Willis v. Dean Witter Reynolds, Inc.

• Decision Date: 07 November 1991
• Docket Number: No. 91-5100,91-5100
• Citation: 948 F.2d 305
• Parties: 57 Fair Empl.Prac.Cas. (BNA) 386, 57 Empl. Prac. Dec. P 41,079, 60 USLW 2335 Linda WILLIS, Plaintiff-Appellee, v. DEAN WITTER REYNOLDS, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 305

948 F.2d 305

57 Fair Empl.Prac.Cas. (BNA) 386,

57 Empl. Prac. Dec. P 41,079, 60 USLW 2335

Linda WILLIS, Plaintiff-Appellee, v. DEAN WITTER REYNOLDS, INC., Defendant-Appellant.

No. 91-5100.

United States Court of Appeals Sixth Circuit.

Argued Aug. 2, 1991.

Decided Nov. 7, 1991.

Winifred L. Bryant (argued), Richard E. Fitzpatrick (briefed), Gess, Mattingly & Atchison, Lexington, Ky., for Linda Willis.

Anita M. Britton (briefed), Stoll, Keenon & Park, Lexington, Ky., William E. Johnson (argued), Stoll, Keenon & Park, Frankfort, Ky., for Dean Witter Reynolds, Inc.

Carolyn L. Wheeler (briefed), E.E.O.C., Washington, D.C., for E.E.O.C. amicus curiae.

Before KENNEDY and JONES, Circuit Judges and HARVEY, Senior District Judge. ^*

NATHANIEL R. JONES, Circuit Judge.

Defendant Dean Witter Reynolds, Inc. ("Dean Witter") appeals the district court's denial of its motion to compel arbitration and for stay of the proceedings in this Title VII action for sex discrimination. For the reasons that follow, we reverse.

I.

The plaintiff, Linda Willis, originally filed this action in Fayette Circuit Court in August 1990. Her complaint alleged sexual harassment and sexual discrimination claims under Ky.Rev.Stat. § 344.040 as well as common law contract claims of outrage and breach of contract. She had been employed at Dean Witter from October 4, 1982 until May 23, 1989, when she resigned from the company. Her complaint alleged that during the last two years of her employ at Dean Witter, the work environment was "hostile and demeaning to all female employees" and that she "was discharged and/or forced by [Dean Witter] to resign her employment ... on May 23, 1989, because of her sex." J.App. at 9-10.

Dean Witter immediately removed the case to federal court based upon diversity jurisdiction and filed its motion to compel arbitration. Dean Witter's motion to compel arbitration is based upon Willis' execution of a Securities Registration Form U-4 on October 1, 1982. This form is used by the American Stock Exchange, the National Association of Securities Dealers and the New York Stock Exchange ("NYSE") for registration of persons dealing in securities. Willis' registration with the various national securities exchanges was required so that she could perform her work as an account executive with Dean Witter. The arbitration clause of the U-4 Form provides in relevant part:

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.

Securities Registration Form U-4 (in effect October 1982). Rule 347 of the New York Stock Exchange Rules provides:

Any controversy between a registered representative and any member or member organization arising out of the employment or termination of employment of such registered representative by and with such member or member organization shall be settled by arbitration, at the instance of any such party, in accordance with the arbitration procedure prescribed elsewhere in these Rules.

NYSE Rule 347.

Willis responded to Dean Witter's motion and filed a motion for leave to amend her complaint to add a claim under Title VII. The issue of the arbitrability of all claims, including the tendered Title VII claim, was briefed by both parties and a hearing was held on December 21, 1990. On the same day the court entered its memorandum and order granting Willis leave to amend her complaint, granting Dean Witter's motion to compel arbitration on Willis' contract claims, and denying the motion to compel arbitration of Willis' claims under Title VII and Kentucky civil rights provisions. 753 F.Supp. 206. This timely appeal followed.

II.

The sole issue before the court is whether the district court erred in denying Dean Witter's motion to compel arbitration of Willis' civil rights claims based upon the arbitration clause in the securities registration form and relevant New York Stock Exchange Rules. The parties' briefs and the amicus brief submitted by the Equal Employment Opportunity Commission ("EEOC") in support of the plaintiff were all written prior to the Supreme Court's decision in Gilmer v. Interstate/Johnson Lane Corp., --- U.S. ----, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). In Gilmer, the Supreme Court held that the same arbitration clause, contained in the same securities registration form and New York Stock Exchange rule, was enforceable under the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-15 (1988), and that an action brought by a securities dealer for age discrimination under the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. §§ 621-634, was subject to mandatory arbitration. Gilmer, 111 S.Ct. at 1657. As will be elucidated below, we find Gilmer to be dispositive of every argument presented by the plaintiff and the EEOC in this appeal. Cf. Alford v. Dean Witter Reynolds, Inc., 905 F.2d 104 (5th Cir.1990), vacated, --- U.S. ----, 111 S.Ct. 2050, 114 L.Ed.2d 456 (1991) (decision finding Title VII claims non-arbitrable under the FAA vacated and remanded for reconsideration in light of Gilmer ).

Gilmer involved a suit by a former registered securities representative for discrimination under the ADEA. Like Willis, the plaintiff in Gilmer was required to register as a securities representative with several stock exchanges, including the NYSE, as a condition of employment. The plaintiff's registration application, the Uniform Application for Securities Industry Registration or Transfer, provided that the plaintiff, among other things, " 'agree[d] to arbitrate any dispute, claim or controversy' arising between him and [his employer] 'that is required to be arbitrated under the rules, constitutions or by-laws of the organizations with which [he] register[s].' " Gilmer, 111 S.Ct. at 1650 (quoting Securities Registration Form). Under NYSE Rule 347, quoted above, the plaintiff was required to arbitrate any controversy " 'arising out of the employment or termination of employment of such representative.' " Id. at 1651 (quoting Rule 347).

The defendant in Gilmer claimed that the arbitration agreement in the Securities Registration Form and the FAA required that the plaintiff's claim under the ADEA be submitted to arbitration. The district court below denied the defendant's motion for arbitration based upon the Supreme Court's decision in Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974), "and because it concluded that 'Congress intended to protect ADEA claimants from the waiver of a judicial forum.' " Gilmer, 111 S.Ct. at 1651.

The Supreme Court, agreeing with the Fourth Circuit, reversed the district court and held that nothing in the ADEA or its legislative history suggested that the arbitration clause in the Securities Registration Form should not be enforced under the FAA. We find that the Court's analysis and conclusions in Gilmer compels the conclusion that the FAA and arbitration provisions of the Securities Registration Form apply equally to Willis' Title VII claims in the instant case.

A.

Willis and the EEOC first contend that the Supreme Court's decision in Alexander precludes application of the FAA or the arbitration provision of the Securities Registration Form to Title VII claims. In Alexander, the Supreme Court considered whether a union employee was foreclosed from pursuing an action under Title VII after he had been unsuccessful in an arbitration compelled by his collective bargaining agreement. In deciding that the employee was not so precluded, the Court analyzed the purposes and enforcement scheme embodied in Title VII and, finding that "federal courts have been assigned plenary powers to secure compliance with Title VII," held that

[t]here is no suggestion in the statutory scheme that a prior arbitral decision either forecloses an individual's right to sue or divests federal courts of jurisdiction.

415 U.S. at 45, 47, 94 S.Ct. at 1018, 1019. Willis argues that Alexander precludes a finding that employees can waive their right to court adjudication of their Title VII claims by signing an agreement with an arbitration clause contained therein. See Swenson v. Management Recruiters Int'l, Inc., 858 F.2d 1304 (8th Cir.1988), cert denied, 493 U.S. 848, 110 S.Ct. 143, 107 L.Ed.2d 102 (1989) (relying on Alexander to find that Title VII not subject to waiver through arbitration clause); Utley v. Goldman Sachs & Co., 883 F.2d 184 (1st Cir.1989). But see Alford, 905 F.2d at 104 (relying on Alexander to find Title VII not subject to arbitration, but vacated for reconsideration in light of Gilmer ).

Although the Supreme Court does not overrule Alexander in Gilmer, it does reject a reading of Alexander as prohibiting the arbitration of employment discrimination claims. Gilmer, 111 S.Ct. at 1656. Specifically, in response to the arguments based upon Alexander, the Court in Gilmer states:

There are several important distinctions between the [Alexander v.] Gardner-Denver line of cases and the case before us. First, those cases did not involve the issue of the enforceability of an agreement to arbitrate statutory claims. Rather, they involved the quite different issue whether arbitration of contract-based claims precluded subsequent judicial resolution of statutory claims. Since the employees there had not agreed to arbitrate their statutory claims, and the labor arbitrators were not authorized to resolve such claims, the arbitration in those cases understandably was held not to preclude subsequent statutory actions. Second, because the arbitration in those cases occurred in the context of a collective-bargaining agreement, the claimants there were represented by their unions in the arbitration proceedings. An important concern therefore was the tension between collective representation and individual statutory rights, a concern not applicable to ...