IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT. Case No ARTHUR H. WILLIAMS, Plaintiff-Counter Defendant-Appellant

Transcription

1 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT Case No ARTHUR H. WILLIAMS, Plaintiff-Counter Defendant-Appellant v. CIGNA FINANCIAL ADVISORS INCORPORATED and CIGNA INDIVIDUAL FINANCIAL SERVICES, Defendants-Appellees, and CONNECTICUT GENERAL LIFE INSURANCE COMPANY, Defendant-Counter Claimant-Appellee. On Appeal from the United States District Court for the Northern District of Texas BRIEF OF THE EQUAL EMPLOYMENT ADVISORY COUNCIL AS AMICUS CURIAE IN SUPPORT OF DEFENDANTS-APPELLEES Robert E. Williams* Ann Elizabeth Reesman McGUINESS & WILLIAMS 1015 Fifteenth Street, N.W. Suite 1200 Washington, D.C (202) Attorneys for Amicus Curiae Equal Employment Advisory Council February 2, 1998 * Counsel of Record

2 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT Case No ARTHUR H. WILLIAMS, Plaintiff-Counter Defendant-Appellant v. CIGNA FINANCIAL ADVISORS INCORPORATED and CIGNA INDIVIDUAL FINANCIAL SERVICES, Defendants-Appellees, and CONNECTICUT GENERAL LIFE INSURANCE COMPANY, Defendant-Counter Claimant-Appellee. On Appeal from the United States District Court for the Northern District of Texas CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record certifies that the following listed perons have an interest in the outcome of this case. These representations are made in oder that the judges of this Court may evaluate possible disqualifications or recusal: Arthur H. Williams, Plaintiff-Counter Defendant-Appellant William C. Isbell, Law Ofc. of Wm. C. Isbell, Attorney for Plaintiff (D. Ct., 2nd Appeal) CIGNA Financial Advisors Incorporated, Defendant-Appellee Connecticut General Life Insurance Company, Defendant-Counter Claimant-Appellee R. Rogge Dunn, Mathews, Carlton, Stein, Shields, Pearce, Dunn & Knott, Atty. for Appellees

3 James B. Herman, CIGNA Corporation Attorney for Appellees Anthony Gerard Stergio, Cozen & O Connor, Attorney for Appellees (D. Ct., 1st Appeal, Arb.) James E. Davis, Novakov, Davidson & Flynn, Attorney for Appellees (D. Ct., 1st Appeal) Gabriel Robles, Robles & Associates, Attorneys for Plaintiff (D. Ct., 1st Appeal) Nancy DeLeon, Robles & Associates, Attorneys for Plaintiff (D. Ct., 1st Appeal) Norman Landa, Attorney for Plaintiff (Arb.) Jeffrey Liddle, Liddle & Robinson, Attorney for Plaintiff (Arb.) Marc Susswein, Liddle & Robinson, Attorney for Plaintiff (Arb.) W. Dan Boone, Liddle & Robinson, Attorney for Plaintiff (Arb.) Robert E. Williams Attorney of record for Amicus Curiae Equal Employment Advisory Council ii

4 TABLE OF CONTENTS CERTIFICATE OF INTERESTED PERSONS... i TABLE OF AUTHORITIES... iv INTEREST OF THE AMICUS CURIAE...1 STATEMENT OF THE CASE...5 SUMMARY OF ARGUMENT...7 ARGUMENT...10 I. THE DISTRICT COURT PROPERLY ACCORDED THE ARBITRATORS DECISION IN THIS CASE THE SAME DEGREE OF DEFERENCE AS THE COURTS CUSTOMARILY ACCORD TO ARBITRAL AWARDS ADDRESSING OTHER TYPES OF CLAIMS A. Gilmer Makes Clear That Arbitration of ADEA Claims Is No Different for FAA Purposes Than Arbitration of Other Types of Claims B. The Grounds on Which a Reviewing Court May Vacate an Arbitration Decision Are Narrowly Limited C. Judicial Review of Arbitration Decisions Must Remain Narrowly Limited to Avoid Defeating the Purpose of Arbitration D. The District Court Properly Rejected the Plaintiff s Asserted Grounds for Vacating the Arbitrators Award...15 II. NEITHER LAW NOR SOUND POLICY SUPPORTS IMPOSITION OF A HEIGHTENED STANDARD, NOT AGREED TO BY THE PARTIES, FOR REVIEW OF ARBITRAL AWARDS ADDRESSING STATUTORY DISCRIMINATION CLAIMS CONCLUSION...23 CERTIFICATE OF SERVICE...24 iii

5 TABLE OF AUTHORITIES FEDERAL CASES Antwine v. Prudential Bache Securities, Inc., 899 F.2d 410 (5th Cir. 1990)...3, 6, 8, 13, 15, 16, 17 C.H.I., Inc. v. Marcus Brothers Textile, Inc., 930 F.2d 762 (9th Cir. 1991)...20 Cole v. Burns International Security Services, 105 F.3d 1465 (D.C. Cir. 1997)...18 Gateway Techs., Inc. v. MCI Telecomms. Corp., 64 F.3d 993 (5th Cir. 1995)...9, 20 Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991)...3, 4, 7, 9, 10, 11, 15, 19, 20, 21 Great W. Mortg. Corp. v. Peacock, 110 F.3d 222 (3d Cir.), cert. denied, 118 S. Ct. 299 (1997)...5, 20 Gulf Coast Industrial Workers Union v. Exxon Co., USA, 70 F.3d 847 (5th Cir. 1995)...6, 7, 8, 13 Hirras v. National R.R. Passenger Corp., 10 F.3d 1142 (5th Cir. 1994)...21 LaPine Tech. Corp. v. Kyocera Corp., 130 F.3d 884 (9th Cir. 1997)...20 McIlroy v. PaineWebber Inc., 989 F.2d 817 (5th Cir. 1993)...8, 13 Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bobker, 808 F.2d 930 (2d Cir. 1986)...14, 17 Montes v. Shearson Lehman Brothers, 128 F.3d 1456 (11th Cir. 1997)...14, 18 O.R. Security v. Professional Planning Associates, 857 F.2d 742 (11th Cir. 1988)...17, 18 iv

6 R.M. Perez & Associates, Inc. v. Welch, 960 F.2d 534 (5th Cir. 1992)...13 Rodriguez de Quijas v. Shearson/America Express, Inc., 490 U.S. 477 (1989)...21 United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960)...16 Volt Info. Sciences v. Board of Trustees, 489 U.S. 468 (1989)...14, 15, 19 Williams v. CIGNA Financial Advisors, Inc., 56 F.3d 656 (5th Cir. 1995)...2, 3, 5 DOCKETED CASES Duffield v. Robertson Stephens & Co., No. C EFL, N.D. Cal., appeal pending, No (9th Cir. Sept. 29, 1997)...5 FEDERAL STATUTES Age Discrimination in Employment Act, 29 U.S.C. 621 et seq. (ADEA)...1, 9 Civil Rights Act of 1964 (Title VII), 42 U.S.C. ' 2000e et seq....9 Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq U.S.C. 10(a) U.S.C. 10(a)-(d)...12 Older Workers Benefit Protection Act, 29 U.S.C. 626(f)(1) (OWBPA) U.S.C. 626(b) U.S.C. 626(c)(1)...21 Racketeer Influenced and Corrupt Organizations Act (RICO), v

7 18 U.S.C et seq.;...11 Securities Exchange Act of 1934, 15 U.S.C. 78j(b)...11 Securities Act of 1933, 15 U.S.C. 77l(2)...11 Sherman Act, 15 U.S.C MISCELLANEOUS EEOC: Mandatory Arbitration of Employment Disputes as a Condition of Employment, 8 FEP Manual 405:7511 (BNA 1997)...3 vi

8 The Equal Employment Advisory Council (EEAC) respectfully submits this brief as amicus curiae with the consent of the parties. The brief urges affirmance of the decision below, and thus supports the position of the defendants-appellees, CIGNA Financial Advisors, Inc., and CIGNA Individual Financial Services (CIGNA). INTEREST OF THE AMICUS CURIAE EEAC is an association of employers formed over 20 years ago to promote sound, practical programs to eliminate employment discrimination. It includes more than 300 of this nation s largest private employers. EEAC s directors and officers include many of industry s leading experts in equal employment opportunity. Their combined experience gives EEAC invaluable insight into the practical, as well as legal aspects of fair employment policies and practices. EEAC s members all are employers subject to the Age Discrimination in Employment Act, 29 U.S.C. 621 et seq. (ADEA), as well as other laws and regulations addressing employment discrimination. In addition, many EEAC members are signatories to agreements with individual employees and/or employee representatives that call for arbitration of employment-related disputes. EEAC has an ongoing interest in preserving the enforceability of such agreements, which provide a fair, efficient, and effective means of resolving discrimination claims and other employment-related disputes that otherwise would clog the courts. Because of its interest in this subject, EEAC filed an amicus curiae brief with this Court at an earlier stage of this litigation. That brief urged the Court to overturn the district court s refusal to stay Arthur H. Williams ADEA claim pending enforcement of

9 the arbitration agreement Williams signed when he began working for CIGNA and registered with the National Association of Securities Dealers (NASD). EEAC s brief urged the Court to reject Williams argument that the arbitration agreement should not be enforced because it allegedly did not conform to all the requirements of the Older Workers Benefit Protection Act, 29 U.S.C. 626(f)(1) (OWBPA). 1 WilliamsCafter losing in that proceeding, and then losing in arbitration and failing to convince the district court to overturn the arbitrators decisioncnow returns to this Court, still trying to evade the consequence of his commitment to final, binding arbitration. He now argues that, in reviewing the arbitral award that rejected his claim, the district court should not have applied the customary standard of review spelled out in this Court s decision in Antwine v. Prudential Bache Securities, Inc., 899 F.2d 410, 413 (5th Cir. 1990), but instead should have applied a more stringent standard. Br. of Appellant passim. This time around, Williams has amicus support from the Equal Employment Opportunity Commission (EEOC). The Commission s brief begins by proclaiming EEOC s categorical opposition to any pre-dispute arbitration agreement entered into as a condition of employment. EEOC br. at 9. It takes this stance despite the Supreme Court s enforcement of precisely such an agreement in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991). 2 1 This Court did reject Williams argument in that case, finding it without merit, Williams v. CIGNA Financial Advisors, Inc., 56 F.3d 656, 660 (5th Cir. 1995), and remanded the case for entry of a stay pending arbitration. Id. at EEOC complains that [t]he problem in cases of this nature is that arbitration is being agreed to, not in the context of an existing dispute or claim, but in advance of any claim arising. EEOC br. at 9 (emphasis added). It also complains that Williams was required... as a condition of employment to enter into such an agreement. Id. It is evident from these objections, and from other recent EEOC 2

10 Acknowledging, however, that the law of this case forecloses any further attack on the enforceability of Williams agreement, EEOC devotes the remainder of its brief to supporting Williams current argumentci.e., that the traditional standard for judicial review of arbitration awards is too deferential and not rigorous enough to be suitable for cases involving employment discrimination claims. EEOC br. passim. This case thus presents an issue of great importance to EEAC s members, who seek to preserve the viability of arbitration as an alternative to litigation of employmentrelated disputes. For, as EEAC members know from long experience, one of the primary benefits both employers and employees stand to gain by agreeing to arbitration is the finality arbitral awards derive from the substantial deference courts traditionally accord them. Because of its interest in such issues, EEAC filed an amicus curiae brief with the Supreme Court in Gilmer. EEAC also has filed many other briefs supporting the enforceability of arbitration agreements with respect to discrimination claims. 3 Thus, pronouncements (e.g., EEOC: Mandatory Arbitration of Employment Disputes as a Condition of Employment, 8 FEP Manual 405:7511 (BNA 1997)), that EEOC simply does not accept the teachings of Gilmer or the policies of the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq. Gilmer holds that an agreement to arbitrate all claims arising during an employment relationship, including statutory discrimination claims, is enforceable just as any other contract. Gilmer, 500 U.S. at 33. That holding plainly applies to pre-dispute agreements to arbitrate, for that is precisely the type of agreement Gilmer involved. Moreover, it clearly makes no difference that the agreement to arbitrate was entered into as a condition of employment, for again, that was true of the agreement in Gilmer. Indeed, the Supreme Court expressly noted that Gilmer was required by his employment to sign the securities registration agreement that contained his agreement to arbitrate. Id. at 23. Yet the Court saw that as no reason to deny enforcement of the agreement, absent evidence of coercion or fraud. Id. at 33. Thus, the arguments presented at pp of EEOC s brief in this case (and in the above-cited policy statement) are squarely at odds with Gilmer. They can only be understood as part of an ongoing effort by EEOC to alter or evade, rather than accept and enforce, the law of the land regarding mandatory arbitration agreements entered into as a condition of employment. 3 Most recently, for example, EEAC filed amicus briefs in Great W. Mortg. Corp. v. Peacock, 110 F.3d 222 (3d Cir.), cert denied, 118 S. Ct. 299 (1997), and Duffield v. Robertson Stephens & Co., No. C EFL, N.D. Cal., appeal pending, No (9th Cir. Sept. 29, 1997). 3

11 EEAC has a long-standing interest in, and familiarity with, the issues and policies involved in this case. STATEMENT OF THE CASE The facts essential to this appeal may be summarized briefly as follows: 4 As a condition of employment with CIGNA, Williams signed NASD registration agreements that obliged him to submit any and all disputes arising out of his employment or the termination thereof to binding arbitration. CIGNA later terminated Williams employment. Williams filed an ADEA charge with EEOC and, after receiving a right to sue letter, sued CIGNA in state court, alleging age discrimination and retaliation. CIGNA removed the case to federal court and moved for a stay pending arbitration. The district court denied the motion, but on appeal this Court reversed and remanded for entry of a stay. Williams then submitted his claims to an arbitration panel pursuant to the NASD procedure. Following a hearing, the arbitration panel issued a written decision in which it rejected Williams claims of age discrimination and retaliation under the ADEA. In the same decision, the panel sustained a counterclaim by CIGNA for commissions Williams owed CIGNA against advances. 4 The underlying facts are the same as in Williams v. CIGNA Financial Advisors, Inc., 56 F.3d 656, (5th Cir. 1995). Relevant events since that decision are detailed in the district court s Memorandum Opinion and Order (Mem. Op. & Order) dated August 8,

12 Williams moved the district court to vacate the arbitration panel s award, lift the stay, and reinstate his ADEA suit. The court denied that motion and, instead, granted CIGNA s motion to confirm the arbitration award. In doing so, the district court applied the customary standards for judicial review of arbitration awards, citing this Court s decisions in Antwine, 899 F.2d at 413, and Gulf Coast Industrial Workers Union v. Exxon Co., USA, 70 F.3d 847 (5th Cir. 1995). Taking into account notions of fair play and justice, as well as the desirability of judicial economy, the district court concluded that Williams had not been denied his opportunity for a just adjudication of this dispute when he himself signed the contract indicating his willingness to be bound by arbitration in the event of a dispute. Mem. Op. & Order at 3-4. The district court carefully considered Williams objections to the arbitration proceedings, but found them to be without merit. Id. at 5-6. This appeal followed. SUMMARY OF ARGUMENT The district court properly accorded the arbitration panel s decision the same degree of deference as courts in this Circuit and elsewhere customarily accord other arbitral awards. Gilmer makes clear that claims under the ADEA are just as suitable for final, binding arbitration by mutual agreement as claims under other federal statutes. As examples, the Supreme Court mentioned claims under the Sherman Act, Section 10(b) of the Securities Exchange Act of 1934, the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO), and Section 12(2) of the Securities Act of Gilmer, 500 U.S. at 26. Arbitral awards addressing claims under those 5

13 acts receive deference from the courts, and awards addressing statutory discrimination claims are to be treated no differently. Judicial review of arbitration awards must be kept narrowly confined to avoid defeating the very purpose of arbitrationcthe provision of a relatively quick, efficient and informal means of private dispute settlement.... Antwine v. Prudential Bache Sec., Inc., 899 F.2d 410, 412 (5th Cir. 1990). Thus, this Court has held repeatedly that the only grounds on which a court may vacate an arbitration award are those specified in Section 10 of the FAA. E.g., Gulf Coast Indus. Workers Union v. Exxon Co., USA, 70 F.3d 847, 850 (5th Cir. 1995); McIlroy v. PaineWebber Inc., 989 F.2d 817, 820 (5th Cir. 1993). Section 10 permits vacatur where an award was procured through fraud or corruption, or where the arbitrators were biased, corrupt, guilty of prejudicial misconduct, exceeded their powers, or failed to render a final and definite award. 9 U.S.C. 10(a). None of those grounds is present in this case. Contrary to the arguments of the appellant and his amici, there is no justification in either law or public policy for imposing a heightened standard of review, not agreed to by the parties, when reviewing arbitral awards involving statutory discrimination claims. In urging this Court to adopt a special, more stringent standard for reviewing such claims, the appellant and his amici disregard the central teachings of GilmerCi.e., that employers and employees have the same right under the anti-discrimination laws as under other federal statutes to trade[] the procedures and opportunities for review of the courtroom for the simplicity, informality, and expedition of arbitration (Gilmer, 500 U.S. at 31, quoting Mitsubishi Motors Corp. v. Soler Chrysler- 6

14 Plymouth, Inc., 473 U.S. 614, 628 (1985)), and that when parties voluntarily have agreed to make this trade, courts are bound to honor their choice. If the parties to an arbitration agreement want a heightened standard of judicial review, they can provide for one by mutual agreement, and the courts will apply the standard they specify. See, e.g., Gateway Techs., Inc. v. MCI Telecomms. Corp., 64 F.3d 993, 996 (5th Cir. 1995). Where an arbitration agreement does not include such a special provision, a reviewing court must assume that the parties opted for the efficiency and finality afforded by the usual, deferential standard of review. Courts may not rewrite agreements by imposing standards of review to which the parties never agreed. Ensuring that private agreements to arbitrate are enforced according to their terms not only serves the primary purpose of the FAA; it also furthers important objectives of the federal anti-discrimination laws. The ADEA, like Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq., embodies a strong federal policy favoring voluntary dispute resolution over litigation in the courts. That policy is advanced when employers and employees mutually agree to submit any disputes that may arise out of their relationship to final, binding arbitration, and when courts enforce such agreements according to their terms. 7

15 ARGUMENT I. THE DISTRICT COURT PROPERLY ACCORDED THE ARBITRATORS DECISION IN THIS CASE THE SAME DEGREE OF DEFERENCE AS THE COURTS CUSTOMARILY ACCORD TO ARBITRAL AWARDS ADDRESSING OTHER TYPES OF CLAIMS. A. Gilmer Makes Clear That Arbitration of ADEA Claims Is No Different for FAA Purposes Than Arbitration of Other Types of Claims. In Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991), the Supreme Court held that an arbitration agreement that an individual signed [a]s required by his employment (id. at 23), in which he pledged to submit to arbitration any dispute that might arise out of his employment or the termination thereof, was enforceable under the FAA so as to require him to arbitrate a claim that his employer had violated the ADEA. In so holding, the Court emphasized that the FAA places arbitration agreements on the same footing as other contracts, id. at 24, 33, and makes them enforceable with respect to statutory claims, the same as with respect to other types of claims. Id. at In rejecting Gilmer s contention that ADEA claims should be treated differently for these purposes than other claims, the Court drew comparisons to cases upholding the arbitrability of claims under the Sherman Act, 15 U.S.C. 1-7; Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. 78j(b); the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C et seq.; 5 An exception is made where it is shown that Congress intended to preclude waivers of judicial remedies under a particular statute. Gilmer, 500 U.S. at 26. However, after a careful analysis of the text, history, structure and purpose of the ADEA, the Court found no evidence of intent to preclude waivers of judicial remedies under that statute. Id. at

16 and Section 12(2) of the Securities Act of 1933, 15 U.S.C. 77l(2). See Gilmer, 500 U.S. at 26, 28-29, 31, and cases there cited. The Court emphasized that these other statutes are like the ADEA, in that they are designed to advance public as well as individual rights. Id. at It also pointed out that a federal agency, the Securities and Exchange Commission, is heavily involved in enforcement of the securities laws, much as EEOC is involved in enforcing the discrimination laws. Id. at 29. The Court observed that these statutory features do not preclude arbitration of claims under the other statutes, id. at 28, and it concluded that there was no reason to treat claims under the ADEA any differently. Id. at 35. To place arbitration agreements on the same footing as other contracts, as Gilmer puts it, courts must and do recognize that finality and limited review are part and parcel of what parties bargain for when they enter into arbitration agreements. Thus, as detailed below, courts accord deference to arbitral awards resolving claims under all the federal statutes cited in Gilmer, as well as a whole gamut of other statutory and non-statutory claims. An understanding of Gilmer requires that the same degree of deference be extended to arbitral awards that address statutory discrimination claims. B. The Grounds on Which a Reviewing Court May Vacate an Arbitration Decision Are Narrowly Limited. Section 10 of the Federal Arbitration Act (FAA) spells out a finite list of grounds on which a reviewing court may vacate an arbitration award. They are: (a) Where the award was procured by corruption, fraud, or other undue means. 9

17 (b) Where there was evident partiality or corruption in the arbitrators, or either of them. (c) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced. (d) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made. 9 U.S.C. 10(a)-(d). In this Circuit, it is settled that the grounds listed in Section 10 are the only bases upon which a court may set aside an arbitration award under the FAA. E.g., Gulf Coast Indus. Workers Union v. Exxon Co., USA, 70 F.3d 847, 850 (5th Cir. 1995) ( Under the [FAA], we can only disturb an arbitration award on the grounds set out in that Act. ); McIlroy v. PaineWebber, Inc., 989 F.2d 817, 820 (5th Cir. 1993)( In this circuit, section 10 of the Arbitration Act describes the only grounds upon which a reviewing court may vacate an arbitration award. ); R.M. Perez & Assoc., Inc. v. Welch, 960 F.2d 534, 540 (5th Cir. 1992)(Fifth Circuit precedent binds us to review the plaintiff s challenge [to an arbitration award] solely for errors specified in 10 [of the FAA]. ). Writing for this Court in Perez, Judge Thornberry highlighted the reasons for limiting review to these statutory grounds, as well as the importance of doing so: Because of the speed and informality of arbitration proceedings, whatever indignation a reviewing court may experience in examining the record, it must resist the temptation to condemn imperfect proceedings without a sound statutory basis for doing so. 10

18 960 F.2d at 540, quoting Forsythe Int l, S.A. v. Gibbs Oil Co., 915 F.2d 1017, 1022 (5th Cir. 1990). See also Antwine v. Prudential Bache Sec., Inc., 899 F.2d 410 (5th Cir. 1990). Other circuits, too, recognize that the grounds on which reviewing courts may vacate arbitration decisions are narrowly limited. Thus, although some circuits have augmented the FAA list with grounds of their own formulation, see, e.g., Montes v. Shearson Lehman Bros., 128 F.3d 1456, 1460 (11th Cir. 1997) (listing cases from other circuits treating manifest disregard of law as ground to vacate arbitration decisions), the courts doing so have gone to great lengths to make clear that judicial review, nevertheless, is very limited. Id. See also Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bobker, 808 F.2d 930, (2d Cir. 1986)( Judicial inquiry under the manifest disregard standard is... extremely limited. ). C. Judicial Review of Arbitration Decisions Must Remain Narrowly Limited to Avoid Defeating the Purpose of Arbitration. Preserving the strict limits on judicial review of arbitration awards is essential to the courts principal responsibility under the FAACi.e., to carry out the bargain the parties struck when they agreed to submit their disputes to arbitration rather than litigate them in the courts. See Volt Info. Sciences v. Board of Trustees, 489 U.S. 468, (1989)(Primary duty of courts under FAA is to give effect to the contractual rights and expectations of the parties. ). For, as this Court has recognized, a primary reason why parties enter such agreements is to obtain a relatively quick, efficient and informal means of private dispute settlement. Antwine, 899 F.2d at

19 As the Supreme Court has put it, by agreeing to arbitrate, a party trades the procedures and opportunities for review of the courtroom for the simplicity, informality, and expedition of arbitration. Gilmer, 500 U.S. at 31, quoting Mitsubishi Motors, 473 U.S. at 628. When contracting parties have mutually agreed to make this trade, courts must enforce their agreements like other contracts, in accordance with their terms. Volt Info. Sciences, 489 U.S. at 478. D. The District Court Properly Rejected the Plaintiff s Asserted Grounds for Vacating the Arbitrators Award. In this case, Williams has offered no evidence that the arbitration award was procured through fraud or corruption, that the arbitrators were partial or guilty of misconduct, that they exceeded their powers, or that they failed to make a definite, final award on the matter submitted to them. Instead, he urges vacatur on a variety of grounds that are not recognized in the FAA or the law of this Circuit. For example, Williams complains that the arbitrators refused to allow him sufficient discovery and denied his requests for a continuance. Br. of Appellant at He did not show, however, that these rulings involved any corruption or misconduct within the meaning of FAA Section 10. Nor did he show that he was prejudiced by the rulings. Thus, the district court properly found that the cutoff of discovery and denial of a continuance were within the arbitrators discretion. Mem. Op. & Order at 5. Williams also complains that the arbitrators did not issue written findings and conclusions supporting their decision. Br. at As the district court correctly 12

20 recognized, however, they were not required to do so. Mem. Op. & Order at 4. As this Court has observed: It has long been settled that arbitrators are not required to disclose or explain the reasons underlying an award. United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 598 (1960). The policy behind such a rule is manifest. If arbitrators were required to issue an opinion or otherwise detail the reasons underlying an arbitration award, the very purpose of arbitration--the provision of a relatively quick, efficient and informal means of private dispute resolution--would be markedly undermined. Antwine, 899 F.2d at 412. The objection is unpersuasive, in any event, because even when tried to a jury, ADEA claims do not result in written findings and conclusions. Also lacking merit are Williams complaints that the arbitrators did not have special training and competence in resolving statutory discrimination claims, and that they failed to apply applicable law and precedent properly in this case. Br. of Appellant at The FAA provides for enforcement of awards by arbitrators of the parties own choosing, leaving it to the parties to decide who is qualified. As the district court noted, Williams was aware of the arbitrators qualifications at the outset of the arbitral proceeding, and he raised no timely objection. Mem. Op. & Order at 5. Having taken this wait and see approach (id.), he cannot now be heard to complain that they should have had special qualifications they did not possess. As for Williams contention that the arbitrators misapplied law and precedent, even if that had occurred it would not provide a valid ground for vacating their award. Mere errors of law are not recognized in the FAA or in this Circuit s decisions as grounds for vacatur. Indeed, even under the manifest disregard standard recognized 13

21 in some other courts, it takes far more than mere misapplication of law to justify overturning an arbitral award. As the Eleventh Circuit has observed, The courts which have recognized the manifest disregard of law standard define it as necessarily meaning more than mere error or misunderstanding with respect to law. O.R. Sec. v. Professional Planning Assocs., 857 F.2d 742, 747 (11th Cir. 1988), citing Bobker, 808 F.2d at 933. More recently, the Eleventh Circuit elaborated: An arbitration board that incorrectly interprets the law has not manifestly disregarded it. It has simply made a legal mistake. To manifestly disregard the law, one must be conscious of the law and deliberately ignore it. See O.R. Sec., 857 F.2d at 747 ( there must be some showing in the record, other than the result obtained, that the arbitrators knew the law and expressly disregarded it. ). Montes v. Shearson Lehman Bros., 128 F.3d at There was no such showing in this case. What the record shows, rather, is that Williams got just what he was promised when he entered into his arbitration agreementci.e., a final resolution of a claim arising out of his employment, rendered by an impartial body in accordance with a relatively informal set of procedures, in lieu of the chance to litigate his claim through the courts. 6 To the extent that dicta in Cole v. Burns International Security Services, 105 F.3d 1465 (D.C. Cir. 1997), might suggest that a more rigorous standard of review is required for arbitral awards involving statutory discrimination claims, it represents a minority view that conflicts with the law of this Circuit and, for the reasons set forth herein, should be rejected. 14

22 II. NEITHER LAW NOR SOUND POLICY SUPPORTS IMPOSITION OF A HEIGHTENED STANDARD, NOT AGREED TO BY THE PARTIES, FOR REVIEW OF ARBITRAL AWARDS ADDRESSING STATUTORY DISCRIMINATION CLAIMS. The appellant implicitly, and his amici explicitly, urge this Court to go beyond the FAA and existing law to adopt a more rigorous standard for reviewing arbitral awards addressing claims under the ADEA and other employment discrimination laws. In doing so, they rest their arguments on a jaundiced view of arbitration in the employment context that is severely out of step with Gilmer and other Supreme Court precedents. Appellant s amici, in particular, portray arbitration agreements entered as a condition of employment as somehow less legitimate than other agreements, and therefore less deserving to be enforced like other contracts, in accordance with their terms. Volt Info. Sciences, 489 U.S. at That notion, however, is at odds with Gilmer s central preceptci.e., that agreements to arbitrate disputes, including statutory employment discrimination claims, stand upon the same footing as other contracts, Gilmer, 500 U.S. at 24, even when entered into as a requirement of employment (as Gilmer s agreement was), and even though the parties might have unequal bargaining power. Id. at 33. As the Supreme Court said: Mere inequality in bargaining power... is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context.... [T]he FAA s purpose was to place arbitration agreements on the same footing as other contracts. Thus, arbitration agreements are 7 For example, in describing arbitration agreements entered into as a condition of employment, EEOC places the words agreed to in quotation marks, implying that they are something less than real contractual commitments. EEOC br. at 9. Elsewhere, EEOC refers to arbitration in such situations as imposed (br. at 18), as if individuals did not have free will in deciding whether to accept employment on the terms offered by an employer. In a similar vein, the amicus brief of the American Association of Retired Persons et al. refers to the lack of choice the employee has in resolving his claims through arbitration when arbitration is a condition of employment. AARP br. at

23 enforceable save upon such grounds as exist at law or in equity for the revocation of any contract. Id. See also Great W. Mortg. Corp. v. Peacock, 110 F.3d 222, 229 (3d Cir.), cert. denied, 118 S. Ct. 299 (1997)(rejecting argument that agreement to arbitrate was unenforceable because plaintiff accepted it only as weaker of two parties); C.H.I., Inc. v. Marcus Bros. Textile, Inc., 930 F.2d 762, 763 (9th Cir. 1991) (financial necessity to accept contract requiring arbitration does not create economic duress). In keeping with the principle that courts must enforce arbitration agreements in accordance with their terms, this Court has held that, when the parties have provided for more-rigorous-than-usual standards of review, courts are obliged to apply the standards they have agreed upon. Gateway Techs., Inc. v. MCI Telecomms. Corp., 64 F.3d 993, 996 (5th Cir. 1995). Accord LaPine Tech. Corp. v. Kyocera Corp., 130 F.3d 884 (9th Cir. 1997). A corollary is that, when an arbitration agreement does not call for special standards of review, a court must assume that the parties opted for the usual standards. Thus, unless the parties mutually agreed otherwise when they assented to arbitration, a reviewing court must accord an arbitral award the customary deference, regardless of the type of rights or claims addressed therein. Pervading the arguments of the appellant and his amici is the notion that, without rigorous judicial review, arbitration simply cannot be trusted to produce results that are fair and consistent with the anti-discrimination laws. (E.g., EEOC br. at 10-11). Their arguments reek of the generalized suspicion of arbitration that the Supreme Court has described as far out of step with our current strong endorsement of the federal 16

24 statutes favoring this method of resolving disputes. Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 481 (1989); Gilmer, 500 U.S. at 30. As both the Supreme Court and this Circuit have recognized, out-of-court dispute resolution, such as arbitration, is consistent with the statutory scheme established by Congress [in the ADEA]. Id. at 29; Hirras v. National R.R. Passenger Corp., 10 F.3d 1142, 1146 (5th Cir. 1994). Indeed, the ADEA, like Title VII, embodies strong federal policies favoring voluntary dispute resolution over litigation in the courts, see 29 U.S.C. 626(b), and allowing claimants to select the forum for resolving such disputes. See 29 U.S.C. 626(c)(1). These policies are advanced when courts enforce arbitration agreements in accordance with the terms to which the parties have agreed. These important policies will be eroded if courts undertake to alter arbitration agreements by imposing standards of review to which the parties have not mutually agreed. Based on the experience of many of this nation s largest employers, amicus EEAC can state that one of the principal reasons why employers, employees, and employee representatives enter into arbitration agreements is because they recognize that it is in their mutual interests to adopt procedures that will bring employment-related disputes to final closure more quickly, informally, and inexpensively than would litigation through the courts. An essential ingredient of this efficiency is the finality arbitral awards enjoy as a result of the deference courts traditionally accord them. To take away or diminish this deference, absent the parties mutual agreement, would destroy much of the incentive for employers and employees to agree to such 17

25 voluntary methods of dispute resolution. Thus, to adopt the heightened standard of review that the appellant and his amici advocate would undermine an important policy of the ADEA and other anti-discrimination laws. 18

26 CONCLUSION For the foregoing reasons, EEAC respectfully submits that the decision of the court below should be affirmed. Respectfully submitted, Robert E. Williams* Ann Elizabeth Reesman McGUINESS & WILLIAMS 1015 Fifteenth Street, N.W. Suite 1200 Washington, D.C (202) Attorneys for Amicus Curiae EQUAL EMPLOYMENT ADVISORY COUNCIL February 2, 1998 * Counsel of Record 19

27 CERTIFICATE OF SERVICE I here by certify that two (2) copies of the Brief Amicus Curiae of the Equal Employment Advisory Council were served today on the following counsel by placing said copies in the United States Mail, first class postage prepaid, addressed as follows: William C. Isbell, Esq. Law Office of William C. Isbell 5911 Maple Avenue Dallas, TX R. Rogge Dunn, Esq. Matthews, Carlton, Stein, et al LBJ Freeway, Suite 700 Dallas, TX James B. Herman Two Liberty Place 1601 Chestnut Street, 48th Floor Philadelphia, PA Geoffrey L. Carter, Esq. Equal Employment Opportunity Commission Office of General Counsel 1801 L Street, NW Washington, DC February 2, 1998 Robert E. Williams MCGUINESS & WILLIAMS 1015 Fifteenth Street, NW Suite 1200 Washington, DC Attorney for Amicus Curiae EQUAL EMPLOYMENT ADVISORY COUNCIL 20

28 CERTIFICATE OF COMPLIANCE Pursuant to 5th Cir. R (c), the undersigned certifies this brief complies with the typevolume limitations of 5th Cir. R (b). 1. EXCLUSIVE OF THE EXEMPTED PORTIONS IN 5TH CIR. R (b)(3), THE BRIEF CONTAINS (select one): A. 4,999 words, OR B. lines of text in monospaced typeface. 2. THE BRIEF HAS BEEN PREPARED (select one): A. in proportionally spaced typeface using: Software Name and Version: Microsoft Word 6.0 in (Typeface Name and Font Size): Typeface name and number of characters per inch: Courier IF THE COURT SO REQUESTS, THE UNDERSIGNED WILL PROVIDE AN ELECTRONIC VERSION OF THE BRIEF AND/OR A COPY OF THE WORD OR LINE PRINTOUT. 4. THE UNDERSIGNED UNDERSTANDS A MATERIAL MISREPRESENTATION IN COMPLETING THIS CERTIFICATE, OR CIRCUMVENTION OF THE TYPE- VOLUME LIMITS IN THE 5TH CIR. R , MAY RESULT IN THE COURT S STRIKING THE BRIEF AND IMPOSING SANCTIONS AGAINST THE PERSON SIGNING THE BRIEF. Signature of filing party 21