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Arbitration Law Memo October 2003
by Ross Runkel at LawMemo
9th Circuit approves compulsory Title VII arbitration; overrules Duffield (8-3).
EEOC v. Luce, Forward (9th Cir
en banc 09/30/2003)
http://caselaw.lp.findlaw.com/data2/circs/9th/0057222p.pdf
In Duffield v. Robertson
Stephens & Co, 144 F.3d 1182 (9th Cir 1998), the 9th Circuit held that - as
to Title VII claims - the Civil Rights Act of 1991 precluded enforcement of
arbitration agreements entered into as a condition of employment. All other
federal circuit courts have reached the opposite conclusion. Duffield has now
been overruled, 8-3.
The employer refused to employ
Donald Scott Lagatree because he refused to sign an agreement to arbitrate all
disputes arising from his employment. The EEOC sued the employer claiming
retaliation in violation of Title VII and other statutes. Relying on Duffield,
the trial court enjoined the employer from requiring applicants to agree to
arbitrate Title VII claims and from enforcing existing agreements to arbitrate
such claims. A three-judge panel of the 9th Circuit reversed on the ground that
Circuit City Stores v. Adams, 532 U.S. 105 (2001), implicitly overruled Duffield.
In an en banc rehearing the 9th Circuit has now overruled Duffield on the ground
that it was wrong. The court reversed the trial court's injunction, and also
remanded the case for the trial court to address the EEOC's "novel
theory" of retaliation advanced during oral argument.
Duffield was wrong in concluding
that the Civil Rights Act of 1991 precluded compulsory arbitration. Arbitration
is not inconsistent with the Act's purpose of expanding employee rights and
increasing remedies, and is consistent with the Supreme Court's endorsement of
arbitration and the view that arbitration affects only the choice of forum and
does not affect substantive rights. The text of Section 118 of the 1991 Act does
not present any ambiguity suggesting that it may be intended to preclude
compulsory arbitration. Section 118 encourages the use of arbitration and
contains no prohibitory language. Any contrary legislative history must be
ignored because the text of Section 118 is unambiguous.
The DISSENT argued that
"Congress did not intend that employers could compel employees to sign
compulsory arbitration agreements, coercing employees to arbitrate any future
Title VII claim as a condition of their employment."
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