Williams v. Cigna Financial Advisors Inc.

• Decision Date: 06 December 1999
• Docket Number: No. 97-10985,97-10985
• Citation: 197 F.3d 752
• Parties: (5th Cir. 1999) ARTHUR H WILLIAMS, Plaintiff-Counter Defendant-Appellant, v. CIGNA FINANCIAL ADVISORS INCORPORATED; CIGNA INDIVIDUAL FINANCIAL SERVICES; Defendants-Appellees, CONNECTICUT GENERAL LIFE INSURANCE COMPANY, Defendant-Counter Claimant-Appellee
• Court: U.S. Court of Appeals — Fifth Circuit

Page 752

197 F.3d 752 (5th Cir. 1999)

ARTHUR H WILLIAMS, Plaintiff-Counter Defendant-Appellant, v. CIGNA FINANCIAL ADVISORS INCORPORATED; CIGNA INDIVIDUAL FINANCIAL SERVICES; Defendants-Appellees, CONNECTICUT GENERAL LIFE INSURANCE COMPANY, Defendant-Counter Claimant-Appellee.

No. 97-10985

UNITED STATES COURT OF APPEALS For the Fifth Circuit

December 6, 1999

[Copyrighted Material Omitted] Appeal from the United States District Court for the Northern District of Texas

Before POLITZ, WIENER and DENNIS, Circuit Judges.

DENNIS, Circuit Judge:

Arthur Williams appeals from the district court's judgment confirming an arbitration panel's award (1) rejecting his claims against defendants based on age discrimination and retaliation under the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. 621 et seq., and (2) granting defendants' counterclaim against Williams holding him liable for and ordering him to pay $18,945 in satisfaction of his unpaid promissory notes held by one of the defendants. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 1987, Cigna Financial Advisors, Inc. (Cigna) hired Williams as a Registered Representative (agent) at the age of 58. As a condition of his employment, Williams registered with the National Association of Securities Dealers (NASD). In doing so, he signed a Uniform Application For Securities Industry Registration or Transfer (U-4 Form) which provided that "any dispute, claim or controversy that may arise between me and my firm . . . is required to be arbitrated under the rules, constitutions, or by-laws of the organizations with which I register." In 1993, Williams had the lowest sales of 15 similarly situated agents and owed Cigna $29,613 for advances on future commissions and a loan for the purchase of a computer.

Larry Phillips, Cigna assistant regional vice-president, and James Lasater, Cigna regional vice-president, met with Williams on December 22, 1993. They informed Williams that, because of his consistently unprofitable performance and growing indebtedness, he could not continue as an active agent, unless he immediately reduced his debt by $18,000. Otherwise, they said he must become a retired agent. The evidence is in dispute as to whether they offered Williams the option of becoming a broker instead of retiring.¹ Phillips encouraged Williams to sign a form changing his status to retired agent effective January 1, 1994. Phillips stated that if Williams failed to elect one of the options offered, he would be terminated. Williams said he was not willing to retire, and he did not accept any of the options offered. The evidence is in dispute as to whether Williams rejected the offers at that point or simply left the meeting without indicating whether he would accept any of them.

Williams filed a complaint with the Equal Employment Opportunity Commission (EEOC) on January 5, 1994, claiming that he had been discriminated against in violation of the ADEA. In his first complaint, Williams alleged that he was given the options of retiring or resigning during the December 22 meeting with Phillips and Lasater. When Phillips learned of the EEOC complaint he requested a meeting with Williams. Williams met with Phillips on January 12, 1994, in Phillips's office and surreptitiously recorded their conversation. The transcript of this conversation covers some 54 pages. Phillips acknowledged that the transcript accurately reports the discussion. During this conversation, Phillips and Williams stated their respective positions repetitively and unyieldingly, but with little rancor. Phillips maintained that Williams's abysmal sales record and heavy indebtedness to the company, and not his age, had brought about the decision to terminate him from active agent status. Phillips told Williams that to continue as an active agent he had to pay $18,000 on his company debt of approximately $30,000 immediately and pay an additional $500 each month until his sales commissions increased enough to cover his operating and office expenses. Williams said that he thought he was being discriminated against because of his age. He expressed his willingness to pay his debt and to work to increase his sales. But he contended that he could not do so unless he continued as an active agent with the full support of the organization.

Phillips, in effect, said that the company had gone as far as it was willing to go; that to allow Williams to maintain active status would add to organizational expenses and increase Williams's debt with little prospect of a dramatic increase in his sales. In response to Williams's question, Phillips said it would be acceptable for Williams to borrow $18,000 from a third person in order to stay in active agent status with the organization. But Williams did not pursue that idea. Instead, he said, "Well, I don't have anything that I can say to you that I'm going to do or not going to do. I just want the opportunity to serve my clients and to make money." At that point Phillips asked what Williams planned to do about "this discrimination thing." Williams said he did not plan to stop it but to let it run its course. Phillips responded, "Okay. What I want you to do is I want you to get all your stuff and move all your stuff out of the office, okay, ASAP." When Williams asked, "Are you kicking me out?", Phillips replied, "Yeah. I have been planning to kick you out for about three weeks."

Phillips explained to Williams that as an active agent he had been the lowest producer the previous year, that other active agents who failed to meet production requirements were paying $500 per month, that none of them owed the company nearly as much as Williams did, and that he did not believe Williams could pay $500 per month; but, Phillips ended up saying, "pay me and you can stay . . . if you come clean with this deal, you pay me off, we got a different deal. If not, leave. All I want is my money." Phillips refused Williams's request that he be allowed to take his client files, because under the agreement Williams signed the files were CIGNA property. When Williams asked what would happen if he continued to come into the CIGNA office and try to do business, Phillips told him that he and his belongings would be moved out.

On January 13, 1994, Williams filed a retaliation complaint with the EEOC. On January 14, 1994, Williams recorded a shorter meeting he had with Phillips. Phillips asked Williams, "Have you thought . . . of anything that you would like to get out of it that would cause you to drop the charge?" Williams replied, "Nothing at the moment . . . ." Phillips agreed to give Williams assistance in packing his property into a truck, to forward his mail and phone calls, and to let him have access to his office during regular hours for a period of time to tend to clients he was still seeing. Phillips added, "We'll do everything that we can to help you, Arthur. I just, for the life of me, I cannot understand why you would go down there and file that suit and put yourself through this."***"Because you wouldn't have gone through this if you wouldn't have filed that suit." Williams complained about not being permitted to take his client files because of the CIGNA rules that provided the client files were company property. Phillips said, "Well, you can start changing these rules now. I mean, if you want to negotiate some deal, you can start changing this stuff. You know, as long as you got that grievance hanging over our head, we are just going right down the policy line . . . . the ball is in your court."

The transcripts of Williams's recordings of the two meetings do not indicate that he ever offered a concrete proposal for repayment of any of his debt or that he ever stated that he would sign a retirement agreement.

Williams obtained an EEOC right to sue letter and brought suit against Cigna in state court for age discrimination in violation of the ADEA and the Texas Commission on Human Rights Act of 1983, and for unlawful retaliation in violation of the ADEA. Cigna removed the case to federal court and obtained a stay pending arbitration. The district court denied Cigna's motion but on appeal, a prior panel of this court reversed and remanded for entry of a stay. See Williams v. Cigna Financial Advisors, Inc., 56 F.3d 656, 658 (5th Cir. 1995) (holding that the dispute was arbitrable under the arbitration agreement in the U-4 Form signed by Williams). Williams submitted his claims to an arbitration panel pursuant to NASD regulations. Cigna filed a counter claim based on Williams's debt to the company. Following the hearing, the arbitration panel issued a written award denying Williams's ADEA claims and awarding Cigna $18,945 on its counterclaim. The panel's written opinion fully states the issues submitted and the conclusions reached, but it gives no rationale or reasons for the decision.

Williams moved the district court to vacate the arbitration award, and the defendants moved to have it confirmed. In its memorandum opinion and order the district court assigned reasons for its rejection of some of Williams's arguments, viz., that the arbitration award should be vacated because the panel did not give reasons for its decision, that Williams was denied adequate discovery or a continuance, and that the arbitrators were not sufficiently qualified. The district court rejected Williams's other arguments without assigning specific reasons. After the district court entered a final judgment, Williams appealed.

II. STANDARD OF REVIEW

Under the FAA, review of a district court decision confirming an arbitration award on the ground that the parties agreed to submit their dispute to arbitration proceeds like review of any other district court decision finding an agreement between parties, e.g., accepting findings of fact that are not "clearly erroneous" but deciding questions of law de novo. See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 948, 115 S. Ct. 1920, 131 L.Ed.2d...