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| [1] | SUPREME COURT OF THE UNITED STATES |
| [2] | No. 99-1823 |
| [3] | 2002.SCT.0000015 <http://www.versuslaw.com> |
| [4] | January 15, 2002 |
| [5] | EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, PETITIONER v. WAFFLE HOUSE, INC. |
| [6] | SYLLABUS BY THE COURT |
| [7] | OCTOBER TERM, 2001 |
| [8] | Respondent's employees must each sign an agreement requiring employment
disputes to be settled by binding arbitration. After Eric Baker suffered
a seizure and was fired by respondent, he filed a
timely discrimination charge with the Equal Employment Opportunity Commission
(EEOC) alleging that his discharge violated Title I of the Americans with
Disabilities Act of 1990 (ADA). The EEOC subsequently filed this enforcement
suit, to which Baker is not a party, alleging that respondent's employment
practices, including Baker's discharge "because of his disability,"
violated the ADA and that the violation was intentional and done with malice
or reckless indifference. The complaint requested injunctive relief to "eradicate
the effects of [respondent's] past and present unlawful employment practices";
specific relief designed to make Baker whole, including backpay, reinstatement,
and compensatory damages; and punitive damages for malicious and reckless
conduct. Respondent petitioned under the Federal Arbitration Act (FAA) to
stay the EEOC's suit and compel arbitration, or to dismiss the action, but
the District Court denied relief. The Fourth Circuit concluded that the
arbitration agreement between Baker and respondent did not foreclose the
enforcement action because the EEOC was not a party to the contract, but
had independent statutory authority to bring suit in any federal district
court where venue was proper. Nevertheless, the court held that the EEOC
was limited to injunctive relief and precluded from seeking victim-specific
relief because the FAA policy favoring enforcement of private arbitration
agreements outweighs the EEOC's right to proceed in federal court when it
seeks primarily to vindicate private, rather than public, interests. |
| [9] | Held: An agreement between an employer and an employee to arbitrate employment-related
disputes does not bar the EEOC from pursuing victim-specific judicial relief,
such as backpay, reinstatement, and damages, in an ADA enforcement action.
Pp. 5-18. |
| [10] | (a) The ADA directs the EEOC to exercise the same enforcement powers,
remedies, and procedures that are set forth in Title VII of the Civil Rights
Act of 1964 when enforcing the ADA's prohibitions against employment discrimination
on the basis of disability. Following the 1991 amendments to Title VII,
the EEOC has authority to bring suit to enjoin an employer from engaging
in unlawful employment practices, and to pursue reinstatement, backpay,
and compensatory or punitive damages, in both Title VII and ADA actions.
Thus, these statutes unambiguously authorize the EEOC to obtain the relief
that it seeks here if it can prove its case against respondent. Neither
the statutes nor this Court's cases suggest that the existence of an arbitration
agreement between private parties materially changes the EEOC's statutory
function or the remedies otherwise available. Pp. 5-8. |
| [11] | (b) Despite the FAA policy favoring arbitration agreements, nothing in
the FAA authorizes a court to compel arbitration of any issues, or by any
parties, that are not already covered in the agreement. The FAA does not
mention enforcement by public agencies; it ensures the enforceability of
private agreements to arbitrate, but otherwise does not purport to place
any restriction on a nonparty's choice of a judicial forum. Pp. 8-9. |
| [12] | (c) The Fourth Circuit based its decision on its evaluation of the "competing
policies" implemented by the ADA and the FAA, rather than on any language
in either the statutes or the arbitration agreement between Baker and respondent.
If the EEOC could prosecute its claim only with Baker's consent, or if its
prayer for relief could be dictated by Baker, the lower court's analysis
might be persuasive. But once a charge is filed, the exact opposite is true
under the ADA, which clearly makes the EEOC the master of its own case,
conferring on it the authority to evaluate the strength of the public interest
at stake and to determine whether public resources should be committed to
the recovery of victim-specific relief. Moreover, the Court of Appeals'
attempt to balance policy goals against the arbitration agreement's clear
language is inconsistent with this Court's cases holding that the FAA does
not require parties to arbitrate when they have not agreed to do so. E.g.,
Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford
Junior Univ., 489 U. S. 468, 478. Because the EEOC is not a party to the
contract and has not agreed to arbitrate its claims, the FAA's proarbitration
policy goals do not require the agency to relinquish its statutory authority
to pursue victim-specific relief, regardless of the forum that the employer
and employee have chosen to resolve their disputes. Pp. 9-16. |
| [13] | (d) Although an employee's conduct may effectively limit the relief the
EEOC can obtain in court if, for example, the employee fails to mitigate
damages or accepts a monetary settlement, see, e.g., Ford Motor Co. v. EEOC,
458 U. S. 219, 231-232, Baker has not sought arbitration, nor is there any
indication that he has entered into settlement negotiations with respondent.
The fact that ordinary principles of res judicata, mootness, or mitigation
may apply to EEOC claims does not mean the EEOC's claim is merely derivative.
This Court has recognized several situations in which the EEOC does not
stand in the employee's shoes, see, e.g., Occidental Life Ins. Co. of Cal.
v. EEOC, 432 U. S. 355, 368, and, in this context, the statute specifically
grants the EEOC exclusive authority over the choice of forum and the prayer
for relief once a charge has been filed. Pp. 16-18. |
| [14] | 193 F. 3d 805, reversed and remanded. |
| [15] | Stevens, J., delivered the opinion of the Court, in which O'Connor, Kennedy,
Souter, Ginsburg, and Breyer, JJ., joined. Thomas, J., filed a dissenting
opinion, in which Rehnquist, C. J., and Scalia, J., joined. |
| [16] | The opinion of the court was delivered by: Justice Stevens. |
| [17] | 534 U. S. ____ (2002) |
| [18] | On Writ Of Certiorari To The United States Court Of Appeals For The Fourth
Circuit |
| [19] | The question presented is whether an agreement between an employer and
an employee to arbitrate employment-related disputes bars the Equal Employment
Opportunity Commission (EEOC) from pursuing victim-specific judicial relief,
such as backpay, reinstatement, and damages, in an enforcement action alleging
that the employer has violated Title I of the Americans with Disabilities
Act of 1990 (ADA), 104 Stat. 328, 42 U. S. C. §12101 et seq. (1994 ed. and
Supp. V). |
| [20] | I. |
| [21] | In his application for employment with respondent, Eric Baker agreed that
"any dispute or claim" concerning his employment would be "settled
by binding arbitration."*fn1 As a
condition of employment, all prospective Waffle House employees are required
to sign an application containing a similar mandatory arbitration agreement.
See App. 56. Baker began working as a grill operator at one of respondent's
restaurants on August 10, 1994. Sixteen days later he suffered a seizure
at work and soon thereafter was discharged. Id., at 43-44. Baker did not
initiate arbitration proceedings, nor has he in the seven years since his
termination, but he did file a timely charge of discrimination with the
EEOC alleging that his discharge violated the ADA. |
| [22] | After an investigation and an unsuccessful attempt to conciliate, the
EEOC filed an enforcement action against respondent in the Federal District
Court for the District of South Carolina,*fn2
pursuant to §107(a) of the ADA, 42 U. S. C. §12117(a) (1994 ed.), and §102
of the Civil Rights Act of 1991, as added, 105 Stat. 1072, 42 U. S. C. §1981a
(1994 ed.). Baker is not a party to the case. The EEOC's complaint alleged
that respondent engaged in employment practices that violated the ADA, including
its discharge of Baker "because of his disability," and that its
violation was intentional, and "done with malice or with reckless indifference
to [his] federally protected rights." The complaint requested the court
to grant injunctive relief to "eradicate the effects of [respondent's]
past and present unlawful employment practices," to order specific
relief designed to make Baker whole, including backpay, reinstatement, and
compensatory damages, and to award punitive damages for malicious and reckless
conduct. App. 38-40. |
| [23] | Respondent filed a petition under the Federal Arbitration Act (FAA), 9
U. S. C. §1 et seq., to stay the EEOC's suit and compel arbitration, or
to dismiss the action. Based on a factual determination that Baker's actual
employment contract had not included the arbitration provision, the District
Court denied the motion. The Court of Appeals granted an interlocutory appeal
and held that a valid, enforceable arbitration agreement between Baker and
respondent did exist. 193 F. 3d 805, 808 (CA4 1999). The court then proceeded
to consider "what effect, if any, the binding arbitration agreement
between Baker and Waffle House has on the EEOC, which filed this action
in its own name both in the public interest and on behalf of Baker."
Id., at 809. After reviewing the relevant statutes and the language of the
contract, the court concluded that the agreement did not foreclose the enforcement
action because the EEOC was not a party to the contract, and it has independent
statutory authority to bring suit in any federal district court where venue
is proper. Id., at 809-812. Nevertheless, the court held that the EEOC was
precluded from seeking victim-specific relief in court because the policy
goals expressed in the FAA required giving some effect to Baker's arbitration
agreement. The majority explained: |
| [24] | "When the EEOC seeks `make-whole' relief for a charging party, the
federal policy favoring enforcement of private arbitration agreements outweighs
the EEOC's right to proceed in federal court because in that circumstance,
the EEOC's public interest is minimal, as the EEOC seeks primarily to vindicate
private, rather than public, interests. On the other hand, when the EEOC
is pursuing large-scale injunctive relief, the balance tips in favor of
EEOC enforcement efforts in federal court because the public interest dominates
the EEOC's action." Id., at 812.*fn3 |
| [25] | Therefore, according to the Court of Appeals, when an employee has signed
a mandatory arbitration agreement, the EEOC's remedies in an enforcement
action are limited to injunctive relief. |
| [26] | Several Courts of Appeals have considered this issue and reached conflicting
conclusions. Compare EEOC v. Frank's Nursery & Crafts, Inc., 177 F.
3d 448 (CA6 1999) (employee's agreement to arbitrate does not affect the
EEOC's independent statutory authority to pursue an enforcement action for
injunctive relief, backpay, and damages in federal court), with EEOC v.
Kidder, Peabody & Co., 156 F. 3d 298 (CA2 1998) (allowing the EEOC to
pursue injunctive relief in federal court, but precluding monetary relief);
Merrill, Lynch, Pierce, Fenner and Smith, Inc. v. Nixon, 210 F. 3d 814 (CA8),
cert. denied, 531 U. S. 958 (2000) (same). We granted the EEOC's petition
for certiorari to resolve this conflict, 532 U. S. 941 (2001), and now reverse. |
| [27] | II. |
| [28] | Congress has directed the EEOC to exercise the same enforcement powers,
remedies, and procedures that are set forth in Title VII of the Civil Rights
Act of 1964 when it is enforcing the ADA's prohibitions against employment
discrimination on the basis of disability. 42 U. S. C. §12117(a) (1994 ed.).*fn4
Accordingly, the provisions of Title VII defining the EEOC's authority provide
the starting point for our analysis. |
| [29] | When Title VII was enacted in 1964, it authorized private actions by individual
employees and public actions by the Attorney General in cases involving
a "pattern or practice" of discrimination. 42 U. S. C. §2000e-6(a)
(1994 ed.). The EEOC, however, merely had the authority to investigate and,
if possible, to conciliate charges of discrimination. See General Telephone
Co. of Northwest v. EEOC, 446 U. S. 318, 325 (1980). In 1972, Congress amended
Title VII to authorize the EEOC to bring its own enforcement actions; indeed,
we have observed that the 1972 amendments created a system in which the
EEOC was intended "to bear the primary burden of litigation,"
id., at 326. Those amendments authorize the courts to enjoin employers from
engaging in unlawful employment practices, and to order appropriate affirmative
action, which may include reinstatement, with or without backpay.*fn5
Moreover, the amendments specify the judicial districts in which such actions
may be brought.*fn6 They do not mention
arbitration proceedings. |
| [30] | In 1991, Congress again amended Title VII to allow the recovery of compensatory
and punitive damages by a "complaining party." 42 U. S. C. §1981a(a)(1)
(1994 ed.). The term includes both private plaintiffs and the EEOC, §1981a(d)(1)(A),
and the amendments apply to ADA claims as well, §§1981a(a)(2), (d)(1)(B).
As a complaining party, the EEOC may bring suit to enjoin an employer from
engaging in unlawful employment practices, and to pursue reinstatement,
backpay, and compensatory or punitive damages. Thus, these statutes unambiguously
authorize the EEOC to obtain the relief that it seeks in its complaint if
it can prove its case against respondent. |
| [31] | Prior to the 1991 amendments, we recognized the difference between the
EEOC's enforcement role and an individual employee's private cause of action
in Occidental Life Ins. Co. of Cal. v. EEOC, 432 U. S. 355 (1977), and General
Telephone, supra. Occidental presented the question whether EEOC enforcement
actions are subject to the same statutes of limitations that govern individuals'
claims. After engaging in an unsuccessful conciliation process, the EEOC
filed suit in Federal District Court, on behalf of a female employee, alleging
sex discrimination. The court granted the defendant's motion for summary
judgment on the ground that the EEOC's claim was time barred; the EEOC filed
suit after California's 1-year statute of limitations had run. We reversed
because "under the procedural structure created by the 1972 amendments,
the EEOC does not function simply as a vehicle for conducting litigation
on behalf of private parties," 432 U. S., at 368. To hold otherwise
would have undermined the agency's independent statutory responsibility
to investigate and conciliate claims by subjecting the EEOC to inconsistent
limitations periods. |
| [32] | In General Telephone, the EEOC sought to bring a discrimination claim
on behalf of all female employees at General Telephone's facilities in four
States, without being certified as the class representative under Federal
Rule of Civil Procedure 23. 446 U. S., at 321-322. Relying on the plain
language of Title VII and the legislative intent behind the 1972 amendments,
we held that the EEOC was not required to comply with Rule 23 because it
"need look no further than §706 for its authority to bring suit in
its own name for the purpose, among others, of securing relief for a group
of aggrieved individuals." Id., at 324. In light of the provisions
granting the EEOC exclusive jurisdiction over the claim for 180 days after
the employee files a charge, we concluded that "the EEOC is not merely
a proxy for the victims of discrimination and that [its] enforcement suits
should not be considered representative actions subject to Rule 23."
Id., at 326. |
| [33] | Against the backdrop of our decisions in Occidental and General Telephone,
Congress expanded the remedies available in EEOC enforcement actions in
1991 to include compensatory and punitive damages. There is no language
in the statute or in either of these cases suggesting that the existence
of an arbitration agreement between private parties materially changes the
EEOC's statutory function or the remedies that are otherwise available. |
| [34] | III. |
| [35] | The FAA was enacted in 1925, 43 Stat. 883, and then reenacted and codified
in 1947 as Title 9 of the United States Code. It has not been amended since
the enactment of Title VII in 1964. As we have explained, its "purpose
was to reverse the longstanding judicial hostility to arbitration agreements
that had existed at English common law and had been adopted by American
courts, and to place arbitration agreements on the same footing as other
contracts." Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20,
24 (1991). The FAA broadly provides that a written provision in "a
contract evidencing a transaction involving commerce to settle by arbitration
a controversy thereafter arising out of such contract ... shall be valid,
irrevocable, and enforceable, save upon such grounds as exist at law or
in equity for the revocation of any contract." 9 U. S. C. §2. Employment
contracts, except for those covering workers engaged in transportation,
are covered by the Act. Circuit City Stores, Inc. v. Adams, 532 U. S. 105
(2001). |
| [36] | The FAA provides for stays of proceedings in federal district courts when
an issue in the proceeding is referable to arbitration, and for orders compelling
arbitration when one party has failed or refused to comply with an arbitration
agreement. See 9 U. S. C. §§3 and 4. We have read these provisions to "manifest
a `liberal federal policy favoring arbitration agreements.' " Gilmer,
500 U. S., at 25 (quoting Moses H. Cone Memorial Hospital v. Mercury Constr.
Corp., 460 U. S. 1, 24 (1983)). Absent some ambiguity in the agreement,
however, it is the language of the contract that defines the scope of disputes
subject to arbitration. See Mastrobuono v. Shearson Lehman Hutton, Inc.,
514 U. S. 52, 57 (1995) ("[T]he FAA's proarbitration policy does not
operate without regard to the wishes of the contracting parties").
For nothing in the statute authorizes a court to compel arbitration of any
issues, or by any parties, that are not already covered in the agreement.
The FAA does not mention enforcement by public agencies; it ensures the
enforceability of private agreements to arbitrate, but otherwise does not
purport to place any restriction on a nonparty's choice of a judicial forum. |
| [37] | IV. |
| [38] | The Court of Appeals based its decision on its evaluation of the "competing
policies" implemented by the ADA and the FAA, rather than on any language
in the text of either the statutes or the arbitration agreement between
Baker and respondent. 193 F. 3d, at 812. It recognized that the EEOC never
agreed to arbitrate its statutory claim, id., at 811 ("We must also
recognize that in this case the EEOC is not a party to any arbitration agreement"),
and that the EEOC has "independent statutory authority" to vindicate
the public interest, but opined that permitting the EEOC to prosecute Baker's
claim in court "would significantly trample" the strong federal
policy favoring arbitration because Baker had agreed to submit his claim
to arbitration. Id., at 812. To effectuate this policy, the court distinguished
between injunctive and victim-specific relief, and held that the EEOC is
barred from obtaining the latter because any public interest served when
the EEOC pursues "make whole" relief is outweighed by the policy
goals favoring arbitration. Only when the EEOC seeks broad injunctive relief,
in the Court of Appeals' view, does the public interest overcome the goals
underpinning the FAA.*fn7 |
| [39] | If it were true that the EEOC could prosecute its claim only with Baker's
consent, or if its prayer for relief could be dictated by Baker, the court's
analysis might be persuasive. But once a charge is filed, the exact opposite
is true under the statute -- the EEOC is in command of the process. The
EEOC has exclusive jurisdiction over the claim for 180 days. During that
time, the employee must obtain a right-to-sue letter from the agency before
prosecuting the claim. If, however, the EEOC files suit on its own, the
employee has no independent cause of action, although the employee may intervene
in the EEOC's suit. 42 U. S. C. §2000e-5(f)(1) (1994 ed.). In fact, the
EEOC takes the position that it may pursue a claim on the employee's behalf
even after the employee has disavowed any desire to seek relief. Brief for
Petitioner 20. The statute clearly makes the EEOC the master of its own
case and confers on the agency the authority to evaluate the strength of
the public interest at stake. Absent textual support for a contrary view,
it is the public agency's province -- not that of the court -- to determine
whether public resources should be committed to the recovery of victim-specific
relief. And if the agency makes that determination, the statutory text unambiguously
authorizes it to proceed in a judicial forum. |
| [40] | Respondent and the dissent contend that Title VII supports the Court of
Appeals' bar against victim-specific relief, because the statute limits
the EEOC's recovery to "appropriate" relief as determined by a
court. See Brief for Respondent 19, and n. 8; post, at 4-6 (Thomas, J.,
dissenting). They rely on §706(g)(1), which provides that, after a finding
of liability, "the court may enjoin the respondent from engaging in
such unlawful employment practice, and order such affirmative action as
may be appropriate, which may include, but is not limited to, reinstatement
or hiring of employees, with or without back pay ... or any other equitable
relief as the court deems appropriate." 42 U. S. C. §2000e-5(g)(1)
(1994 ed.) (emphasis added). They claim this provision limits the remedies
available and directs courts, not the EEOC, to determine what relief is
appropriate. |
| [41] | The proposed reading is flawed for two reasons. First, under the plain
language of the statute the term "appropriate" refers to only
a subcategory of claims for equitable relief, not damages. The provision
authorizing compensatory and punitive damages is in a separate section of
the statute, §1981a(a)(1), and is not limited by this language. The dissent
responds by pointing to the phrase "may recover" in §1981a(a)(1),
and arguing that this too provides authority for prohibiting victim-specific
relief. See post, at 6, n. 7. But this contention only highlights the second
error in the proposed reading. If "appropriate" and "may
recover" can be read to support respondent's position, then any discretionary
language would constitute authorization for judge-made, per se rules. This
is not the natural reading of the text. These terms obviously refer to the
trial judge's discretion in a particular case to order reinstatement and
award damages in an amount warranted by the facts of that case. They do
not permit a court to announce a categorical rule precluding an expressly
authorized form of relief as inappropriate in all cases in which the employee
has signed an arbitration agreement.*fn8 |
| [42] | The Court of Appeals wisely did not adopt respondent's reading of §706(g).
Instead, it simply sought to balance the policy goals of the FAA against
the clear language of Title VII and the agreement. While this may be a more
coherent approach, it is inconsistent with our recent arbitration cases.
The FAA directs courts to place arbitration agreements on equal footing
with other contracts, but it "does not require parties to arbitrate
when they have not agreed to do so." Volt Information Sciences, Inc.
v. Board of Trustees of Leland Stanford Junior Univ., 489 U. S. 468, 478
(1989).*fn9 See also Prima Paint Corp.
v. Flood & Conklin Mfg. Co., 388 U. S. 395, 404, n. 12 (1967) ("[T]he
purpose of Congress in 1925 was to make arbitration agreements as enforceable
as other contracts, but not more so"). Because the FAA is "at
bottom a policy guaranteeing the enforcement of private contractual arrangements,"
Mitsubishi Motors Corp. v. Soler Chrysler&nbhyph;Plymouth, Inc., 473
U. S. 614, 625 (1985), we look first to whether the parties agreed to arbitrate
a dispute, not to general policy goals, to determine the scope of the agreement.
Id., at 626. While ambiguities in the language of the agreement should be
resolved in favor of arbitration, Volt, 489 U. S., at 476, we do not override
the clear intent of the parties, or reach a result inconsistent with the
plain text of the contract, simply because the policy favoring arbitration
is implicated. "Arbitration under the [FAA] is a matter of consent,
not coercion." Id., at 479. Here there is no ambiguity. No one asserts
that the EEOC is a party to the contract, or that it agreed to arbitrate
its claims. It goes without saying that a contract cannot bind a nonparty.
Accordingly, the proarbitration policy goals of the FAA do not require the
agency to relinquish its statutory authority if it has not agreed to do
so. |
| [43] | Even if the policy goals underlying the FAA did necessitate some limit
on the EEOC's statutory authority, the line drawn by the Court of Appeals
between injunctive and victim-specific relief creates an uncomfortable fit
with its avowed purpose of preserving the EEOC's public function while favoring
arbitration. For that purpose, the category of victim-specific relief is
both overinclusive and underinclusive. For example, it is overinclusive
because while punitive damages benefit the individual employee, they also
serve an obvious public function in deterring future violations. See Newport
v. Fact Concerts, Inc., 453 U. S. 247, 266-270 (1981) ("Punitive damages
by definition are not intended to compensate the injured party, but rather
to punish the tortfeasor . . . , and to deter him and others from similar
extreme conduct"); Restatement (Second) of Torts §908 (1977). Punitive
damages may often have a greater impact on the behavior of other employers
than the threat of an injunction, yet the EEOC is precluded from seeking
this form of relief under the Court of Appeals' compromise scheme. And,
it is underinclusive because injunctive relief, although seemingly not "victim-specific,"
can be seen as more closely tied to the employees' injury than to any public
interest. See Occidental, 432 U. S., at 383 (Rehnquist, J., dissenting)
("While injunctive relief may appear more `broad based,' it nonetheless
is redress for individuals"). |
| [44] | The compromise solution reached by the Court of Appeals turns what is
effectively a forum selection clause into a waiver of a nonparty's statutory
remedies. But if the federal policy favoring arbitration trumps the plain
language of Title VII and the contract, the EEOC should be barred from pursuing
any claim outside the arbitral forum. If not, then the statutory language
is clear; the EEOC has the authority to pursue victim-specific relief regardless
of the forum that the employer and employee have chosen to resolve their
disputes.*fn10 Rather than attempt to
split the difference, we are persuaded that, pursuant to Title VII and the
ADA, whenever the EEOC chooses from among the many charges filed each year
to bring an enforcement action in a particular case, the agency may be seeking
to vindicate a public interest, not simply provide make-whole relief for
the employee, even when it pursues entirely victim-specific relief. To hold
otherwise would undermine the detailed enforcement scheme created by Congress
simply to give greater effect to an agreement between private parties that
does not even contemplate the EEOC's statutory function.*fn11 |
| [45] | V. |
| [46] | It is true, as respondent and its amici have argued, that Baker's conduct
may have the effect of limiting the relief that the EEOC may obtain in court.
If, for example, he had failed to mitigate his damages, or had accepted
a monetary settlement, any recovery by the EEOC would be limited accordingly.
See, e.g., Ford Motor Co. v. EEOC, 458 U. S. 219, 231-232 (1982) (Title
VII claimant "forfeits his right to backpay if he refuses a job substantially
equivalent to the one he was denied"); EEOC v. Goodyear Aerospace Corp.,
813 F. 2d 1539, 1542 (CA9 1987) (employee's settlement "rendered her
personal claims moot"); EEOC v. U. S. Steel Corp., 921 F. 2d 489, 495
(CA3 1990) (individuals who litigated their own claims were precluded by
res judicata from obtaining individual relief in a subsequent EEOC action
based on the same claims). As we have noted, it "goes without saying
that the courts can and should preclude double recovery by an individual."
General Telephone, 446 U. S., at 333. |
| [47] | But no question concerning the validity of his claim or the character
of the relief that could be appropriately awarded in either a judicial or
an arbitral forum is presented by this record. Baker has not sought arbitration
of his claim, nor is there any indication that he has entered into settlement
negotiations with respondent. It is an open question whether a settlement
or arbitration judgment would affect the validity of the EEOC's claim or
the character of relief the EEOC may seek. The only issue before this Court
is whether the fact that Baker has signed a mandatory arbitration agreement
limits the remedies available to the EEOC. The text of the relevant statutes
provides a clear answer to that question. They do not authorize the courts
to balance the competing policies of the ADA and the FAA or to second-guess
the agency's judgment concerning which of the remedies authorized by law
that it shall seek in any given case. |
| [48] | Moreover, it simply does not follow from the cases holding that the employee's
conduct may affect the EEOC's recovery that the EEOC's claim is merely derivative.
We have recognized several situations in which the EEOC does not stand in
the employee's shoes. See Occidental, 432 U. S., at 368 (EEOC does not have
to comply with state statutes of limitations); General Telephone, 446 U.
S., at 326 (EEOC does not have to satisfy Rule 23 requirements); Gilmer,
500 U. S., at 32 (EEOC is not precluded from seeking classwide and equitable
relief in court on behalf of an employee who signed an arbitration agreement).
And, in this context, the statute specifically grants the EEOC exclusive
authority over the choice of forum and the prayer for relief once a charge
has been filed. The fact that ordinary principles of res judicata, mootness,
or mitigation may apply to EEOC claims, does not contradict these decisions,
nor does it render the EEOC a proxy for the employee. |
| [49] | The judgment of the Court of Appeals is reversed, and the case is remanded
for further proceedings consistent with this opinion. |
| [50] | It is so ordered. |
| [51] | Thomas, J., dissenting |
| [52] | Justice Thomas, with whom The Chief Justice and Justice Scalia join, dissenting. |
| [53] | The Court holds today that the Equal Employment Opportunity Commission
(EEOC or Commission) may obtain victim-specific remedies in court on behalf
of an employee who had agreed to arbitrate discrimination claims against
his employer. This decision conflicts with both the Federal Arbitration
Act (FAA), 9 U. S. C. §1 et seq., and the basic principle that the EEOC
must take a victim of discrimination as it finds him. Absent explicit statutory
authorization to the contrary, I cannot agree that the EEOC may do on behalf
of an employee that which an employee has agreed not to do for himself.
Accordingly, I would affirm the judgment of the Court of Appeals. |
| [54] | I. |
| [55] | Before starting work as a grill operator for respondent Waffle House,
Inc., Eric Scott Baker filled out and signed an employment application.
This application included an arbitration clause providing that "any
dispute or claim concerning Applicant's employment with Waffle House, Inc.,
or any subsidiary or Franchisee of Waffle House, Inc., or the terms, conditions
or benefits of such employment ... will be settled by binding arbitration."
App. 59. |
| [56] | The Court does not dispute that the arbitration agreement between Waffle
House and Baker falls comfortably within the scope of the FAA, see Circuit
City Stores, Inc. v. Adams, 532 U. S. 105 (2001), which provides that "[a]
written provision in ... a contract evidencing a transaction involving commerce
to settle by arbitration a controversy thereafter arising out of such contract
or transaction ... shall be valid, irrevocable, and enforceable." 9
U. S. C. §2. Neither does the Court contest that claims arising under federal
employment discrimination laws, such as Baker's claim that Waffle House
discharged him in violation of the Americans with Disabilities Act of 1990
(ADA), 42 U. S. C. §12101 et seq. (1994 ed. and Supp. V), may be subject
to compulsory arbitration. See Gilmer v. Interstate/Johnson Lane Corp.,
500 U. S. 20, 23 (1991) (holding that a claim arising under the Age Discrimination
in Employment Act of 1967 (ADEA), 29 U. S. C. §621 et seq. (1994 ed.), may
be subject to compulsory arbitration).*fn12
The Court therefore does not dispute that Baker, by signing an arbitration
agreement, waived his ability either to bring an ADA claim against Waffle
House in court or, consequently, to obtain relief for himself in that forum. |
| [57] | The EEOC, in its complaint, sought to obtain the victim-specific relief
for Baker that he could not seek for himself, asking a court to make Baker
whole by providing reinstatement with backpay and compensatory damages and
to pay Baker punitive damages.*fn13
App. 39-40. In its responses to interrogatories and directives to produce
filed the same day as its complaint, the EEOC stated unambiguously: "All
amounts recovered from Defendant Employer in this litigation will be received
directly by Mr. Baker based on his charge of discrimination against Defendant
Employer." Id., at 52. The EEOC also admitted that it was "bring[ing]
this action on behalf of Eric Scott Baker." *fn14
Id., at 51. |
| [58] | By allowing the EEOC to obtain victim-specific remedies for Baker, the
Court therefore concludes that the EEOC may do "on behalf of Baker"
that which he cannot do for himself. The Court's conclusion rests upon the
following premise advanced by the EEOC: An arbitration agreement between
an employer and an employee may not limit the remedies that the Commission
may obtain in court because Title VII "grants the EEOC the right to
obtain all statutory remedies in any action it brings." *fn15
Brief for Petitioner 17. The EEOC contends that "the statute in clear
terms authorizes [it] to obtain all of the listed forms of relief,"
referring to those types of relief set forth in 42 U. S. C. §2000e-5(g)(1)
(1994 ed.) (including injunctive relief and reinstatement with backpay)
as well as the forms of relief listed in §1981a(a)(1) (compensatory and
punitive damages). Brief for Petitioner 17-18. Endorsing the EEOC's position,
the Court concludes that "these statutes unambiguously authorize the
EEOC to obtain the relief it seeks in its complaint if it can prove its
case against respondent." Ante, at 7. |
| [59] | The Court's position, however, is inconsistent with the relevant statutory
provision. For while the EEOC has the statutory right to bring suit, see
§2000e-5(f)(1), it has no statutory entitlement to obtain a particular remedy.
Rather, the plain language of §2000e-5(g)(1) makes clear that it is a court's
role to decide whether "to enjoin the respondent ... , and order such
affirmative action as may be appropriate, which may include, but is not
limited to, reinstatement or hiring of employees, with or without back pay
. . . or any other equitable relief as the court deems appropriate."
(Emphasis added.) Whether a particular remedy is "appropriate"
in any given case is a question for a court and not for the EEOC.*fn16
See Albemarle Paper Co. v. Moody, 422 U. S. 405, 415-416 (1975) ("The
[Title VII] scheme implicitly recognizes that there may be cases calling
for one remedy but not another, and ... these choices are, of course, left
in the first instance to the district courts"); Selgas v. American
Airlines, Inc., 104 F. 3d 9, 13, n. 2 (CA1 1997) ("It is clear that
in a Title VII case, it is the court which has discretion to fashion relief
comprised of the equitable remedies it sees as appropriate, and not the
parties which may determine which equitable remedies are available"). |
| [60] | Had Congress wished to give the EEOC the authority to determine whether
a particular remedy is appropriate under §2000e-5, it clearly knew how to
draft language to that effect. See §2000e-16(b) (providing that the EEOC
shall have the authority to enforce §2000e-16(a)'s prohibition of employment
discrimination within federal agencies "through appropriate remedies,
including reinstatement or hiring of employees with or without back pay,
as will effectuate the policies of this section"). But Congress specifically
declined to grant the EEOC such authority when it empowered the Commission
to bring lawsuits against private employers. Both the original House version
and the original Senate version of the Equal Employment Opportunity Act
of 1972 would have granted the EEOC powers similar to those possessed by
the National Labor Relations Board to adjudicate a complaint and implement
a remedy. See H. R. 1746, 92d Cong., 1st Sess., §706(h) (1971), and S. 2515,
92d Cong., 1st Sess., §4(h) (1971), reprinted in Legislative History of
the Equal Employment Opportunity Act of 1972, pp. 7-8, 164-165. These bills
were amended, however, once they reached the floor of both Houses of Congress
to replace such "cease-and-desist" authority with the power only
to prosecute an action in court. See 117 Cong. Rec. 32088-32111 (1971);
118 Cong. Rec. 3965-3979 (1972). |
| [61] | The statutory scheme enacted by Congress thus entitles neither the EEOC
nor an employee, upon filing a lawsuit, to obtain a particular remedy by
establishing that an employer discriminated in violation of the law.*fn17
In both cases, 42 U. S. C. §2000e-5(g)(1) governs, and that provision unambiguously
requires a court to determine what relief is "appropriate" in
a particular case.*fn18 |
| [62] | II. |
| [63] | Because Congress has not given the EEOC the authority to usurp the traditional
role of courts to determine what constitutes "appropriate" relief
in a given case, it is necessary to examine whether it would be "appropriate"
to allow the EEOC to obtain victim-specific relief for Baker here, notwithstanding
the fact that Baker, by signing an arbitration agreement, has waived his
ability to seek such relief on his own behalf in a judicial forum. For two
reasons, I conclude it is not "appropriate" to allow the EEOC
to do on behalf of Baker that which Baker is precluded from doing for himself. |
| [64] | A. |
| [65] | To begin with, when the EEOC litigates to obtain relief on behalf of a
particular employee, the Commission must take that individual as it finds
him. Whether the EEOC or an employee files a particular lawsuit, the employee
is the ultimate beneficiary of victim-specific relief. The relevance of
the employee's circumstances therefore does not change simply because the
EEOC, rather than the employee himself, is litigating the case, and a court
must consider these circumstances in fashioning an "appropriate"
remedy.*fn19 |
| [66] | As a result, the EEOC's ability to obtain relief is often limited by the
actions of an employee on whose behalf the Commission may wish to bring
a lawsuit. If an employee signs an agreement to waive or settle discrimination
claims against an employer, for example, the EEOC may not recover victim-specific
relief on that employee's behalf. See, e.g., EEOC v. Cosmair, Inc., 821
F. 2d 1085, 1091 (CA5 1987); EEOC v. Goodyear Aerospace Corp., 813 F. 2d
1539, 1543 (CA9 1987); see also EEOC: Guidance on Waivers Under the ADA
and Other Civil Rights Laws, EEOC Compliance Manual (BNA) N:2345, N:2347
(Apr. 10, 1997) (hereinafter EEOC Compliance Manual) (recognizing that a
valid waiver or settlement agreement precludes the EEOC from recovering
victim-specific relief for an employee). In addition, an employee who fails
to mitigate his damages limits his ability to obtain relief, whether he
files his own lawsuit or the EEOC files an action on his behalf. See Ford
Motor Co. v. EEOC, 458 U. S. 219, 231-232 (1982). An employee's unilateral
attempt to pursue his own discrimination claim may also limit the EEOC's
ability to obtain victim-specific relief for that employee. If a court rejects
the merits of a claim in a private lawsuit brought by an employee, for example,
res judicata bars the EEOC from recovering victim-specific relief on behalf
of that employee in a later action. See, e.g., EEOC v. Harris Chernin, Inc.,
10 F. 3d 1286, 1291 (CA7 1993). |
| [67] | In all of the aforementioned situations, the same general principle applies:
To the extent that the EEOC is seeking victim-specific relief in court for
a particular employee, it is able to obtain no more relief for that employee
than the employee could recover for himself by bringing his own lawsuit.
The EEOC, therefore, should not be able to obtain victim-specific relief
for Baker in court through its own lawsuit here when Baker waived his right
to seek relief for himself in a judicial forum by signing an arbitration
agreement. |
| [68] | The Court concludes that the EEOC's claim is not "merely derivative"
of an employee's claim and argues that "[w]e have recognized several
situations in which the EEOC does not stand in the employee's shoes."
See ante, at 18. The Court's opinion, however, attacks a straw man because
this case does not turn on whether the EEOC's "claim" is wholly
derivative of an employee's "claim." Like the Court of Appeals
below, I do not question the EEOC's ability to seek declaratory and broad-based
injunctive relief in a case where a particular employee, such as Baker,
would not be able to pursue such relief in court. Rather, the dispute here
turns on whether the EEOC's ability to obtain victim-specific relief is
dependent upon the victim's ability to obtain such relief for himself. |
| [69] | The Court claims that three cases support its argument that the EEOC's
claim is not "merely derivative" of an employee's claim. See Gilmer
v. Interstate/Johnson Lane Corp., 500 U. S., at 24; General Telephone Co.
of Northwest v. EEOC, 446 U. S. 318, 325 (1980); Occidental Life Ins. Co.
of Cal. v. EEOC, 432 U. S. 355, 368 (1977). Once the actual nature of the
dispute is properly understood, however, it is apparent that these cases
do not support the Court's position, for none of them suggests that the
EEOC should be allowed to recover victim-specific relief on behalf of an
employee who has waived his ability to obtain such relief for himself in
court by signing a valid arbitration agreement. |
| [70] | In Gilmer, for example, this Court addressed whether arbitration procedures
are inadequate in discrimination cases because they do not allow for "broad
equitable relief and class actions." 500 U. S., at 32. Rejecting this
argument, the Court noted that valid arbitration agreements "will not
preclude the EEOC from bringing actions seeking class-wide and equitable
relief." Ibid. Conspicuously absent from the Court's opinion, however,
was any suggestion that the EEOC could obtain victim-specific relief on
behalf of an employee who had signed a valid arbitration agreement. Cf.
ibid. |
| [71] | Similarly, in General Telephone, this Court held only that lawsuits filed
by the EEOC should not be considered representative actions under Federal
Rule of Civil Procedure 23. In reaching this conclusion, the Court noted
that "the EEOC is not merely a proxy for the victims of discrimination."
446 U. S., at 326. To be sure, I agree that to the extent the EEOC seeks
broad-based declaratory and equitable relief in court, the Commission undoubtedly
acts both as a representative of a specific employee and to "vindicate
the public interest in preventing employment discrimination." Ibid.
But neither this dual function, nor anything in General Telephone, detracts
from the proposition that when the EEOC seeks to secure victim-specific
relief in court, it may obtain no more relief for an individual than the
individual could obtain for himself. |
| [72] | Even the EEOC recognizes the dual nature of its role.*fn20
See EEOC Compliance Manual N:2346 (citing General Telephone, supra, at 326).
In its compliance manual, the EEOC states that "every charge filed
with the EEOC carries two potential claims for relief: the charging party's
claim for individual relief, and the EEOC's claim to `vindicate the public
interest in preventing employment discrimination.' " EEOC Compliance
Manual N:2346. It is for this reason that "a private agreement can
eliminate an individual's right to personal recovery, [but] it cannot interfere
with EEOC's right to enforce ... the ADA ... by seeking relief that will
benefit the public and any victims of an employer's unlawful practices who
have not validly waived their claims." Id., at N:2347.*fn21 |
| [73] | In the final case cited by the Court, Occidental Life Ins. Co. v. EEOC,
this Court held that state statutes of limitations do not apply to lawsuits
brought by the EEOC, because "[u]nlike the typical litigant against
whom a statute of limitations might appropriately run, the EEOC is required
by law to refrain from commencing a civil action until it has discharged
its administrative duties." 432 U. S., at 368. The Court also noted
that the 1-year statute of limitations at issue in that case "could
under some circumstances directly conflict with the timetable for administrative
action expressly established in the 1972 Act." Id., at 368-369. Precluding
the EEOC from seeking victim-specific remedies in court on behalf of an
employee who has signed an arbitration agreement, however, would in no way
impede the Commission from discharging its administrative duties nor would
it directly conflict with any provision of the statute. In fact, such a
result is entirely consistent with the federal policy underlying the Court's
decision in Occidental: that employment discrimination claims should be
resolved quickly and out of court. See id., at 368. |
| [74] | B. |
| [75] | Not only would it be "inappropriate" for a court to allow the
EEOC to obtain victim-specific relief on behalf of Baker, to do so in this
case would contravene the "liberal federal policy favoring arbitration
agreements" embodied in the FAA. See Moses H. Cone Memorial Hospital
v. Mercury Constr. Corp., 460 U. S. 1, 24 (1983). |
| [76] | Under the terms of the FAA, Waffle House's arbitration agreement with
Baker is valid and enforceable. See Part I, supra. The Court reasons, however,
that the FAA is not implicated in this case because the EEOC was not a party
to the arbitration agreement and "[i]t goes without saying that a contract
cannot bind a nonparty." Ante, at 14. The Court's analysis entirely
misses the point. The relevant question here is not whether the EEOC should
be bound by Baker's agreement to arbitrate. Rather, it is whether a court
should give effect to the arbitration agreement between Waffle House and
Baker or whether it should instead allow the EEOC to reduce that arbitration
agreement to all but a nullity. I believe that the FAA compels the former
course.*fn22 |
| [77] | By allowing the EEOC to pursue victim-specific relief on behalf of Baker
under these circumstances, the Court eviscerates Baker's arbitration agreement
with Waffle House and liberates Baker from the consequences of his agreement.
Waffle House gains nothing and, if anything, will be worse off in cases
where the EEOC brings an enforcement action should it continue to utilize
arbitration agreements in the future. This is because it will face the prospect
of defending itself in two different forums against two different parties
seeking precisely the same relief. It could face the EEOC in court and the
employee in an arbitral forum. |
| [78] | The Court does not decide here whether an arbitral judgment would "affect
the validity of the EEOC's claim or the character of relief the EEOC may
seek" in court.*fn23 Ante, at 17.
Given the reasoning in the Court's opinion, however, the proverbial handwriting
is on the wall. If the EEOC indeed is "the master of its own case,"
ante, at 11, I do not see how an employee's independent decision to pursue
arbitral proceedings could affect the validity of the "EEOC's claim"
in court. Should this Court in a later case determine that an unfavorable
arbitral judgment against an employee precludes the EEOC from seeking similar
relief for that employee in court, then the Court's jurisprudence will stand
for the following proposition: The EEOC may seek relief for an employee
who has signed an arbitration agreement unless that employee decides that
he would rather abide by his agreement and arbitrate his claim. Reconciling
such a result with the FAA, however, would seem to be an impossible task
and would make a mockery of the rationale underlying the Court's holding
here: that the EEOC is "the master of its own case." Ibid. |
| [79] | Assuming that the Court means what it says, an arbitral judgment will
not preclude the EEOC's claim for victim-specific relief from going forward,
and courts will have to adjust damages awards to avoid double recovery.
See ante, at 17. If an employee, for instance, is able to recover $20,000
through arbitration and a court later concludes in an action brought by
the EEOC that the employee is actually entitled to $100,000 in damages,
one assumes that a court would only award the EEOC an additional $80,000
to give to the employee. Suppose, however, that the situation is reversed:
An arbitrator awards an employee $100,000, but a court later determines
that the employee is only entitled to $20,000 in damages. Will the court
be required to order the employee to return $80,000 to his employer? I seriously
doubt it. |
| [80] | The Court's decision thus places those employers utilizing arbitration
agreements at a serious disadvantage. Their employees will be allowed two
bites at the apple -- one in arbitration and one in litigation conducted
by the EEOC -- and will be able to benefit from the more favorable of the
two rulings. This result, however, discourages the use of arbitration agreements
and is thus completely inconsistent with the policies underlying the FAA. |
| [81] | C. |
| [82] | While the Court explicitly decides today only "whether the fact that
Baker has signed a mandatory arbitration agreement limits the remedies available
to the EEOC," ibid., its opinion sets this Court on a path that has
no logical or principled stopping point. For example, if "[t]he statute
clearly makes the EEOC the master of its own case," ante, at 11, and
the filing of a charge puts the Commission "in command of the process,"
ibid., then it is likely after this decision that an employee's decision
to enter into a settlement agreement with his employer no longer will preclude
the EEOC from obtaining relief for that employee in court. |
| [83] | While the Court suggests that ordinary principles of mootness "may
apply to EEOC claims," ante, at 18, this observation, given the reasoning
in the Court's opinion, seems largely beside the point. It should go without
saying that mootness principles apply to EEOC claims. For instance, if the
EEOC settles claims with an employer, the Commission obviously cannot continue
to pursue those same claims in court. An employee's settlement agreement
with an employer, however, does not "moot" an action brought by
the EEOC nor does it preclude the EEOC from seeking broad-based relief.
Rather, a settlement may only limit the EEOC's ability to obtain victim-specific
relief for the employee signing the settlement agreement. See, e.g., Goodyear
Aerospace Corp., 813 F. 2d, at 1541-1544. |
| [84] | The real question addressed by the Court's decision today is whether an
employee can enter into an agreement with an employer that limits the relief
the EEOC may seek in court on that employee's behalf. And if, in the Court's
view, an employee cannot compromise the EEOC's ability to obtain particular
remedies by signing an arbitration agreement, then I do not see how an employee
may be permitted to do the exact same thing by signing a settlement agreement.
See Scherk v. Alberto-Culver Co., 417 U. S. 506, 511 (1974) (noting that
one purpose of the FAA is to place arbitration agreements "upon the
same footing as other contracts" (citation omitted)). The Court's reasoning,
for example, forecloses the argument that it would be inappropriate under
42 U. S. C. §2000e-5(g)(1) for a court to award victim-specific relief in
any case where an employee had already settled his claim. If the statutory
provision, according to the Court, does not "permit a court to announce
a categorical rule precluding an expressly authorized form of relief as
inappropriate in all cases in which the employee has signed an arbitration
agreement," then it surely does not "constitute authorization
for [a] judge-made, per se rul[e]" barring the EEOC from obtaining
victim-specific remedies on behalf of an employee who has signed a valid
settlement agreement. Ante, at 12-13. |
| [85] | Unfortunately, it is therefore likely that under the logic of the Court's
opinion the EEOC now will be able to seek victim-specific relief in court
on behalf of employees who have already settled their claims. Such a result,
however, would contradict this Court's suggestion in Gilmer that employment
discrimination disputes "can be settled ... without any EEOC involvement."
500 U. S., at 28. More importantly, it would discourage employers from entering
into settlement agreements and thus frustrate Congress' desire to expedite
relief for victims of discrimination, see Ford Motor Co. v. EEOC, 458 U.
S., at 221; Occidental Life, 432 U. S., at 364-365, and to resolve employment
discrimination disputes out of court. See 42 U. S. C. §12212 (encouraging
alternative means of dispute resolution, including settlement negotiations,
to avoid litigation under the ADA). |
| [86] | III. |
| [87] | Rather than allowing the EEOC to undermine a valid and enforceable arbitration
agreement between an employer and an employee in the manner sanctioned by
the Court today, I would choose a different path. As this Court has stated,
courts are "not at liberty to pick and choose among congressional enactments,
and when two statutes are capable of co-existence, it is the duty of the
courts, absent a clearly expressed congressional intention to the contrary,
to regard each as effective." Pittsburgh & Lake Erie R. Co. v.
Railway Labor Executives' Assn., 491 U. S. 490, 510 (1989). In this case,
I think that the EEOC's statutory authority to enforce the ADA can be easily
reconciled with the FAA. |
| [88] | Congress has not indicated that the ADA's enforcement scheme should be
interpreted in a manner that undermines the FAA. Rather, in two separate
places, Congress has specifically encouraged the use of arbitration to resolve
disputes under the ADA. First, in the ADA itself, Congress stated: "Where
appropriate and to the extent authorized by law, the use of alternative
means of dispute resolution, including settlement negotiations, conciliation,
facilitation, mediation, factfinding, minitrials, and arbitration, is encouraged
to resolve disputes arising under this chapter." 42 U. S. C. §12212
(emphasis added). Second, Congress used virtually identical language to
encourage the use of arbitration to resolve disputes under the ADA in the
Civil Rights Act of 1991. See Pub. L. 102-166, §118, 105 Stat. 1081.*fn24 |
| [89] | The EEOC contends that these provisions do not apply to this dispute because
the Commission has not signed an arbitration agreement with Waffle House
and the provisions encourage arbitration "only when the parties have
consented to arbitration." Reply Brief for Petitioner 17. Remarkably,
the EEOC at the same time questions whether it even has the statutory authority
to take this step. See Brief for Petitioner 22, n. 7. As a result, the EEOC's
view seems to be that Congress has encouraged the use of arbitration to
resolve disputes under the ADA only in situations where the EEOC does not
wish to bring an enforcement action in court. This limiting principle, however,
is nowhere to be found in §12212. The use of arbitration to resolve all
disputes under the ADA is clearly "authorized by law." See Part
I, supra. Consequently, I see no indication that Congress intended to grant
the EEOC authority to enforce the ADA in a manner that undermines valid
and enforceable arbitration agreements.*fn25 |
| [90] | In the last 20 years, this Court has expanded the reach and scope of the
FAA, holding, for instance, that the statute applies even to state-law claims
in state court and pre-empts all contrary state statutes. See Allied-Bruce
Terminix Cos. v. Dobson, 513 U. S. 265 (1995); Southland Corp. v. Keating,
465 U. S. 1 (1984). I have not always agreed with this Court's jurisprudence
in this area, see, e.g., Allied-Bruce, supra, at 285-297 (Thomas, J., dissenting),
but it seems to me that what's good for the goose is good for the gander.
The Court should not impose the FAA upon States in the absence of any indication
that Congress intended such a result, see Southland, supra, at 25-30 (O'Connor,
J., dissenting), yet refuse to interpret a federal statute in a manner compatible
with the FAA, especially when Congress has expressly encouraged that claims
under that federal statute be resolved through arbitration. |
| [91] | Given the utter lack of statutory support for the Court's holding, I can
only conclude that its decision today is rooted in some notion that employment
discrimination claims should be treated differently from other claims in
the context of arbitration. I had thought, however, that this Court had
decisively repudiated that principle in Gilmer. See 500 U. S., at 27-28
(holding that arbitration agreements can be enforced without contravening
the "important social policies" furthered by the ADEA). |
| [92] | For all of these reasons, I respectfully dissent. |
|
|
|
| Opinion Footnotes | |
|
|
|
| [93] | *fn1 The agreement states: "The
parties agree that any dispute or claim concerning Applicant's employment
with Waffle House, Inc., or any subsidiary or Franchisee of Waffle House,
Inc., or the terms, conditions or benefits of such employment, including
whether such dispute or claim is arbitrable, will be settled by binding
arbitration. The arbitration proceedings shall be conducted under the Commercial
Arbitration Rules of the American Arbitration Association in effect at the
time a demand for arbitration is made. A decision and award of the arbitrator
made under the said rules shall be exclusive, final and binding on both
parties, their heirs, executors, administrators, successors and assigns.
The costs and expenses of the arbitration shall be borne evenly by the parties."
App. 59. |
| [94] | *fn2 Because no evidence of the employment
practices alleged in the complaint has yet been presented, we of course
express no opinion on the merits of the EEOC's case. We note, on the one
hand, that the state human rights commission also investigated Baker's claim
and found no basis for suit. On the other hand, the EEOC chooses to file
suit in response to only a small number of the many charges received each
year, see n. 7, infra. In keeping with normal appellate practice in cases
arising at the pleading stage, we assume, arguendo, that the EEOC's case
is meritorious. |
| [95] | *fn3 One member of the panel dissented
because he agreed with the District Court that, as a matter of fact, the
arbitration clause was not included in Baker's actual contract of employment.
193 F. 3d, at 813. |
| [96] | *fn4 Section 12117(a) provides: "The
powers, remedies, and procedures set forth in sections 2000e-4, 2000e-5,
2000e-6, 2000e-8, and 2000e-9 of this title shall be the powers, remedies,
and procedures this subchapter provides to the Commission, to the Attorney
General, or to any person alleging discrimination on the basis of disability
in violation of any provision of this chapter, or regulations promulgated
under section 12116 of this title, concerning employment." |
| [97] | *fn5 "(g) Injunctions; appropriate
affirmative action; equitable relief; accrual of back pay; reduction of
back pay; limitations on judicial orders "(1) If the court finds that
the respondent has intentionally engaged in or is intentionally engaging
in an unlawful employment practice charged in the complaint, the court may
enjoin the respondent from engaging in such unlawful employment practice,
and order such affirmative action as may be appropriate, which may include,
but is not limited to, reinstatement or hiring of employees, with or without
back pay (payable by the employer, employment agency, or labor organization,
as the case may be, responsible for the unlawful employment practice), or
any other equitable relief as the court deems appropriate. Back pay liability
shall not accrue from a date more than two years prior to the filing of
a charge with the Commission. Interim earnings or amounts earnable with
reasonable diligence by the person or persons discriminated against shall
operate to reduce the back pay otherwise allowable." 42 U. S. C. §2000e-5(g)(1)
(1994 ed.). |
| [98] | *fn6 Section 2000e-5(f)(3) provides:
"Each United States district court and each United States court of
a place subject to the jurisdiction of the United States shall have jurisdiction
of actions brought under this subchapter. Such an action may be brought
in any judicial district in the State in which the unlawful employment practice
is alleged to have been committed, in the judicial district in which the
employment records relevant to such practice are maintained and administered,
or in the judicial district in which the aggrieved person would have worked
but for the alleged unlawful employment practice, but if the respondent
is not found within any such district, such an action may be brought within
the judicial district in which the respondent has his principal office.
For purposes of sections 1404 and 1406 of title 28, the judicial district
in which the respondent has his principal office shall in all cases be considered
a district in which the action might have been brought." |
| [99] | *fn7 This framework assumes the federal
policy favoring arbitration will be undermined unless the EEOC's remedies
are limited. The court failed to consider, however, that some of the benefits
of arbitration are already built into the EEOC's statutory duties. Unlike
individual employees, the EEOC cannot pursue a claim in court without first
engaging in a conciliation process. 42 U. S. C. §2000e-5(b) (1994 ed.).
Thus, before the EEOC ever filed suit in this case, it attempted to reach
a settlement with respondent. The court also neglected to take into account
that the EEOC files suit in a small fraction of the charges employees file.
For example, in fiscal year 2000, the EEOC received 79,896 charges of employment
discrimination. Although the EEOC found reasonable cause in 8,248 charges,
it only filed 291 lawsuits and intervened in 111 others. Equal Employment
Opportunity Commission, Enforcement Statistics and Litigation (as visited
Nov. 18, 2001), http://www.eeoc.gov/stats/enforcement.html. In contrast,
21,032 employment discrimination lawsuits were filed in 2000. See Administrative
Office, Judicial Business of the United States Courts 2000, Table C-2A (Sept.
30, 2000). These numbers suggest that the EEOC files less than two percent
of all antidiscrimination claims in federal court. Indeed, even among the
cases where it finds reasonable cause, the EEOC files suit in less than
five percent of those cases. Surely permitting the EEOC access to victim-specific
relief in cases where the employee has agreed to binding arbitration, but
has not yet brought a claim in arbitration, will have a negligible effect
on the federal policy favoring arbitration. Justice Thomas notes that our
interpretation of Title VII and the FAA "should not depend on how many
cases the EEOC chooses to prosecute in any particular year." See post,
at 18, n. 14 (dissenting opinion). And yet, the dissent predicts our holding
will "reduce that arbitration agreement to all but a nullity;"
post, at 12, "discourag[e] the use of arbitration agreements;"
post, at 14, and "discourage employers from entering into settlement
agreements," post, at 16. These claims are highly implausible given
the EEOC's litigation practice over the past 20 years. When speculating
about the impact this decision might have on the behavior of employees and
employers, we think it is worth recognizing that the EEOC files suit in
less than one percent of the charges filed each year. |
| [100] | *fn8 Justice Thomas implicitly recognizes
this distinction by qualifying his description of the courts' role as determining
appropriate relief "in any given case," or "in a particular
case." See post, at 4, 6. But the Court of Appeals' holding was not
so limited. 193 F. 3d 805, 812 (CA4 1999) (holding that the EEOC "may
not pursue relief in court ... specific to individuals who have waived their
right to a judicial forum"). |
| [101] | *fn9 In Volt, the parties to a construction
contract agreed to arbitrate all disputes relating to the contract and specified
that California law would apply. When one party sought to compel arbitration,
the other invoked a California statute that authorizes a court to stay arbitration
pending resolution of related litigation with third parties not bound by
the agreement when inconsistent rulings are possible. We concluded that
the FAA did not pre-empt the California statute because "the FAA does
not confer a right to compel arbitration of any dispute at any time; it
confers only the right to obtain an order directing that `arbitration proceed
in the manner provided for in [the parties'] agreement.' " 498 U. S.,
at 474-475 (quoting 9 U. S. C. §4). Similarly, the FAA enables respondent
to compel Baker to arbitrate his claim, but it does not expand the range
of claims subject to arbitration beyond what is provided for in the agreement.
Our decision in Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U. S. 52
(1995), is not inconsistent with this position. In Mastrobuono, we reiterated
that clear contractual language governs our interpretation of arbitration
agreements, but because the choice-of-law provision in that case was ambiguous,
we read the agreement to favor arbitration under the FAA rules. Id., at
62. While we distinguished Volt on the ground that we were reviewing a federal
court's construction of the contract, 514 U. S., at 60, n. 4, regardless
of the standard of review, in this case the Court of Appeals recognized
that the EEOC was not bound by the agreement. When that much is clear, Volt
and Mastrobuono both direct courts to respect the terms of the agreement
without regard to the federal policy favoring arbitration. |
| [102] | *fn10 We have held that federal statutory
claims may be the subject of arbitration agreements that are enforceable
pursuant to the FAA because the agreement only determines the choice of
forum. "In these cases we recognized that `[b]y agreeing to arbitrate
a statutory claim, a party does not forgo the substantive rights afforded
by the statute; it only submits to their resolution in an arbitral, rather
than a judicial, forum.' [Mitsubishi Motors Corp. v. Soler Chrysler&nbhyph;Plymouth,
Inc., 473 U. S. 614, 628 (1985)]." Gilmer v. Interstate/Johnson Lane
Corp., 500 U. S. 20, 26 (1991). To the extent the Court of Appeals construed
an employee's agreement to submit his claims to an arbitral forum as a waiver
of the substantive statutory prerogative of the EEOC to enforce those claims
for whatever relief and in whatever forum the EEOC sees fit, the court obscured
this crucial distinction and ran afoul of our precedent. |
| [103] | *fn11 If injunctive relief were the
only remedy available, an employee who signed an arbitration agreement would
have little incentive to file a charge with the EEOC. As a greater percentage
of the work force becomes subject to arbitration agreements as a condition
of employment, see Voluntary Arbitration in Worker Disputes Endorsed by
2 Groups, Wall St. J., June 20, 1997, p. B2 (reporting that the American
Arbitration Association estimates "more than 3.5 million employees
are covered" by arbitration agreements designating it to administer
arbitration proceedings), the pool of charges from which the EEOC can choose
cases that best vindicate the public interest would likely get smaller and
become distorted. We have generally been reluctant to approve rules that
may jeopardize the EEOC's ability to investigate and select cases from a
broad sample of claims. Cf. EEOC v. Shell Oil Co., 466 U. S. 54, 69 (1984)
("[I]t is crucial that the Commission's ability to investigate charges
of systemic discrimination not be impaired"); Occidental Life Ins.
Co. of Cal. v. EEOC, 432 U. S. 355, 368 (1977). |
| [104] | *fn12 Admittedly, this case involves
a claim under the ADA while Gilmer addressed compulsory arbitration in the
context of the ADEA. Nevertheless, I see no reason why an employee should
not be required to abide by an agreement to arbitrate an ADA claim. In assessing
whether Congress has precluded the enforcement of an arbitration agreement
with respect to a particular statutory claim, this Court has held that a
party should be held to an arbitration agreement "unless Congress itself
has evinced an intention to preclude a waiver of judicial remedies for the
statutory rights at issue." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
Inc., 473 U. S. 614, 628 (1985). Here, the text of the ADA does not suggest
that Congress intended for ADA claims to fall outside the purview of the
FAA. Indeed, the ADA expressly encourages the use of arbitration and other
forms of alternative dispute resolution, rather than litigation, to resolve
claims under the statute: "Where appropriate and to the extent authorized
by law, the use of alternative means of dispute resolution, including settlement
negotiations, conciliation, facilitation, mediation, factfinding, minitrials
and arbitration, is encouraged to resolve disputes arising under this [Act]."
42 U. S. C. §12212 (1994 ed.). |
| [105] | *fn13 The EEOC, in its prayer for
relief, also requested that the court enjoin Waffle House from engaging
in any discriminatory employment practice and asked the court to order Waffle
House to institute policies, practices, and programs which would provide
equal employment opportunities for qualified individuals with disabilities,
and which would eradicate the effect of its past and present unlawful employment
practices. App. 39. The Court of Appeals concluded that Baker's arbitration
agreement did not preclude the EEOC from seeking such broad-based relief,
and Waffle House has not appealed that ruling. See 193 F. 3d 805, 813, n.
3 (CA4 1999). |
| [106] | *fn14 Although the EEOC's complaint
alleged that Waffle House engaged in "unlawful employment practices,"
in violation of §102(a) of the ADA, 42 U. S. C. §12112(a), it mentioned
no instances of discriminatory conduct on the part of Waffle House other
than its discharge of Baker. App. 38 (emphasis added). |
| [107] | *fn15 Title I of the ADA expressly
incorporates "[t]he powers, remedies, and procedures set forth in [Title
VII]." 42 U. S. C. §12117(a). That includes the procedures applicable
to enforcement actions as well as the equitable relief available under §2000e-5(g). |
| [108] | *fn16 The EEOC also points out that
Title VII gives the EEOC, and not an individual victim of discrimination,
the choice of forum when the EEOC files an enforcement action. See §2000e-5(f)(3).
Since the statute gives the victim no say in the matter, the EEOC argues
that an employee, by signing an arbitration agreement, should not be able
to effectively negate ex ante the EEOC's statutory authority to choose the
forum in which it brings suit. Brief for Petitioner 21-23. The Court, wisely,
does not rely heavily on this argument since nothing in the Court of Appeals'
decision prevents the EEOC from choosing to file suit in any appropriate
judicial district set forth in §2000e-5(f)(3). Rather, the Court of Appeals'
holding only limits the remedies that the EEOC may obtain when it decides
to institute a judicial action. See 193 F. 3d, at 806-807. |
| [109] | *fn17 The Court, in fact, implicitly
admits as much. Contradicting its earlier assertion that the "statutes
unambiguously authorize the EEOC to obtain the relief that it seeks in its
complaint if it can prove its case against respondent," ante, at 7
(emphasis added), the Court later concludes that the statutory scheme gives
the trial judge "discretion in a particular case to order reinstatement
and award damages in an amount warranted by the facts of that case."
Ante, at 12. |
| [110] | *fn18 Similarly, the EEOC's authority
to obtain legal remedies is also no greater than that of an employee acting
on his own behalf. Title 42 U. S. C. §1981a(a)(2), which was enacted as
part of the Civil Rights Act of 1991, Pub. L. 102-166, 105 Stat. 1071, provides
that the EEOC or an employee "may recover compensatory and punitive
damages" in addition to the forms of relief authorized by §2000e-5(g)(1).
(Emphasis added.) Nothing in §1981a(a), however, alters the fundamental
proposition that it is for the judiciary to determine what relief (of all
the relief that plaintiffs "may recover" under the statute) the
particular plaintiff before the court is entitled to. The statutory language
does not purport to grant the EEOC or an employee the absolute right to
obtain damages in every case of proven discrimination, despite the operation
of such legal doctrines as time bar, accord and satisfaction, or (as in
this case) binding agreement to arbitrate. |
| [111] | *fn19 I agree with the Court that,
in order to determine whether a particular remedy is "appropriate,"
it is necessary to examine the specific facts of the case at hand. See ante,
at 12. For this reason, the statutory scheme does not permit us to announce
a categorical rule barring lower courts from ever awarding a form of relief
expressly authorized by the statute. When the same set of facts arises in
different cases, however, such cases should be adjudicated in a consistent
manner. Therefore, this Court surely may specify particular circumstances
under which it would be inappropriate for trial courts to award certain
types of relief, such as victim-specific remedies. |
| [112] | *fn20 The EEOC has consistently recognized
that the Commission represents individual employees when it files an action
in court. In this case, for instance, the EEOC stated in its answers to
interrogatories that it brought this action "on behalf of Eric Scott
Baker." See Part I, supra. Moreover, the EEOC has maintained in numerous
cases that its attorneys have an attorney-client relationship with charging
parties and their communications with charging parties are therefore privileged.
See, e.g., EEOC v. Johnson & Higgins, 1998 U. S. Dist. LEXIS 17612,
*1 (SDNY, Nov. 5, 1998); EEOC v. McDonnell Douglas Corp., 948 F. Supp. 54
(ED Mo. 1996). |
| [113] | *fn21 This Court has recognized that
victim-specific remedies also serve the public goals of antidiscrimination
statutes. See, e.g., McKennon v. Nashville Banner Publishing Co., 513 U.
S. 352, 357-358 (1995). Nevertheless, when the EEOC is seeking such remedies,
it is only serving the public interest to the extent that an employee seeking
the same relief for himself through litigation or arbitration would also
be serving the public interest. It is when the EEOC is seeking broader relief
that its unique role in vindicating the public interest comes to the fore.
The Commission's motivation to secure such relief is likely to be greater
than that of an individual employee, who may be primarily concerned with
securing relief only for himself. |
| [114] | *fn22 The Court also reasons that
"the FAA enables respondent to compel Baker to arbitrate his claim,
but it does not expand the range of claims subject to arbitration beyond
what is provided for in the agreement." Ante, at 13, n. 9. The Court
does not explain, however, how the EEOC's ADA claim on Baker's behalf differs
in any meaningful respect from the ADA claim that Baker would have been
compelled to submit to arbitration. |
| [115] | *fn23 In the vast majority of cases,
an individual employee's arbitral proceeding will be resolved before a parallel
court action brought by the EEOC. See Maltby, Private Justice: Employment
Arbitration and Civil Rights, 30 Colum. Human Rights L. Rev. 29, 55 (1998)
(reporting that in arbitration the average employment discrimination case
is resolved in under nine months while the average employment discrimination
case filed in federal district court is not resolved for almost two years). |
| [116] | *fn24 This provision states: "Where
appropriate and to the extent authorized by law, the use of alternative
means of dispute resolution, including settlement negotiations, conciliation,
facilitation, mediation, factfinding, minitrials, and arbitration, is encouraged
to resolve disputes arising under the Acts or provisions of Federal law
amended by this title." Among "the Acts or provisions of Federal
law" amended by the Civil Rights Act of 1991 was the ADA. See Pub.
L. 102-166, §109, 105 Stat. 1071. |
| [117] | *fn25 I do not see the relevance of
the Court's suggestion that its decision will only "have a negligible
effect on the federal policy favoring arbitration" because the EEOC
brings relatively few lawsuits. Ante, at 10, n. 7. In my view, either the
EEOC has been authorized by statute to undermine valid and enforceable arbitration
agreements, such as the one at issue in this case, or one should read the
Commission's enforcement authority and the FAA in a harmonious manner. This
Court's jurisprudence and the proper interpretation of the relevant statutes
should not depend on how many cases the EEOC chooses to prosecute in any
particular year. I simply see no statutory basis for the Court's implication
that the EEOC has the authority to undermine valid and enforceable arbitration
agreements so long as the Commission only opts to interfere with a relatively
limited number of agreements. |
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