
The U-4 Form signed by Haskins also contains two acknowledgments that he understood the contents of the U-4 Form. The first acknowledgment states: "I hereby certify that I have read and understand the foregoing statements and that my responses are true and complete to the best of my knowledge." The second acknowledgment reads as follows:
I hereby apply for registration with the organizations and states indicated in Question 8 and, in consideration of such organizations and states receiving and considering my application, I submit myself to the jurisdiction of such states and organizations and hereby certify that I have read, understand and agree to abide by, comply with, and adhere to all the provisions, conditions and covenants of the statutes, constitutions, certificates of incorporation, by-laws and rules and regulations of the states and organizations as they are and may be adopted, changed or amended from time to time. . . .
Haskins' signature appears in the space provided under these acknowledgments. Finally, another provision in the U-4 Form was the employer certification, which stated:
To the best of my knowledge and belief, the applicant is currently bonded where required, and, at the time of approval, will be familiar with the statute(s), constitution(s), rules and by-laws of the agency, jurisdiction or self-regulatory organization with which this application is being filed, and the rules governing registered persons, and will be fully qualified for the position for which application is being made herein.
Prudential's branch office manager signed under this provision in the U-4 Form.
On December 4, 1998, Haskins filed a complaint against Prudential, alleging violations of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq., as well as other claims. Soon after Haskins filed his complaint, Prudential filed a motion to dismiss the complaint and compel arbitration. Prudential argued that Haskins had agreed to arbitrate the claims presented in his lawsuit and therefore arbitration should be compelled. Haskins countered that he should not be compelled to arbitrate his claims against Prudential because he was never provided with a copy of the NASD Code, no agent of Prudential ever familiarized him with the NASD Code, and the certification of Prudential's branch manager was untrue. Haskins also argued that compelling arbitration would interfere with his collective bargaining rights.
In its opinion, the district court first decided that compelling arbitration would not interfere with Haskins' collective bargaining rights.2 Second, the district court pointed out that Haskins did not discuss the arbitration clause with any of Prudential's agents and that he did not receive a copy of the NASD Code. Because Haskins did not discuss the arbitration clause with one of Prudential's agents, nor did he receive a copy of the NASD rules, the district court concluded that Haskins "was not aware of the statutory and state rights he surrendered by filling out Question 8 and signing the U-4 Form."
The district court then denied Prudential's motion, relying upon Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 170 F.3d 1 (1st Cir. 1999), in which the First Circuit found that under the circumstances before it, compelling arbitration was not "appropriate" under the 1991 Civil Rights Act. The district court employed the standard set forth in Rosenberg and found that compelling arbitration would not be "appropriate," stating:
As in Rosenberg, plaintiff signed a U-4 Form containing an Arbitration Clause which did not list the types of disputes covered, instead incorporating the rules, constitutions, and by-laws of NASD. The NASD Code, like the [New York Stock Exchange] Rules in Rosenberg, requires arbitration of controversies arising out of employment or termination of employment. The U-4 Form also contains the same Employer Certification provision as the U-4 agreement in Rosenberg. Like the plaintiff in Rosenberg, [Haskins] did not receive a copy of the NASD Code and no agent of [Prudential] discussed the arbitration clause with him.
The Employer Certification, as in Rosenberg, contemplates steps by [Prudential] which were not taken. Therefore, [Haskins] successfully argues that the arbitration agreement is not "appropriate" under Title VII and the ADEA.
Subsequent to the district court's decision, Prudential filed a motion for interlocutory appeal. This motion was granted in part and denied in part by this court. Although discovery was allowed to continue, this court ordered that no dates for pretrial motions or trial should be scheduled. This appeal followed.
A district court's determination as to whether a dispute is arbitrable is subject to de novo review. See E.E.O.C. v. Frank's Nursery & Crafts, Inc., 177 F.3d 448, 454 (6th Cir. 1999) (citing M & C Corp. v. Erwin Behr GmbH & Co., KG, 143 F.3d 1033, 1037 (6th Cir. 1998)). Further, the court is mindful that in passing the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 et seq., Congress' "preeminent concern" was to enforce private agreements to arbitrate. See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221 (1985). Finally, in deciding this matter, the court considered that there is "a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary." Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24 (1983).
The main issue to be decided in this case is whether Haskins should be compelled to arbitrate his claims even though the U-4 Form did not specifically delineate the claims subject to arbitration and Prudential did not provide Haskins with a copy of the NASD rules pertaining to arbitration. In signing the U-4 Form, Haskins agreed to "arbitrate any dispute, claim or controversy that may arise between" himself and his firm "that is required to be arbitrated under the rules, constitutions, or by-laws of the organizations with which [Haskins] register[ed]." Prudential seeks to hold Haskins to this agreement. Haskins argues that since he never received a copy of the NASD Code, nor did any of Prudential's agents discuss the arbitration clause with him, he should not be required to arbitrate his claims against Prudential.
This is an issue of first impression before this court. Although several courts have adjudicated matters involving facts almost identical to those presented here, they have done so in three different ways. The Ninth Circuit has concluded that "a ...
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