Murray v. United Food & Commercial Workers Union, 01-1602.

• Citation: 289 F.3d 297
• Decision Date: 10 May 2002
• Docket Number: No. 01-1602.,01-1602.
• Parties: Daniel C. MURRAY, Plaintiff-Appellant, v. UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, Local 400; Donald Cash; Christian Sauter, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

289 F.3d 297

Daniel C. MURRAY, Plaintiff-Appellant, v. UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, Local 400; Donald Cash; Christian Sauter, Defendants-Appellees.

No. 01-1602.

United States Court of Appeals, Fourth Circuit.

Argued October 31, 2001.

Decided May 10, 2002.

COPYRIGHT MATERIAL OMITTED

ARGUED: Paul Francis Evelius, Wright, Constable & Skeen, L.L.P., Baltimore, Maryland, for Appellant.

Francine Karen Weiss, Kalijarvi, Chuzi & Newman, P.C., Washington, D.C., for Appellees.

Before WILLIAMS and TRAXLER, Circuit Judges, and HOWARD, United States District Judge for the Eastern District of North Carolina, sitting by designation.

Reversed and remanded by published opinion. Judge TRAXLER wrote the majority opinion, in which Judge WILLIAMS joined. Judge HOWARD wrote a dissenting and concurring opinion.

OPINION

TRAXLER, Circuit Judge.

Daniel C. Murray ("Murray") brought this action against his employer, the United Food & Commercial Workers Union, Local 400 ("Local 400"), and Donald Cash ("Cash"), a union managerial employee, alleging that they discriminated against him on the basis of his race in violation of Title VII of the Civil Rights Act of 1964, see 42 U.S.C.A. §§ 2000e-2000e-17 (West 1994 & Supp.2001), and 42 U.S.C.A. § 1981 (West 1994), when they terminated him from his employment. Murray also alleged a pendent state law claim for defamation against Local 400 and its organizing director, Christian Sauter ("Sauter"), arising from alleged defamatory statements made by Sauter after Murray was fired. The district court granted defendants' motion to dismiss and to compel arbitration of Murray's discrimination claim, and granted defendants' motion to dismiss Murray's defamation claim pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief could be granted. We reverse and remand.

I.

Local 400 of the United Food & Commercial Workers Union is a labor union representing approximately 40,000 members, many of whom are employed in retail food stores. In February 1997, Murray took a leave of absence from his position as a produce clerk at Giant Food, Inc., and began working full-time as a union organizer for Local 400. As a condition of his employment with Local 400, Murray was required to sign an agreement containing the following arbitration clause:

All Representatives are employed under the terms of the Bylaws of Local 400. Any claims of ... discrimination which... ha[ve] not been properly remedied through [Local 400's internal discrimination complaint process], shall be determined and adjudicated through final and binding arbitration. A single arbitrator shall be chosen by the alternate strike method from a list of arbitrators provided by the [Local 400] President's office. Such arbitrator shall not have the authority to alter[,] change or diminish any power, right or authority granted to the President or Acting President of Local 400 under the terms and conditions of the Bylaws of Local 400.

J.A. 79 (emphasis added).

On June 29, 1998, Local 400 and Donald Cash informed Murray that his employment with Local 400 would be terminated effective July 11, 1998. Murray returned to his position at Giant Food and, on July 10, 1998, instituted this action against Local 400 and Cash under Title VII and § 1981. Murray, a 42-year-old white male, alleged that Local 400 and Cash, who is African American, terminated "his employment on account of his race even though he is qualified for that employment, and ... defendants plan to retain similarly situated African American employees because of their race." J.A. 8. Among other relief, Murray sought reinstatement to his position as a union organizer and monetary damages.

In September 1998, Murray amended his complaint to add Christian Sauter, Local 400's Organizing Director, as a defendant and asserted a state law defamation claim against Local 400 and Sauter. Murray alleged that Sauter defamed him after he was terminated from his position as a union organizer with Local 400 by telling one or more Giant Food employees that Murray "was not a good organizer." J.A. 230.

Defendants filed a motion to dismiss and to compel arbitration of Murray's discrimination claim, as well as a motion to dismiss Murray's defamation claim for failure to state a claim for relief under Maryland law. The district court granted both motions, holding that (1) the discrimination claim was subject to the arbitration agreement between Local 400 and Murray, and (2) Sauter's statements failed to state an actionable defamation claim under Maryland law. The district court subsequently denied Murray's motion to reconsider, and the parties proceeded to arbitration of Murray's discrimination claim.

At the conclusion of arbitration, the single arbitrator ruled in favor of Local 400 and Cash, concluding that Murray had failed to establish a prima facie case of unlawful discrimination and, in any event, that Local 400 had articulated legitimate nondiscriminatory reasons for Murray's discharge. The district court then confirmed the award and entered final judgment. Murray now appeals the district court's grant of defendants' motion to dismiss and to compel arbitration of his discrimination claim, as well as the district court's dismissal of his defamation claim under Rule 12(b)(6).

II.

We begin with Murray's contention that the district court erred in granting the motion to dismiss and to compel arbitration of his race discrimination claim brought under Title VII and § 1981 against Local 400 and Cash.

A.

The Federal Arbitration Act ("FAA"), 9 U.S.C.A. §§ 1-16 (West 1999) represents "a liberal federal policy favoring arbitration agreements," Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), in order "`to reverse the longstanding judicial hostility to arbitration agreements ... and to place arbitration agreements upon the same footing as other contracts,'" Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 89, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000) (alteration in original) (quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991)). "Pursuant to th[is] liberal policy, `any doubts concerning the scope of arbitral issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.'" O'Neil v. Hilton Head Hosp., 115 F.3d 272, 273-74 (4th Cir.1997) (quoting Moses H. Cone, 460 U.S. at 24-25, 103 S.Ct. 927). When parties have entered into a valid and enforceable agreement to arbitrate their disputes and the dispute at issue falls within the scope of that agreement, the FAA requires federal courts to stay judicial proceedings, see 9 U.S.C.A. § 3, and compel arbitration in accordance with the agreement's terms, see 9 U.S.C.A. § 4.

It is settled that the provisions of the FAA, and its policy favoring the resolution of disputes through arbitration, apply to employment agreements to arbitrate discrimination claims brought pursuant to federal statutes, including Title VII of the Civil Rights Act. See Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 109, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001); Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 937 (4th Cir.1999). Such an agreement is enforceable because "`[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than judicial, forum.'" Hooters, 173 F.3d at 937 (quoting Gilmer, 500 U.S. at 26, 111 S.Ct. 1647). If "the prospective litigant effectively may vindicate his or her statutory cause of action in the arbitral forum," the claim is appropriately subjected to arbitration in lieu of litigation. Green Tree, 531 U.S. at 89, 121 S.Ct. 513 (internal quotation marks and alteration omitted).

The strength of this well-established policy favoring the enforcement of valid arbitration agreements, however, does not end our inquiry. Rather, courts are called upon to determine whether the particular dispute at issue is one to be resolved through arbitration. In doing so, "we engage in a limited review to ensure that the dispute is arbitrable —i.e., that a valid agreement to arbitrate exists between the parties and that the specific dispute falls within the substantive scope of that agreement." Hooters, 173 F.3d at 938 (internal quotation marks omitted). Although "highly circumscribed," the "judicial inquiry ... is not focused solely on an examination for contractual formation defects such as lack of mutual assent and want of consideration." Id. Rather, the FAA specifically contemplates that parties may also seek revocation of an arbitration agreement "under `such grounds as exist at law or in equity,' including fraud, duress, and unconscionability." Sydnor v. Conseco Fin. Servicing Corp., 252 F.3d 302, 305 (4th Cir.2001) (quoting 9 U.S.C.A. § 2). And, of course, agreements to arbitrate federal statutory claims, such as those pursued under Title VII, may be revoked if the prospective litigant demonstrates that it cannot "effectively ... vindicate his or her statutory cause of action in the arbitral forum." Green Tree, 531 U.S. at 89, 121 S.Ct. 513 (internal quotation marks and alteration omitted); cf. Bradford v. Rockwell Semiconductor Sys., Inc., 238 F.3d 549, 556 (4th Cir.2001) ("[T]he crucial inquiry ... is whether the particular claimant has an adequate and accessible substitute forum in which to resolve his statutory rights....").

B.

With these principles in mind, we turn to the question of whether a valid and enforceable arbitration agreement existed between Murray and Local 400 which compelled Murray to submit his race discrimination claim to arbitration. Murray asserts that the arbitration clause, drafted by Local 400 and to which he was required to accede as...