Zoller v. GCA Advisors, LLC

• Decision Date: 14 April 2021
• Docket Number: No. 20-15595,20-15595
• Citation: 993 F.3d 1198
• Parties: Shannon ZOLLER, Plaintiff-Appellee, v. GCA ADVISORS, LLC ; Robert Hofeditz; Jonathan Jameson; Reidan Cruz; Daniel Veatch, Defendants-Appellants, and GCA Corporation, Defendant.
• Court: U.S. Court of Appeals — Ninth Circuit

993 F.3d 1198

Shannon ZOLLER, Plaintiff-Appellee,

v.GCA ADVISORS, LLC ; Robert Hofeditz; Jonathan Jameson; Reidan Cruz; Daniel Veatch, Defendants-Appellants,andGCA Corporation, Defendant.

No. 20-15595

United States Court of Appeals, Ninth Circuit.

Argued and Submitted January 12, 2021 San Francisco, California

Filed April 14, 2021

Derek L. Shaffer (argued), Quinn Emanuel Urquhart & Sullivan LLP, Washington, D.C.; Diane Doolittle, Kevin P.B. Johnson, and Brian C. Cannon, Quinn Emanuel Urquhart & Sullivan LLP, Redwood City, California; for Defendants-Appellants.

Michael Rubin (argued), Altshuler Berzon LLP, San Francisco, California; Peter Rukin, Rukin Hyland & Riggin LLP, Oakland, California; Linda D. Friedman and Matthew J. Singer, Stowell & Friedman Ltd., Chicago, Illinois; for Plaintiff-Appellee.

Before: J. Clifford Wallace and Milan D. Smith, Jr., Circuit Judges, and Jane A. Restani,^* Judge.

WALLACE, Circuit Judge:

Shannon Zoller is a former corporate attorney who became an investment banker with GCA Advisors, LLC (GCA) in March 2014. As part of her contract, Zoller signed an agreement that set her compensation and benefits, as well as provided that all disputes arising from her employment would be resolved through binding arbitration. Zoller also signed a second document that specified the arbitration procedures. Zoller committed to "final and binding arbitration" of

[A]ny controversy or claim relating to or arising out of [her] employment with the Company, the termination of [her] employment, the Letter Agreement governing [her] employment with the Company or its enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in connection with the Letter Agreement's provisions.

Zoller also signed a Form U4, as required by FINRA.¹ The form contained an arbitration provision where she agreed to "arbitrate any dispute, claim or controversy that may arise between [her] and [GSA] ... that is required to be arbitrated under the rules, constitutions, or by-laws" of the self-regulatory organizations, including FINRA. Zoller received a FINRA Rule 2263 disclosure specifying that a "claim alleging employment discrimination, including a sexual harassment claim, in violation of a statute is not required to be arbitrated under FINRA rules . Such a claim may be arbitrated at FINRA only if the parties have agreed to arbitrate it , either before or after the dispute arose." FINRA Rule 13201 also states that if the parties agreed to arbitrate statutory employment discrimination claims, "the claim will be administered under Rule 13802." FINRA Rule 13802 also clarifies that it "applies to arbitrations involving a claim of statutory employment discrimination as defined in Rule 13100(bb)."

In July 2016, GCA fired Zoller. Despite the arbitration agreement, Zoller brought an action in federal district court alleging various contract claims, as well as claims of gender discrimination, denial of equal pay, a conspiracy to violate her civil rights, and a failure to prevent that conspiracy. Zoller and GCA filed a joint stipulation to arbitrate some of her claims, but she refused to arbitrate statutory claims. Zoller has contended that the following statutory claims should be considered by the judiciary rather than an arbitrator: (1) Equal Pay Act claim, pursuant to 29 U.S.C. § 206(d)(1), 216(b) ; (2) Fair Pay Act claim, pursuant to Cal. Labor Code § 1197.5 ; (3) Fair Employment and Housing Act claim, pursuant to Cal. Government Code § 12940(a) ; and (4) Civil Rights Act of 1871 claims, pursuant to 42 U.S.C. §§ 1985(3), 1986. GCA moved to compel arbitration. The district court denied GCA's motion to compel because it held that Zoller did not knowingly waive her right to pursue these claims in court. GCA appeals from the district court's denial of its motion to compel arbitration.

We have jurisdiction pursuant to 9 U.S.C. § 16. We review the district court's denial of the motion to compel arbitration de novo. See Davis v. Nordstrom, Inc. , 755 F.3d 1089, 1091 (9th Cir. 2014). The district court's factual findings are reviewed for clear error, unless no facts are in dispute, in which case our entire review is de novo. Id . Determinations of arbitrability are also reviewed de novo. Simula, Inc. v. Autoliv, Inc. , 175 F.3d 716, 719 (9th Cir. 1999) (observing that the "standard for demonstrating arbitrability is not high .... [so that] district courts [must] direct the parties to procceed to arbitration on issues as to which an arbitration agreement has been signed"). We reverse the district court's denial and remand with instructions to send Zoller's statutory claims to arbitration.

I.

The Federal Arbitration Act (the Act) governs arbitration agreements in contracts evincing "a transaction involving commerce." 9 U.S.C. § 2. The Act declares a "liberal federal policy favoring arbitration" and provides that such agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." AT&T Mobility LLC v. Concepcion , 563 U.S. 333, 339, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011) (citation and quotation marks omitted); see also Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. , 473 U.S. 614, 631, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985) (holding that the Act emphatically favors arbitration). Generally, a court must determine two issues before deciding whether to compel arbitration: (1) whether there is an agreement to arbitrate between the parties; and (2) whether the agreement covers the dispute. Howsam v. Dean Witter Reynolds, Inc. , 537 U.S. 79, 84, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002) ; Chiron Corp. v. Ortho Diagnostic Sys., Inc. , 207 F.3d 1126, 1130 (9th Cir. 2000). Zoller bears the burden of proving that her statutory employment discrimination and civil rights claims are not suitable for arbitration. Green Tree Fin. Corp.-Ala. v. Randolph , 531 U.S. 79, 91–92, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000).

Zoller and GCA agree that the arbitration agreement is valid and enforceable as it pertains to Zoller's non-statutory claims. However, Zoller argues that her statutory claims are not within the scope of the agreement, or, in the alternative, that she did not knowingly waive judicial determination of these statutory claims. The knowing waiver doctrine is our judicially created requirement that narrows the Act's scope when other federal statutes explicitly limit the enforcement of arbitration agreements. The standard requires a party to an arbitration agreement to waive knowingly and explicitly their right to judicial determination of their Title VII claims. See Nelson v. Cyprus Bagdad Copper Corp. , 119 F.3d 756, 762 (9th Cir. 1997) ; Renteria v. Prudential Ins. Co. of America , 113 F.3d 1104 (9th Cir. 1997) ; Prudential Ins. Co. of America v. Lai , 42 F.3d 1299 (9th Cir. 1994).

The Supreme Court has held that, while not all statutory claims may be appropriate for arbitration, if a party agreed to arbitration, the party will be held to that agreement unless the party could prove a congressional intent to preclude a waiver of judicial remedies for the statutory rights at issue. Gilmer v. Interstate/Johnson Lane Corp. , 500 U.S. 20, 26, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991) (citations omitted). Zoller, therefore, carries the burden to show such an intention, which would be discoverable in the text of the statutes creating her private right of action, the respective legislative histories, or an "inherent conflict" between arbitration and the statutes’ underlying purposes. Id. (citation and quotation marks omitted). But see E.E.O.C. v. Luce, Forward, Hamilton & Scripps , 345 F.3d 742, 752–53 (9th Cir. 2003) (en banc) (holding that we were precluded from considering the legislative history of section 118 of the Civil Rights Act of 1991 to determine whether compulsory arbitration was precluded because the statute's text is unambiguous). We have been directed to keep in mind the federal policy favoring arbitration throughout the inquiry and to avoid generalized attacks on arbitration. Gilmer , 500 U.S. at 26, 30, 111 S.Ct. 1647.

We extended the Gilmer holding to Title VII claims. Mago v. Shearson Lehman Hutton Inc. , 956 F.2d 932, 935 (9th Cir. 1992). We have interpreted Gilmer to stand for the proposition that "individuals may contractually agree to arbitrate employment disputes and thereby waive the statutory rights to which they would otherwise be entitled." Lai , 42 F.3d at 1303 (citation omitted). We also added our interpretation in Lai . We held that

Congress intended there to be at least a knowing agreement to arbitrate employment disputes before an employee may be deemed to have waived the comprehensive statutory rights, remedies and procedural protections prescribed in Title VII and related state statutes. Such congressional intent , which has been noted in other judicial decisions, is apparent from the text and legislative history of Title VII .

Id . at 1304 (analyzing the Age Discrimination in Employment Act of 1967, as well as Section 118 of the Civil Rights Act of 1991 because it amended several sections of Title VII) (emphasis added); see also § 118 of Pub. L. 102–166, set forth in the notes following 42 U.S.C. § 1981 (Supp.1994) ("Where appropriate and to the extent authorized by law, the use of alternative means of dispute resolutions including, ... arbitration, is encouraged to resolve disputes arising under the Acts or provisions of Federal law amended by this title."); Statement of the President of the United States, Signing Ceremony, Pub. L. No. 102–166 (Nov. 21, 1991), reprinted in 1991 U.S.C.C.A.N. 768, 769; Cong. Rec. S. 15472, S. 15478 (Daily Ed. October 30, 1991, statement of Senator Dole) (declaring that arbitration provisions are valid only "where the parties knowingly and voluntarily elect to use these methods.") (emphasis added).

We reasoned in Lai that these congressional concerns that "Title VII disputes be...