Warner Protective Serv. v. Equal Employment Opp Comm'n

Decision Date17 April 2001
Docket NumberNo. 00-5094,00-5094
Citation245 F.3d 831
Parties(D.C. Cir. 2001) Borg-Warner Protective Services Corporation, Appellant v. Equal Employment Opportunity Commission, Appellee
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeal from the United States District Court for the District of Columbia (99cv00861)

Priscilla L. Hapner argued the cause for appellant. With her on the briefs were John M. Stephen and Thomas P. Steindler.

Robert J. Gregory, Attorney, Equal Employment Opportunity Commission, argued the cause for appellee. On the brief were Philip B. Sklover, Associate General Counsel, and Geoffery L. J. Carter, Attorney.

Before: Williams, Randolph, and Tatel, Circuit Judges.

Opinion for the Court filed by Circuit Judge Randolph.

Concurring opinion filed by Circuit Judge Williams, with whom Circuit Judge Tatel joins.

Randolph, Circuit Judge:

Since 1991, Borg-Warner Protective Services Corporation has required its employees to sign, as a condition of employment, some form of an arbitration agreement or, as the company calls it, a "Pre-Dispute Resolution Agreement." A typical version of the agreement provides that if the employee brings suit on an employmentrelated claim, Borg-Warner may insist on arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. 1 et seq., before a single arbitrator of "all matters directly or indirectly related" to the individual's recruitment, employment and termination, including "claims involving laws against discrimination ...." The Equal Employment Opportunity Commission considers such agreements unenforceable in regard to claims arising under Title VII of the Civil Rights Act of 1964, and has spelled out its position in a "Policy Statement on Mandatory Binding Arbitration of Employment Disputes as a Condition of Employment" (July 10, 1997) ("Policy Statement").

Borg-Warner brought this action against the EEOC in the district court seeking a declaratory judgment that its arbitration agreements were enforceable and that it had not violated Title VII by insisting that its employees sign such agreements as a condition of their employment. The company also sought an injunction nationwide in scope, forbidding "the EEOC from issuing determinations to the contrary or attacking the facial validity of arbitration agreement[s] through litigation." According to the complaint, the events precipitating this action were as follows. On December 10, 1998, Rudy Lee, a former Borg-Warner employee, filed a charge with the EEOC's Seattle, Washington, office alleging that Borg Warner had discriminated against him on the basis of his race. After an investigation, the EEOC found insufficient evidence to support the charge. Although Lee had not complained about the arbitration agreement, the EEOC District Director issued a "determination," a finding that there was "reasonable cause" to believe a Title VII violation had occurred when Borg-Warner required Lee to sign the arbitration agreement as a condition of employment. The EEOC invited the company and Lee to engage in conciliation to "eliminate the alleged unlawful practices." In a letter addressed to Borg-Warner, the EEOC asked the company to agree to cease using such agreements, and to provide notice to all employees that it had rescinded its policy favoring mandatory arbitration. Borg-Warner refused and filed this action a few days later.

On the EEOC's motion to dismiss for lack of subject matter jurisdiction, the district court held that the complaint did not arise under Title VII and so jurisdiction could not rest on 28 U.S.C. 1331, 28 U.S.C. 1337 or 28 U.S.C. 1343. BorgWarner Protective Services Corp. v. EEOC, 81 F. Supp. 2d 20, 24-25 (D.D.C. 2000). The court found nothing in Title VII to give an employer a cause of action against the EEOC. Id. Borg-Warner could not invoke the Administrative Procedure Act, the court held, because neither the EEOC's Policy Statement nor its determination in the Lee case constituted "final" agency action. Id. at 26-28. The determination was merely tentative and interlocutory. The Policy Statement did not finally fix any obligation on the part of Borg-Warner. As to the company's request for a declaratory judgment, the court held that although it had subject matter jurisdiction, Borg-Warner lacked standing because the company has not alleged injury that could "be redressed by a favorable decision." Id. at 29.


We have no doubt the district court had subject matter jurisdiction over Borg-Warner's complaint under 28 U.S.C. 1331: "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." This means, as Professor Mishkin put it in his classic article, that "the plaintiff must be contending that a federally ordained rule specifically creates his cause of action." Paul J. Mishkin, The Federal Question in the District Courts, 53 Colum. L. Rev. 157, 164 (1953). "Any national source," he added, "will suffice...." Id. Or as Justice Holmes wrote in American Well Water Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260 (1916), a "suit arises under the law that creates the cause of action." These formulations scarcely exhaust the definitions of federal question jurisdiction, see Franchise Tax Board of California v. Construction Laborers Vacation Trust, 463 U.S. 1, 8-9 (1983), but they are surely at the heart of the matter.

Borg-Warner's complaint "arises under" federal law in the following respects. The company alleges a cause of action based on the Administrative Procedure Act: it contends that the APA entitles it to judicial review of the EEOC's Policy Statement and the EEOC's determination that Lee had a right to sue for a violation of Title VII. Both the APA and Title VII are federal laws, and so the claims satisfy the "arising under" requirement. It is of no moment whether Borg-Warner's claims are meritless or would eventually fail. A claim does not have to be a good one for the court to have subject matter jurisdiction over it. See, e.g., Bell v. Hood, 327 U.S. 678 (1946). Borg-Warner's request for a declaratory judgment also arises under federal law. "Federal courts have regularly taken original jurisdiction over declaratory judgment suits in which, if the declaratory judgment defendant [here the EEOC] brought a coercive action to enforce its rights, that suit would necessarily present a federal question." Franchise Tax Bd., 463 U.S. at 19.


Subject matter jurisdiction is one thing. Ripeness, standing, justiciability and the like, all of which the district court invoked in dismissing the complaint, are quite another. To put matters into perspective, we need to take stock of the state of the law regarding arbitration agreements and Title VII.

The EEOC has been waging a losing battle in its efforts to convince the courts that agreements like Borg-Warner's cannot be enforced to require employees to arbitrate Title VII claims. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991), held that an employer could compel an employee to arbitrate his claim that the employer had violated the Age Discrimination in Employment Act (ADEA), 29 U.S.C. 621 et seq. The Supreme Court considered and rejected Gilmer's contention that compulsory arbitration of an ADEA claim is inconsistent with that statute. However, because Gilmer's arbitration agreement was contained in his application to the New York Stock Exchange to become a registered securities representative, the Court reserved the question whether a compulsory arbitration clause found in an employment contract would be enforceable. 500 U.S. at 25 n.2. Shortly after Gilmer, Congress passed the Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071, 118 of which stated that "[w]here appropriate and to the extent authorized by law, the use of alternative means of dispute resolution, including ... arbitration, is encouraged to resolve disputes arising under" Title VII. 105 Stat. 1081 (reprinted in notes to 42 U.S.C. 1981).

In Cole v. Burns International Security Services, Inc., 105 F.3d 1465 (D.C. Cir. 1997), we relied on Gilmer to affirm a district court order dismissing an employee's Title VII action and compelling the employee to arbitrate with his employer pursuant to a compulsory arbitration agreement. Burns International Security Services, the prevailing party in Cole, is the parent corporation of Borg-Warner and Borg-Warner's arbitration agreements are about the same as the one we held enforceable in Cole.

Therefore, if the district court were to grant the relief Borg-Warner seeks in this case the company would gain nothing in the District of Columbia. Our decision in Cole already rejected the EEOC's position. A declaratory judgment saying as much would be redundant. An injunction against the EEOC (assuming one were proper) is entirely unnecessary. As far as this jurisdiction is concerned, BorgWarner is therefore suffering no injury for which it is entitled to redress. Nor is Borg-Warner suffering any conceivable injury in the First Circuit, the Second Circuit, the Third Circuit, the Fourth Circuit, the Fifth Circuit, the Sixth Circuit, the Seventh Circuit, the Eighth Circuit the Tenth Circuit, or the Eleventh Circuit, all of which have also rejected the EEOC's position. Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 163 F.3d 53 (1st Cir. 1998); Desidero v. National Ass'n of Securities Dealers, Inc., 181 F.3d 198 (2d Cir. 1999); Seus v. John Nuveen & Co., 146 F.3d 175, 182 (3d Cir. 1998); Austin v. Owens-Brockway Glass Container, Inc., 78 F.3d 875 (4th Cir. 1996); Alford v. Dean Witter Reynolds, Inc., 939 F.2d 229 (5th Cir. 1991); Willis v. Dean Witter Reynolds, Inc., 948 F.2d 305 (6th Cir. 1991); Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361 (7th Cir. 1999); Patterson v. Tenet Healthcare, Inc., 113 F.3d 832 (8th Cir. 1997); Metz v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,...

To continue reading

Request your trial
16 cases
  • Reliable Auto. Sprinkler v. Consumer Prod. Safety
    • United States
    • U.S. District Court — District of Columbia
    • 28 Noviembre 2001
    ...thus, it is arguably not even an agency action, much less a final one. See AT & T, 270 F.3d 973, at 975; Borg-Warner Protective Serv. Corp. v. EEOC, 245 F.3d 831, 836 (D.C.Cir.2001) (holding that an EEOC letter communicating that the agency had reasonable cause to believe that the employer ......
  • North v. Smarsh, Inc.
    • United States
    • U.S. District Court — District of Columbia
    • 4 Diciembre 2015
    ...of the United States.”). Generally, “a suit arises under the law that creates the cause of action.” Borg – Warner Protective Servs. Corp. v. EEOC , 245 F.3d 831, 833 (D.C.Cir.2001) (quoting American Well Works Co. v. Layne & Bowler Co. , 241 U.S. 257, 260, 36 S.Ct. 585, 60 L.Ed. 987 (1916) ......
  • E.E.O.C. v. Luce, Forward, Hamilton & Scripps
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 3 Septiembre 2002
    ...that compulsory arbitration agreements are `unenforceable' or are `inconsistent' with Title VII."); Borg-Warner Protective Servs. Corp. v. EEOC, 245 F.3d 831, 835 (D.C.Cir. 2001) ("Duffield ruled only that such agreements are `unenforceable' with respect to Title VII claims."). We respectfu......
  • City of Jersey City v. Consol. Rail Corp..
    • United States
    • U.S. District Court — District of Columbia
    • 28 Septiembre 2010
    ...must have a concrete interest in the outcome of the litigation to have standing. See, e.g., Borg–Warner Protective Servs. Corp. v. Equal Emp't Opportunity Comm'n, 245 F.3d 831, 834 (D.C.Cir.2001) (holding that an employer lacked standing to seek a declaratory judgment affirming the enforcea......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT