No. 10-3247 IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ________________________ LARYSSA JOCK, CHRISTY CHADWICK, MARIA HOUSE, DENISE MADDOX, LISA McCONNELL, GLORIA PAGAN, JUDY REED, LINDA RHODES, NINA SHAHMIRZADI, LEIGHLA SMITH, MARIE WOLF, DAWN SOUTO-COONS, and all others similarly situated, Plaintiff-Counter-Defendants - Appellants, JACQUELYN BOYLE, LISA FOLLETT, KHRISTINA RODRIGUEZ, KELLY CONTRERAS, Plaintiff-Counter-Defendants, v. STERLING JEWELERS INC., Defendant-Counter-Claimant - Appellee. ____________________________________________________ On Appeal from the United States District Court for the Southern District of New York ____________________________________________________ CORRECTED BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE IN SUPPORT OF PLAINTIFFS-APPELLANTS AND IN FAVOR OF REVERSAL ____________________________________________________ P. DAVID LOPEZ General Counsel EQUAL EMPLOYMENT OPPORTUNITY COMMISSION VINCENT J. BLACKWOOD Acting Associate General Counsel Office of General Counsel 131 M Street, N.E., 5th Floor BARBARA L. SLOAN Washington, DC 20507 Attorney 202-663-4721 barbara.sloan@eeoc.gov fax: 202-663-7090 TABLE OF CONTENTS TABLE OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii STATEMENT OF INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF THE ISSUE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 STATEMENT OF THE CASE 1. Nature of the Case and Course of Proceedings. . . . . . . . . . . . . . 3 2. Statement of Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3. District Court's Decisions Post-Stolt-Nielsen. . . . . . . . . . . . 10 STANDARD OF REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 ARGUMENT CONSISTENT WITH STOLT-NIELSEN, THE RESOLVE AGREEMENTS CAN BE INTERPRETED TO PERMIT CLASS ARBITRATION. . . . . . . . . . . . . . . . . . . . . . . . 13 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 CERTIFICATE OF COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . 28 ADDENDUM S. Rep. No.92-415, 92d Cong., 1st Sess. (1972), reprinted in Legislative History of the Equal Employment Opportunity Act of 1972 (GPO Nov. 1972) Conference Report, U.S. Senate Labor & Public Welfare, Labor Subcommittee, Legislative History of the Equal Employment Opportunity Act of 1972 (GPO Nov. 1972) CERTIFICATE OF SERVICE TABLE OF AUTHORITIES CASES Page(s) Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974). . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Banco de Seguros del Estado v. Mutual Marine Office, 344 F.3d 255 (2d Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . 13 Century Realty Co. v. Clutter, 62 Ohio St.2d 411, 406 N.E.2d 515 (Ohio 1980). . . . . . . . . . . . . . 19 Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978). . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Cooper v. Federal Reserve Bank, 467 U.S. 867 (1984). . . . . . . . . . . . . . . . . . . . . . . . . . . 24 East Texas Motor Freight System v. Rodriguez, 431 U.S. 395 (1977). . . . . . . . . . . . . . . . . . . . . . . . . . . 18 EEOC v. Associated Dry Goods Corp., 449 U.S. 590 (1981). . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Franks v. Bowman Transportation Co., 424 U.S. 747 (1976). . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991). . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Kristian v. Comcast Corp., 446 F.3d 25 (1st Cir. 2006). . . . . . . . . . . . . . . . . . . . . 23, 25 Mastrobuono v. Shearson Lehman Hutton, 514 U.S. 52 (1995). . . . . . . . . 19-20 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614 (1985). . . 15 Omstead v. Dell, 594 F.3d 1081 (9th Cir. 2010). . . . . . . . . . . . . . . 21 Raytheon Co. v. Automated Business Systems, 882 F.2d 6 (1st Cir. 1989). . . . 19 ReliaStar Life Insurance Co. v. EMC National Life Co., 564 F.3d 81 (2d Cir. 2009). . . . . . . . . . . . . . . . . . . . . . . .13 Robinson v. Metro-North Commuter Railroad, 267 F.3d 147 (2d Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . 24 Stolt-Nielsen v. Animalfeeds International Corp., 130 S. Ct. 1758 (2010). . . . . . . . . . . . . . . . . . passim Teamsters v. United States, 421 U.S. 324 (1977). . . . . . . . . . . . 17, 24-25 United Airlines v. McDonald, 432 U.S. 385 (1977). . . . . . . . . . . . 20-21 Volt Information Sciences v. Trustees of Leland Stanford Jr. Univ., 489 U.S. 468 (1989). . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Westfield Insurance Co. v. Galatis, 100 Ohio St.3d 216, 797 N.E.2d 1256 (Ohio 2003). . . . . . . . . . . . 19 STATUTES and RULES Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. . . . . . . . . . . . . . . . . . . . . passim Federal Rule of Civil Procedure 62.1. . . . . . . . . . . . . . . . . . . .4, 10 OTHER AUTHORITY S. Rep. No.92-415, 92d Cong., 1st Sess. (1972), reprinted in Legislative History of the Equal Employment Opportunity Act of 1972 (GPO Nov. 1972). . . . . . . . . . . 18 Conference Report, U.S. Senate Labor & Public Welfare, Labor Subcommittee, Legislative History of the Equal Employment Opportunity Act of 1972 (GPO Nov. 1972). . . . . . . . . . 17-18 IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT _________________________ No. 10-3247 _________________________ LARYSSA JOCK, CHRISTY CHADWICK, MARIA HOUSE, DENISE MADDOX, LISA McCONNELL, GLORIA PAGAN, JUDY REED, LINDA RHODES, NINA SHAHMIRZADI, LEIGHLA SMITH, MARIE WOLF, DAWN SOUTO-COONS, and all others similarly situated, Plaintiff-Counter-Defendants - Appellants, JACQUELYN BOYLE, LISA FOLLETT, KHRISTINA RODRIGUEZ, KELLY CONTRERAS, Plaintiff-Counter-Defendants, v. STERLING JEWELERS INC., Defendant-Counter-Claimant - Appellee. ____________________________________________________ On Appeal from the United States District Court for the Southern District of New York ____________________________________________________ CORRECTED BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE IN SUPPORT OF PLAINTIFFS-APPELLANTS AND IN FAVOR OF REVERSAL ____________________________________________________ STATEMENT OF INTEREST The Equal Employment Opportunity Commission is the agency charged by Congress with interpreting and enforcing Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. ("Title VII"), and other federal employment discrimination laws. This is an appeal from a district court decision vacating an arbitrator's award construing mandatory arbitration agreements to permit class arbitration of employment discrimination claims. The district court ruled that the Supreme Court's recent decision in Stolt-Nielsen v. Animalfeeds International Corp., 130 S. Ct. 1758 (2010), precludes a finding that the arbitration agreements at issue permit class arbitration. Private class actions play a vital role in the enforcement of Title VII and other federal statutes prohibiting employment discrimination. As the Supreme Court has noted, private suits are an "essential means" of enforcing Title VII. Alexander v. Gardner-Denver Co., 415 U.S. 36, 45 (1974) (citations omitted). Indeed, Congress "considered the charging party a 'private attorney general,' whose role in enforcing the ban on discrimination is parallel to that of the Commission itself." EEOC v. Associated Dry Goods Corp., 449 U.S. 590, 602-03 & n.21 (1981) (citing inter alia Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978)). Class actions play an especially important role in Title VII enforcement since, through such actions, employees can challenge wide-spread employment discrimination affecting an entire class of employees, rather than simply specific acts involving one or a few individuals. That the Commission also has enforcement authority under Title VII does not diminish the importance of private class actions. Given its limited resources, the Commission neither would nor could bring every Title VII suit challenging unlawful acts of employment discrimination. If the district court's interpretation of Stolt-Nielsen were allowed to stand, however, individual employees could lose their right to pursue class actions whenever their employer mandates that they agree to arbitrate employment discrimination claims. Because this ruling could have a serious adverse effect on the enforcement of federal employment discrimination laws, we offer our views to the Court. STATEMENT OF THE ISSUE<1> Whether, consistent with Stolt-Nielsen v. Animalfeeds International Corp., 130 S. Ct. 1758 (2010), the arbitration agreements that defendant required its employees to sign as a condition of employment can reasonably be read to permit class arbitrations. STATEMENT OF THE CASE 1. Nature of the Case and Course of Proceedings This is an appeal from an order vacating an arbitrator's ruling that arbitration agreements, signed by plaintiffs as a condition of employment, "cannot be construed to prohibit class arbitration." Joint Appendix ("JA") 0704. In March 2008, plaintiffs, female current and former employees of defendant, brought suit alleging a company-wide pattern of sex discrimination in pay and promotion in violation of Title VII and the Equal Pay Act.<2> District court docket number ("R.")1; see also R.11 (First Amended Complaint). Shortly thereafter, they moved to refer the case to arbitration pursuant to RESOLVE, defendant's mandatory alternative dispute resolution program. R.25. Over defendant's objections, the district court granted plaintiffs' motion (R.52) and refused to certify the order for interlocutory appeal. R.56. The parties proceeded to arbitration. In June 2009, the arbitrator, responding to a question from the parties, issued a "clause construction award," holding that the agreements could "not be construed to prohibit class arbitration." JA0704; see also JA0731 (clarifying award). The district court denied defendant's motion to vacate the award (R.64; see also R.66 (reaffirming order)), and defendant appealed. R.68. While the appeal was pending, the district court ordered briefing on the effect of the Supreme Court's decision in Stolt-Nielsen v. Animalfeeds International Corp., 130 S. Ct. 1758 (2010). R.71. On July 27, 2010, the court issued an "indicative order" under Federal Rule of Civil Procedure 62.1, stating that, if jurisdiction were restored, it would vacate the clause construction award as "plainly incompatible with the Supreme Court's subsequent pronouncements" in Stolt-Nielsen. Special Appendix ("SA") 19 (7/27/2010 Memorandum Order ("Order") at 8). Following a limited remand from the Second Circuit, in August 2010, the district court entered an order vacating the arbitral award (R.87), and plaintiffs appealed. R.88. 2. Statement of Facts In 1998, Sterling Jewelers, a nationwide chain of retail jewelry stores, implemented a mandatory alternative dispute resolution program called the "RESOLVE Program." SA13 (Order at 2). Since that time, Sterling employees have been required to agree, as a condition of employment, to use the RESOLVE Program to resolve "any dispute, claim or controversy . . . regarding any alleged unlawful act regarding [their] employment or the termination [thereof] which could otherwise have been brought" in court or an administrative agency. See, e.g., JA0240 (Lisa McConnell's Agreement). Claims under Title VII and the Equal Pay Act are expressly covered by the program. Id. In addition, while the agreements permit employees to file charges and cooperate with the enforcement efforts of government agencies such as the EEOC, employees are required to waive their right to obtain any remedy or "legal or equitable relief (e.g., monetary, injunctive, or reinstatement)" from a government agency or court. Id. The agreements provide, however, that the arbitrator will have the authority to "award any types of legal or equitable relief that would be available in a court of competent jurisdiction," so employees "may seek and be awarded equal remedy" in arbitration through the RESOLVE Program. Id. RESOLVE is a three-step program. JA0246 (program brochure). First, the employee files a written complaint with Sterling, detailing her claim and any evidentiary support. JA0250-51. If dissatisfied with Sterling's resolution of the complaint, the employee may appeal to a Sterling-selected mediator or panel of employees, whichever Sterling chooses. JA0251. If dissatisfied with that result, the employee may for a fee proceed to arbitration conducted under AAA Rules as amended by RESOLVE Program rules. JA0252. The agreements must be interpreted under Ohio law (see, e.g., JA0241), but the Program specifies that arbitration will take place at a convenient time and place near the employee's workplace (JA0252); local law will apply to the dispute (id.); and the arbitrator must be licensed in that state. JA0634. The agreements do not mention class claims or class arbitration. In its pleadings before the arbitrator, Sterling asserted that it had considered adding an explicit class-action waiver provision - as it has in some of its retail contracts - but elected not to do so out of concern that the waivers might be found unenforceable in some jurisdictions. JA0680 (Defendant's Clause Construction Reply brief at 7). In March 2008, Laryssa Jock and a number of other women around the country filed suit against Sterling in the Southern District of New York, alleging that the company subjects female current and former employees to a pattern or practice of pay and promotion discrimination in violation of Title VII and the EPA. R.1. Shortly thereafter, the district court granted plaintiffs' motion to stay the suit and refer the case to arbitration. R.52. The parties then settled on an arbitrator, conducted some discovery, and presented extensive briefing and argument on whether the case could be arbitrated on a class-wide basis under the RESOLVE agreements. In June 2009, the arbitrator issued a "clause construction award." JA0699- 0705. After describing the RESOLVE Program, the arbitrator noted that nothing in the Program "expressly prohibits the pursuit of class claims." JA0703. She also noted that Ohio law, which governs the agreements, requires that contracts "be interpreted so as to carry out the intent of the parties, as that intent is evidenced by the contractual language," and the "law will not insert by construction for the benefit of one of the parties an exception or condition which the parties either by design or neglect have omitted from their own contract." JA0702-03. Applying those principles, the arbitrator noted "that the very concept of intent is problematic in the context of a contract of adhesion." JA0704. Because the agreements were "drafted by Sterling" and were "not the product of negotiation," she reasoned, "it was incumbent on Sterling to ensure that all material terms, especially those adverse to the employee, were clearly expressed." Id. Moreover, the arbitrator noted, "Sterling acknowledges . . . that it had deliberately not revised the [agreements] to include an express prohibition, despite numerous arbitral decisions that class claims are permitted in the absence of a waiver of an express prohibition." Id. Under these circumstances, the arbitrator concluded that "construing the [agreements] to contain a waiver of a significant procedural right would impermissibly insert a term for the benefit of one of the parties that it has chosen to omit from its own contract." Accordingly, she determined, the RESOLVE agreements "cannot be construed to prohibit class arbitration." Id. In response to Sterling's request for clarification, the arbitrator added that (1) the agreements "do not require that class claims be resolved separately within each local venue"; (2) the agreements "do not require that every claimant complete [all steps in the RESOLVE process] prior to participating in a class arbitration"; and "[d]etermination as to whether a class should be certified, and the scope of the class, will be made after the parties have had an opportunity to develop the record and brief [those issues]." JA0731. Sterling then moved to vacate the award and stay arbitration proceedings pending a decision in Stolt-Nielsen v. Animalfeeds International Corp., No. 08- 1198 (S. Ct.) (cert. granted June 15, 2009), a maritime anti-trust case presenting the question of whether a party to an arbitration agreement could be compelled to arbitrate a class claim where the agreement is silent and the parties stipulated that they had reached no agreement on the issue. R.57. The district court denied the motion, but explained that its review was "narrow": it could reverse only if the award "exceeded the arbitrator's powers" or was in "manifest disregard of the law." R.66; see JA0777-78 (December Order at 5-6). Defendant appealed to this Court. In April 2010, while the appeal was pending, the Supreme Court issued its decision in Stolt-Nielsen, 130 S. Ct. at 1766, holding that the arbitral panel there exceeded its authority in holding that the applicable arbitration clause, which was silent on the issue, allowed for class arbitration. The Court stated that "a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so." Id. at 1775 (original emphasis). Moreover, the Court stressed, the arbitrator's task is "not to make public policy" but "to interpret and enforce a contract." Id. at 1767; see also id. at 1768-69 & n.6 (suggesting that panel could consider industry custom and usage, FAA, or governing law). The parties in Stolt-Nielsen, however, left "no room for an inquiry" as to their intent by stipulating that they had reached no agreement regarding class arbitration. Id. at 1770. The panel's contrary ruling was improperly based on "its own view of sound policy" on the issue. Id. at 1768. Sterling then sought relief from the district court's earlier order. Although it lacked jurisdiction to reconsider the ruling while Sterling's appeal was pending, the court issued an "indicative ruling" under Federal Rule of Civil Procedure 62.1 stating that it would vacate the clause construction award if jurisdiction were restored. R.85 (7/27/2010 Memorandum Order). 3. The District Court's Decisions Post-Stolt-Nielsen In its "indicative ruling," the district court concluded that Stolt-Nielsen was controlling. Although it had previously upheld the clause construction award, the court explained that it had reconsidered in light of Stolt-Nielsen and would now vacate the award. SA12-13 (Order at 1-2). According to the court, Stolt-Nielsen is "founded on the 'basic precept' that arbitration 'is a matter of consent, not coercion,'" and the arbitrator "'must give effect to the intent of the parties with respect to their agreement to arbitrate, including their specification of with whom they choose to arbitrate their disputes." SA16-17 (Order at 5-6) (citations omitted) (emphasis in Stolt Nielsen and district court). The court noted that the parties in Stolt-Nielsen had "stipulated that they had reached 'no agreement' on the issue of class arbitration," but the arbitral panel had nevertheless "impermissibly required . . . the party seeking to avoid class arbitration to 'establish that the parties . . . intended to preclude class arbitration.'" SA17 (Order at 6) (citing Stolt-Nielsen, 130 S. Ct. at 1775) (emphasis in Stolt-Nielsen and district court). The court also quoted several passages from the decision, including a statement that an "implicit agreement to authorize class-action arbitration . . . is not a term that the arbitrator may infer solely from the fact of the parties' agreement to arbitrate" and a statement rejecting the "panel's presumption that the 'parties' mere silence on the issue of class-action arbitration constitutes consent to resolve their disputes in class proceedings.'" SA17-18 (Order at 6-7) (citing Stolt-Nielsen, 130 S. Ct. at 1775- 76). Turning to the award in this case, the court concluded that the "arbitrator's construction of the RESOLVE agreements as permitting class arbitration was in excess of her powers and therefore cannot be upheld." SA18-19 (Order at 7-8). The court stated that the award "did not by its terms rest upon a finding that the parties manifested any affirmative intention to permit class arbitration." SA19 (Order at 8). Instead, according to the court, the arbitrator "started from the premise that an arbitration clause silent on class arbitration may be construed to permit such arbitration, devoted her analysis to determining whether there was any indication that the parties intended to preclude class arbitration, and ultimately concluded that the agreements 'do not prohibit' class arbitration." Id. While consistent with the prevailing standard at the time the award was issued, the court concluded, "[t]his approach [was] plainly incompatible with the Supreme Court's subsequent pronouncements in Stolt-Nielsen." Id. Further, the court rejected the plaintiffs' argument that there was "any concrete basis in the record for the arbitrator to conclude that the parties [had implicitly or explicitly] manifested an intent to arbitrate class claims." SA21, 22 (Order at 10, 11). Specifically, the court noted that the arbitration clause at issue in Stolt-Nielsen, like the clause at issue here, broadly provides for arbitration of "any dispute" arising out of the contract; and an Ohio court had held that Sterling's agreement was not "adhesive and unconscionable," undermining any argument that it is an adhesion contract. Moreover, while many Title VII suits are litigated as class actions, there was no evidence, according to the court, of any "long-standing custom of class arbitration of such claims"; and, even assuming that Sterling deliberately chose not to amend the agreements to add an express class action waiver like the one in its consumer contracts, the company had no duty to "affirmatively clarify" that the agreements precluded class arbitration since mere silence on the issue does not constitute consent. SA19-21 (Order at 8-10) (original emphasis). Nor, the court added, did the RESOLVE Program's procedural requirements "evince any intent to permit arbitration of class claims." SA24 (Order at 13). Finally, the court rejected plaintiffs' efforts to distinguish Stolt-Nielsen on its facts. In the court's view, no distinctions - including the stipulation, the parties' sophistication and equal bargaining power, the fact that the plaintiff there had chosen the contract, and evidence that bilateral arbitration was customary in the shipping business - could "cure the defects in the [clause construction] award." SA22-24 (Order at 11-13). STANDARD OF REVIEW In considering a challenge to the district court's decision to vacate an arbitration award, this Court reviews the legal rulings de novo and the factual findings for clear error. ReliaStar Life Ins. Co. v. EMC Nat'l Life Co., 564 F.3d 81, 85 (2d Cir. 2009) (citing Banco de Seguros del Estado v. Mutual Marine Office, 344 F.3d 255, 260 (2d Cir. 2003)). "[A]n arbitration award should be enforced if there is a 'barely colorable justification for the outcome reached.'" Banco de Seguros, 344 F.3d at 260 (citations omitted). ARGUMENT CONSISTENT WITH STOLT-NIELSEN, THE RESOLVE AGREEMENTS CAN BE INTERPRETED TO PERMIT CLASS ARBITRATION. The district court erred in determining that the Supreme Court's recent decision in Stolt-Nielsen v. Animalfeeds International Corp., 130 S. Ct 1758 (2010), essentially compels a finding that the parties here did not agree to arbitrate employment discrimination claims on a class-wide basis. Stolt-Nielsen differs from this case in several material ways, and these distinctions would provide a justification for construing the agreements to encompass class arbitration. In Stolt-Nielsen, 130 S. Ct. at 1764, the Supreme Court did not rule that an arbitration clause that is silent on the issue of whether claims may be arbitrated on a class basis may never be construed to permit class arbitration. Rather, the Court's decision indicates that a determination of whether class arbitration is permitted under an agreement that does not expressly address the question depends on context and the particular circumstances of the case. In Stolt-Nielsen, a supplier of raw ingredients sought to represent a class of all direct purchasers of parcel tanker transportation services for specialty liquids in an arbitration proceeding against several shipping companies who allegedly engaged in anti-competitive activities. 130 S. Ct. at 1765. The arbitration clause in the parties' contract, which plaintiff had selected, covered "any dispute" arising out of the contract and was silent as to whether class arbitration was authorized. Significantly, however, the parties stipulated that they had not reached any agreement respecting class arbitration, and it was undisputed that the contract - one of several standard contracts in the industry - had never been the basis of a class action. Id. at 1765-66. Moreover, expert evidence established that it was customary in the shipping industry to resolve disputes through bilateral arbitration and that sophisticated multinational commercial entities like these parties would never have intended that the arbitration clauses in such contracts permit class arbitration. Id. at 1769 & n.6, 1775. Nevertheless, the arbitral panel hearing the case determined, based on "its own conception of sound policy," that class arbitration was permitted. Id. at 1768-69 & n.4 (noting that the panel cited arbitral awards in other cases, none of which involved sophisticated business entities). The Supreme Court held that this was error. The Court explained that "whether enforcing an argument to arbitrate or construing an arbitration clause, courts and arbitrators must 'give effect to the contractual rights and expectations of the parties.'" 130 S. Ct. at 1773-74 (quoting Volt Info. Sci. v. Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 479 (1989)). "'As with any other contract, the parties' intentions control.'" Id. (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 626 (1985)). And because arbitration is a "matter of consent, not coercion" (id. at 1773), a "party may not be compelled to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so." Id. at 1774-75 (adding that parties "may specify with whom they choose to arbitrate their dispute") (original emphasis). The "task of an arbitrator is to interpret and enforce [the] contract" consistent with the parties' intent. Id. at 1767-68. The Court acknowledged that consent need not be express but may be implied from the context and circumstances of the agreement. 130 S. Ct. at 1775; see also id. at 1783 (Ginsburg, J., dissenting) (noting that "the Court does not insist on express consent to class arbitration"). However, because class arbitration differs from bilateral arbitration in several material respects, arbitrators may not infer an "implicit agreement to authorize class-action arbitration . . . solely from the fact of the parties' agreement to arbitrate" or from "the parties' mere silence on the issue of class-action arbitration." Id. at 1775-76. They may, however, consider factors such as custom and practice in the industry and the applicable law as well as other terms of the agreement. Id. at 1768-69. Applying these principles to the facts in Stolt-Nielsen, the Court concluded that the panel could not reasonably have determined that the parties had implicitly or explicitly agreed to submit to class arbitration. On the contrary, the Court stated, the parties' stipulation that they had reached no agreement as to class arbitration "left no room for inquiry regarding the parties' intent" on that issue. 130 S. Ct. at 1770. And, the Court reasoned, although the panel had "commented on the breadth of the [contractual] language," given the stipulation, the "particular wording of the [agreement] was quite beside the point." Id. Thus, the Court concluded that since the evidence clearly showed that the parties did not agree to arbitrate on a class-wide basis, the panel exceeded its powers in requiring that they nevertheless submit the claims to class arbitration. Id. at 1776. As is apparent from the decision, however, Stolt-Nielsen does not hold that an arbitration agreement that is silent as to class actions must be construed to permit only bilateral arbitration. It simply holds that, considering all of the facts and circumstances in a particular case, there must be some objective basis for concluding that class arbitration is permitted under the parties' agreement, and no such basis existed in Stolt-Nielsen. This holding is unremarkable. Even apart from the stipulation, the circumstances there - a complex multinational business transaction between sophisticated international businesses of equal bargaining power under a contract, selected by the plaintiff, that had never been construed to permit class arbitration in an industry where there was no custom of class arbitration - do not support an inference that the parties agreed, implicitly or explicitly, to class arbitration. Cf. 130 S. Ct. at 1783 (Ginsburg, J., dissenting) (noting that analysis may differ where applicable agreement is a take-it-or-leave-it contract between parties of unequal bargaining power). In contrast, applying the same principles to the circumstances in this case, an arbitrator could reasonably reach the opposite conclusion. Unlike claims under maritime law, claims under Title VII have historically been brought and resolved on a class-wide basis, both by the government, see, e.g., Teamsters v. United States, 421 U.S. 324 (1977), and by private individuals, Franks v. Bowman Transp. Co., 424 U.S. 747 (1976). From early on, Congress and the courts have recognized that "claims under Title VII involve the vindication of a major public interest," and that "many Title VII claims are necessarily class action complaints." Conference Report, U.S. Sen. Labor & Pub. Welfare, Labor Subcomm., reprinted in Legislative History of the Equal Employment Opportunity Act of 1972 1847 (GPO Nov. 1972) ("1972 Act Leg. Hist."), copy attached; cf. East Texas Motor Freight Sys. v. Rodriguez, 431 U.S. 395, 405 (1977) (recognizing that "suits alleging racial or ethnic discrimination are often . . . class suits, involving classwide wrongs"). Indeed, because "title VII actions are by their very nature class complaints, . . . any restriction on such actions would greatly undermine the effectiveness of title VII." S. Rep. No.92-415, 92d Cong., 1st Sess. 27 (1972), reprinted in 1972 Act Leg. Hist. at 436, copy attached. Accordingly, absent some clear evidence to the contrary, parties involved in a dispute under Title VII could ordinarily expect that statutory claims could be brought in a class action, whether in litigation or in arbitration. It is in this context that the RESOLVE Program arbitration agreements and related materials should be analyzed. The agreements specify that they apply to "any dispute, claim, or controversy" regarding the employee's "employment or the termination [thereof]." See, e;.g., JA0240. The agreements also provide that employees may seek and be awarded "equal remedy" in arbitration, and arbitrators are empowered to award "any types of legal or equitable relief that would be available in a court of competent jurisdiction." Id. Nothing in this broad language suggests that it applies only to claims and relief pursued in bilateral arbitrations. On the contrary, the language could easily be read to extend to class actions and the legal and equitable remedies available in such cases. Cf. Mastrobuono v. Shearson Lehman Hutton, 514 U.S. 52, 61 n.7 (1995) (noting that "'it would seem sensible to interpret the "all disputes" and "any remedy or relief" phrases to indicate, at a minimum, an intention to resolve through arbitration any dispute that would otherwise be settled in a court, and to allow the chosen dispute resolvers to award the same varieties and forms of damages or relief as a court would be empowered to award'") (quoting with approval Raytheon Co. v. Automated Bus. Sys., 882 F.2d 6, 10 (1st Cir. 1989)). Thus, employees signing a RESOLVE agreement could reasonably have expected that they could still pursue class actions in arbitration even if they could no longer do so in a court. Moreover, the agreements are take-it-or-leave-it contracts drafted by the company. As a standardized agreement between parties with unequal bargaining power, any ambiguity should "be interpreted strictly against the drafter" - here, Sterling - "and in favor of the nondrafting party" - here, plaintiffs. See, e.g., Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 220, 797 N.E.2d 1256, 1262 (Ohio 2003) (quoting Century Realty Co. v. Clutter, 62 Ohio St.2d 411, 413, 406 N.E.2d 515, 517 (Ohio 1980)); accord Mastrobuono, 514 U.S. at 62-63 (applying "common law rule of contract interpretation that a court should construe ambiguous language against the interest of the party that drafted it" in order to "protect the party who did not choose the language from an unintended or unfair result"). In its pleadings below, Sterling contended that the structure of the RESOLVE program demonstrates that the company intended not to permit class arbitration of employment disputes. Specifically, the company referenced the three-step RESOLVE process and the provisions stating that arbitrations would be conducted near the complainant's workplace, applying local law, by an arbitrator licensed in the applicable jurisdiction. See JA680 (Clause Construction Reply brief at 7). In addition, in response to plaintiffs point that Sterling had included an explicit class waiver provision in some of its consumer credit contracts, the company asserted that it had opted not to do so in its employment contracts out of concern that such a provision would be unenforceable in jurisdictions like California. Id. The district court noted, and we do not disagree, that the features of the RESOLVE program that defendant points to "do not [themselves] evince any assent" to class arbitration. SA24 (Order at 13). In our view, however, they simply suggest that the agreements are ambiguous and, so, should be construed against the company - something the district court did not do. The three-step RESOLVE process resembles Title VII's charge-filing requirements that courts have agreed can be waived with respect to members of a class. See, e.g., United Airlines v. McDonald, 432 U.S. 385, 389 n.6 (1977). Similarly, the emphasis on local law (to the extent that federal standards may vary from state to state) and venue could logically have been included not to shield the company from valid class discrimination claims but rather to reassure employees that, to the extent they opt for arbitration, their claims will be resolved conveniently and competently by professional arbitrators knowledgeable in the law. See generally JA0258 (program brochure, comparing advantages of arbitration over court). As for the class action waiver, the company's asserted justification for its omission is merely a post-hoc explanation of counsel. If true, this decision reflects an unsavory attempt by the company to lull employees into inadvertently waiving a procedural right that has proved to be important in the Title VII context. In addition, the proffered explanation for the company's decision to omit an explicit waiver in employment contracts while including one in consumer contracts makes little sense since it may be assumed that the same state laws that might render the waivers unenforceable in employment contracts would also apply to consumer contracts. See, e.g., Omstead v. Dell, 594 F.3d 1081, 1086-87 (9th Cir. 2010) (holding class action waiver in computer sales contract unenforceable under California law). Nor is there reason to assume that implied waivers would be viewed more favorably than express ones. Thus, Sterling might simply have decided that it was not worth amending hundreds of existing agreements to add this term, particularly since, unlike a class of disgruntled consumers who might have nothing in common besides the nature of their claims, a class of employees might well be comparatively homogeneous and, so, more manageable. In short, because the factors Sterling relies on do not clearly reflect an intent to preclude class actions, they need not override the inference raised by the terms of the agreement, read in the context of Title VII case law and tradition, that arbitration of class claims is permitted. In holding that the RESOLVE agreements cannot be read to permit class arbitration, the district court made two key errors in interpreting and applying Stolt-Nielsen. First, the court read too much into the statements that consent cannot be inferred merely from silence or an agreement to arbitrate. The court transformed these statements into a requirement for "affirmative" evidence - over and above any inference that could reasonably be drawn from the custom and history of class action enforcement of Title VII and the language of the agreements - that the parties intended to permit class arbitration. SA19 (Order at 8). Yet, those are factors that the Supreme Court criticized the Stolt-Nielsen panel for disregarding in ascertaining the parties' intent. See Stolt-Nielsen, 130 S. Ct. at 1768-69 & n.6.<3> Second, the court ignored the very different expectations that these very different types of parties might reasonably have had in viewing the arbitration agreements in the two cases. See SA23 (Order at 12). While the parties in Stolt- Nielsen would reasonably expect that the agreement permitted only bilateral arbitration since that is what is customary in that industry, the parties in this case might reasonably expect the opposite since class actions are a traditional means of challenging a pattern or practice of sex discrimination. Finally, we note that under Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991), individuals may be compelled to arbitrate their statutory discrimination claims only to the extent that they "effectively may vindicate" their rights in that forum. See also Kristian v. Comcast Corp., 446 F.3d 25, 54 (1st Cir. 2006) (noting that the "legitimacy of the arbitral forum rests on the presumption that arbitration provides a fair and adequate mechanism for enforcing statutory rights"). Unless the agreements here are read to permit class actions, the plaintiffs may be unable effectively to vindicate their Title VII rights through arbitration. This is due, in large part, to the nature of the evidence needed to prove such claims and the broad remedies that follow where plaintiffs are successful in establishing class claims. Plaintiffs are alleging a nationwide pattern or practice of sex discrimination in pay and promotion and are seeking all appropriate injunctive and equitable relief as well as money damages. There is a "crucial difference between an individual's claim of discrimination and a class action alleging a general pattern or practice of discrimination." Cooper v. Federal Reserve Bank, 467 U.S. 867, 876 (1984). "The inquiry regarding an individual's claim is the reason for a particular employment decision while 'at the liability stage of a pattern-or-practice trial the focus often will not be on individual hiring decisions but on a pattern of discriminatory decisionmaking.'" Id. (quoting Teamsters, 432 U.S. at 360 n.46). Significantly, Title VII pattern-or-practice claims, whether brought by the Commission or private parties, typically depend on statistical and other kinds of systemic evidence. Statistical evidence in particular is an "important source of proof" in class suits alleging employment discrimination. Teamsters, 431 U.S. at 340 n.20; Cooper, 467 U.S. at 876 (noting that "pattern is normally established with statistical evidence"); see also, e.g., Robinson v. Metro-North Commuter R.R., 267 F.3d 147, 158-59 (2d Cir. 2001) (noting importance of statistical evidence in Title VII class action). Indeed, in many cases, "the only available avenue of proof is the use of statistics to uncover clandestine and covert discrimination by the employer." Teamsters, 431 U.S. at 340. Although courts acknowledge that statistical and other similar evidence may also be relevant in individual cases, as a practical matter, it is normally available only in class proceedings. There are two main reasons for this. First, developing such evidence is too costly for individuals, particularly where, as here, each claimant's individual relief may be relatively small. It therefore makes economic sense to develop statistical evidence only if the cost can be spread across all of the affected class. Cf. Kristian, 446 F.3d at 55 (noting that ban on class actions would prevent spreading costs across multiple plaintiffs and force putative class members to assume financial burdens so prohibitive as to deter the bringing of claims) (citation omitted). Second, even if individual employees had the financial resources to retain one or more experts to prepare class-wide analyses, arbitrators might well refuse to order the employer to produce the requisite data, and even if the data were available, many arbitrators might refuse to admit the evidence, finding it irrelevant to individual employees' claims. Absent such evidence, however, employees could not establish that the company regularly discriminates against female employees in pay and promotion. Furthermore, even assuming that individual employees could establish that they had been subjected to discrimination on an individual basis, without evidence of a wide-spread pattern of discrimination, even a sympathetic arbitrator might well refuse to issue the kind of broad injunctive and equitable relief that would be available in a class action. Without such relief, however, discrimination occurring elsewhere in the company would continue unabated. Construing the arbitration agreements in the RESOLVE Program to prohibit class actions would raise exactly these concerns. Unlike other cases where class- wide treatment is denied, the alternative to a class action in this case is not one large consolidated action before a single decisionmaker but rather hundreds of individual arbitrations, occurring across the country in front of hundreds of different arbitrators, each applying his or her own procedural standards and awarding whatever employee-specific relief he or she deems appropriate in that individual case. No one would be focusing on the big picture, and there would be no effective judicial review of those decisions. Accordingly, to ensure that the district court's narrow reading of Stolt- Nielsen does not preclude plaintiffs from developing and using the evidence needed to prove their claims and from obtaining all relief appropriate to their proof, we urge the Court to find that, consistent with Stolt-Nielsen, the RESOLVE agreements may reasonably be construed to permit class arbitration. CONCLUSION For the foregoing reasons, the judgment below should be reversed. Respectfully submitted, P. DAVID LOPEZ General Counsel VINCENT J. BLACKWOOD Acting Associate General Counsel ______________________________ BARBARA L. SLOAN Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M Street, N.E, 5th Floor Washington, DC 20507 202-663-4721 fax: 202-663-7090 barbara.sloan@eeoc.gov CERTIFICATE OF COMPLIANCE This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because it contains 5824 words from the Statement of Interest through the Conclusion, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii). This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because it has been prepared in a proportionally spaced typeface using Microsoft Word 2003 with Times New Roman 14-point font. __________________________________ Barbara L. Sloan Attorney for Equal Employment Opportunity Commission Dated:_22 October, 2010_________ ADDENDUM CERTIFICATE OF SERVICE I certify that on October 22, 2010, I electronically served the foregoing Brief of the Equal Employment Opportunity Commission as Amicus Curiae via ECF on the following counsel: Gerald L. Maatman, Jr. David Bennett Ross SEYFARTH SHAW LLP 620 Eighth Avenue, 32nd Floor New York, NY 10018-1405 gmaatman@seyfarth.com dross@seyfarth.com Daniel B. Klein Seyfarth Shaw LLP World Trade Center East Two Seaport Lane, Suite 300 Boston, MA 02210 dklein@seyfarth.com Stephen S. Zashin Zashin & Rich Co., LPA 55 Public Square, 4th Floor Cleveland, OH 44113 ssz@zrlaw.com Joseph M. Sellers Jenny R. Yang Kalpana Kotagal COHEN MILSTEIN SELLERS & TOLL PLLC 1100 New York Avenue, N.W., Suite 500, West Tower Washington DC 20005 jsellers@cohenmilstein.com jyang@cohenmilstein.com kkotagal@cohenmilstein.com Sam J. Smith Loren B. Donnell Burr & Smith LLP 442 West Kennedy Boulevard, Suite 300 Tampa, FL 33606 ssmith@burrandsmithlaw.com ldonnell@burrandsmithlaw.com Thomas A. Warren Thomas A. Warren Law Offices, PL 2032-D Thomasville Boulevard Tallahassee, FL 32308 tw@nettally.com ________________________________ Barbara L. Sloan CERTIFICATE OF SERVICE I certify that on October 28, 2010, I electronically served the foregoing Corrected Brief of the Equal Employment Opportunity Commission as Amicus Curiae via ECF on the following counsel: Gerald L. Maatman, Jr. David Bennett Ross SEYFARTH SHAW LLP 620 Eighth Avenue, 32nd Floor New York, NY 10018-1405 gmaatman@seyfarth.com dross@seyfarth.com Daniel B. Klein Seyfarth Shaw LLP World Trade Center East Two Seaport Lane, Suite 300 Boston, MA 02210 dklein@seyfarth.com Stephen S. Zashin Zashin & Rich Co., LPA 55 Public Square, 4th Floor Cleveland, OH 44113 ssz@zrlaw.com Joseph M. Sellers Jenny R. Yang Kalpana Kotagal COHEN MILSTEIN SELLERS & TOLL PLLC 1100 New York Avenue, N.W., Suite 500, West Tower Washington DC 20005 jsellers@cohenmilstein.com jyang@cohenmilstein.com kkotagal@cohenmilstein.com Sam J. Smith Loren B. Donnell Burr & Smith LLP 442 West Kennedy Boulevard, Suite 300 Tampa, FL 33606 ssmith@burrandsmithlaw.com ldonnell@burrandsmithlaw.com Thomas A. Warren Thomas A. Warren Law Offices, PL 2032-D Thomasville Boulevard Tallahassee, FL 32308 tw@nettally.com _____________________________ Barbara L. Sloan *********************************************************************** <> <1> The Commission takes no position on any other issues in this case. <2> The Commission has brought an enforcement action against this same employer alleging similar claims in another jurisdiction. By their terms, however, the applicable arbitration agreements purport to require employees to waive the right to obtain any relief from the Commission's suit. <3> The district court refused to draw any inference from the broad language in the coverage and relief provisions of the RESOLVE agreements because, in the court's view, the arbitration clause in Stolt-Nielsen was similarly broadly worded. SA20-21 (Order at 9-10). This reasoning is flawed. As noted above, "the particular wording [in Stolt-Nielsen] was quite beside the point" in light of the parties' stipulation. 130 S. Ct. at 1770.