Metz v. Merrill Lynch, Pierce, Fenner & Smith, Inc.

• Citation: 39 F.3d 1482
• Decision Date: 08 November 1994
• Docket Number: 91-6292,Nos. 91-6285,92-6048 and 92-6064,91-6315,s. 91-6285
• Parties: 66 Fair Empl.Prac.Cas. (BNA) 439 Kelli Lyn METZ, Plaintiff-Appellee and Cross-Appellant, v. MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., Defendant-Appellant and Cross-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 1482

39 F.3d 1482

66 Fair Empl.Prac.Cas. (BNA) 439

Kelli Lyn METZ, Plaintiff-Appellee and Cross-Appellant, v. MERRILL LYNCH, PIERCE, FENNER & SMITH, INC. Defendant-Appellant and Cross-Appellee.

Nos. 91-6285, 91-6292, 91-6315, 92-6048 and 92-6064.

United States Court of Appeals Tenth Circuit.

Nov. 8, 1994.

Submitted on the briefs: ^*

Jim T. Priest and Dixie L. Coffey of McKinney, Stringer & Webster of Oklahoma City, OK, on the briefs, for plaintiff-appellee/cross-appellant Kelli Lyn Metz.

Bruce W. Day, Rodney J. Heggy and Stuart W. Emmons of Day, Hewett & Federman, Oklahoma City, OK, on the briefs, for defendant-appellant/cross-appellee Merrill Lynch, Pierce, Fenner & Smith, Inc.

Before HOLLOWAY, McKAY, and BARRETT, Circuit Judges.

HOLLOWAY, Circuit Judge.

Defendant Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch) appeals from a judgment for $53,746.67 plus attorney's fees. The judgment was entered in favor of plaintiff Kelli Lyn Metz (Metz) on her Title VII claim of unlawful discrimination and discharge due to her pregnancy. See 42 U.S.C. Sec. 2000e. ¹ After a bench trial on the Title VII claim, the district court entered findings and conclusions upholding Metz' claim and awarded recovery for her on her claim and attorney's fees. Our jurisdiction rests on 28 U.S.C. Sec. 1291.

On appeal, Merrill Lynch asserts that a change in the law requires a remand for arbitration of Metz' Title VII claim. In the alternative, Merrill Lynch claims the following errors occurred at trial: (1) Metz failed to establish a prima facie case, and even if she did, she did not carry her ultimate burden of persuasion that she was fired because she was pregnant; and (2) the amount of attorney's fees awarded to Metz was excessive. Metz cross-appeals the district court's denial of her claim for lost fringe benefits.

I

Metz graduated from the University of Oklahoma in December 1982 with a degree in finance. In May 1983 she went to work for Merrill Lynch as a sales assistant, basically a secretarial position, in Merrill Lynch's Oklahoma City office. In January 1984 Metz became a financial consultant, also known as an account executive or stock broker, and held that position until she was discharged on September 12, 1988.

Merrill Lynch measured the performance of its brokers by commissions earned or production. Metz' production was generally lower than that of other brokers with similar lengths of service, but she was recognized as having sufficient production in 1985 and 1986. However, because of poor production, Metz was placed on probation in 1987 and 1988.

In late August of 1988 Metz informed Merrill Lynch's management personnel that she was pregnant. When Metz' immediate supervisor learned she was pregnant, he cautioned Metz that others who had taken maternity leave had not kept up their production upon return to work, or had not returned to work at all. The supervisor also informed Metz that he would decide how to redistribute her accounts during her leave, a deviation from other leaves in which the broker made the decision on how his or her accounts would be treated.

On September 12, 1988, Metz had a heated discussion with her immediate supervisor about a problem with one of Metz' accounts. Shortly thereafter, Metz was fired.

II

Because the procedural chronology of this litigation is crucial, we will detail its development:

On September 5, 1989, Metz filed a complaint asserting Title VII, ERISA, and state common law claims in the district court. On September 27, 1989, Merrill Lynch made a timely motion to compel arbitration of these claims and to stay the district court's proceedings. The request for arbitration was based on Metz's registration as a broker with the National Association of Securities Dealers (NASD). Metz's registration application, which she signed, contained a clause requiring her to arbitrate all claims or disputes between her and Merrill Lynch.

On March 8, 1990, the district court granted in part and denied in part Merrill Lynch's motion to compel arbitration. The court compelled Metz's ERISA and common law claims to go to arbitration but held, citing Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974), that Title VII claims are not subject to compulsory arbitration. In Alexander the Supreme Court, in a unanimous opinion, stated that "[a]rbitral procedures, while well suited to the resolution of contractual disputes, make arbitration a comparatively inappropriate forum for the final resolution of rights created by Title VII." Id. at 56, 94 S.Ct. at 1023. Accordingly, the district court declined to compel Metz's Title VII claim to be arbitrated. Merrill Lynch filed a motion for reconsideration, which was denied.

In May 1990 Merrill Lynch, pursuant to 9 U.S.C. Sec. 15 of the Federal Arbitration Act (FAA), which has since been redesignated Sec. 16 by Pub.L. No. 101-650, Title III, Sec. 325(a)(1), Dec. 1, 1990, Stat. 5120, appealed from the district court's March 8, 1990, order denying arbitration of the Title VII claim. ² However on August 15, 1990, Merrill Lynch filed a motion to dismiss that interlocutory appeal because a number of circuits had held that "Title VII claims were not arbitrable." Brief of Appellant/Cross-Appellee at 4 n. 2. ³ On August 24, 1990, we entered an order dismissing that appeal. Metz v. Merrill Lynch, Pierce, Fenner & Smith, Inc., No. 90-9166, slip op. (10th Cir. August 24, 1990).

A bench trial was held on June 10 and 11, 1991, and on July 8, 1991, the district court entered judgment in favor of Metz on her Title VII claim for $53,746.67. On August 7, 1991, Merrill Lynch filed a notice of appeal from that judgment pursuant to 28 U.S.C. Sec. 1291. Following the district court's denial on August 7, 1991, of its "Motion for Order Nunc Pro Tunc or in the Alternative to Alter or Amend the Judgment", Merrill Lynch on August 16 filed another notice of appeal from the final judgment.

On September 17, 1991, Merrill Lynch filed a Rule 60(b)(6) motion to vacate the judgment due to a change in the law and again sought to compel arbitration of the Title VII claim. This motion was denied by the district court on January 14, 1992. Shortly thereafter, Merrill Lynch made a motion for reconsideration of that ruling, which was denied on January 28, 1992. On January 30, 1992, Merrill Lynch appealed from the district court's order denying its Rule 60(b)(6) motion.

III

On appeal, Merrill Lynch says this case should be remanded for arbitration of Metz's Title VII claims because the law has changed since it moved for dismissal of its interlocutory appeal from the district judge's March 8, 1990 denial of arbitration of the Title VII claim. Merrill Lynch argues that Title VII claims are now subject to compulsory arbitration relying on Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991), decided May 13, 1991, some four weeks before the June 10-11, 1991 trial of Metz' Title VII case, inter alia. Gilmer held that age discrimination claims are subject to mandatory arbitration. Id. at 35, 111 S.Ct. at 1657. One week later, on May 20, the Court remanded for reconsideration in light of Gilmer the case of Alford v. Dean Witter Reynolds, Inc., 712 F.Supp. 547 (S.D.Tex.1989), aff'd, 905 F.2d 104 (5th Cir.1990), cert. granted, judgment vacated, and case remanded, 500 U.S. 930, 111 S.Ct. 2050, 114 L.Ed.2d 456, rev'd on remand, 939 F.2d 229 (5th Cir.1991), Alford being a Title VII sex discrimination and sexual harassment case.

On remand in Alford the Fifth Circuit held that Title VII claims, like age discrimination claims, are subject to mandatory arbitration. Alford v. Dean Witter Reynolds, Inc., 939 F.2d 229, 230 (5th Cir.1991). We agree with the Fifth Circuit in that respect. Accord Hirras v. Nat'l R.R. Passenger Corp., 10 F.3d 1142, 1146 (5th Cir.), cert. granted, judgment vacated on other grounds, and case remanded, --- U.S. ----, 114 S.Ct. 2732, 129 L.Ed.2d 855 (1994); Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698, 700 (11th Cir.1992); Mago v. Shearson Lehman Hutton Inc., 956 F.2d 932, 935 (9th Cir.1992); Willis v. Dean Witter Reynolds, Inc., 948 F.2d 305, 312 (6th Cir.1991). "Any broad public policy arguments against such a conclusion were necessarily rejected by Gilmer." Alford, 939 F.2d at 230. Gilmer noted that "[i]t is by now clear that statutory claims may be the subject of an arbitration agreement, enforceable pursuant to the FAA." 500 U.S. at 26, 111 S.Ct. at 1652.

Gilmer also held that Alexander, which was relied on by the district judge in this case in denying Merrill Lynch's motion to compel arbitration, is factually distinguishable for several reasons, including: the Alexander Court did not have before it the issue whether an agreement to arbitrate statutory claims is enforceable; "[r]ather, [Alexander ] involved the quite different issue whether arbitration of contract-based claims precluded subsequent judicial resolution of statutory claims[ ]"; the Alexander Court, unlike the Gilmer Court, was confronted with the issue of arbitration in the context of a collective bargaining agreement where claimants were represented by unions, and as such, there was a concern in that case for the tension between collective representation and individual statutory rights; and Gilmer was a Federal Arbitration Act case, while Alexander was not. 500 U.S. at 35, 111 S.Ct. at 1657. See also Livadas v. Bradshaw, --- U.S. ----, ----, n. 21, 114 S.Ct. 2068, 2080 n. 21, 129 L.Ed.2d 93 (1994). ⁴ Gilmer also explicitly acknowledged that the Alexander Court's view that "arbitration [is] inferior to the judicial process for resolving statutory claims[ ]" has been "undermined" by subsequent Supreme Court cases. 500 U.S. at 33 n. 5, 111 S.Ct. at 1656 n. 5.

Our reading of Gilmer, and the inferences that, in light of Gilmer 's reasoning, can be drawn from the Court's vacating and remanding Alford, support the conclusion that...