EEOC v. Joslin Dry Goods Co. (10th Cir.) Appellee brief July 7, 2006 ____________________________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT ____________________________________________________ No. 06-1143 ____________________________________________________ EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellee, and MELISSA R. WOLFF, Plaintiff-Intervenor-Appellee, v. JOSLIN DRY GOODS CO., d/b/a DILLARD'S, Defendant-Appellant. On Appeal from the United States District Court for the District of Colorado Hon. Walker D. Miller, Civil Action No. 05-cv-177-WM-OES BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS APPELLEE JAMES L. LEE Deputy General Counsel LORRAINE C. DAVIS Acting Associate General Counsel Oral argument is requested. ANNE NOEL OCCHIALINO Attorney U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 1801 L Street, N.W., Room 7030 Washington, DC 20507 (202) 663-4724 TABLE OF CONTENTS TABLE OF CONTENTS ii TABLE OF AUTHORITIES iii STATEMENT OF THE ISSUE 1 STATEMENT OF THE CASE 1 A. Nature of the Case and Course of Proceedings 1 B. Disposition Below 2 SUMMARY OF ARGUMENT 5 WOLFF HAS AN INDEPENDENT TITLE VII CLAIM THAT COULD BE ARBITRATED PURSUANT TO A VALID AGREEMENT, BUT SEVERAL FACTORS COUNSEL IN FAVOR OF STAYING THE ARBITRATION PENDING LITIGATION.. 7 CONCLUSION 19 CERTIFICATE OF COMPLIANCE 21 CERTIFICATE OF SERVICE 22 CERTIFICATE OF DIGITAL SERVICE 22 TABLE OF AUTHORITIES Cases Avoyelles Sportsmen's League v. Marsh, 786 F.2d 631 (5th Cir. 1986) 13 Alvarado v. J.C. Penney Co., Inc., 997 F.2d 803 (10th Cir. 1993) 10 Connecticut Gen. Life Ins. Co. v. Sun Life Assurance Co., 210 F.3d 771 (7th Cir. 2000) 14 Coors Brewing Co. v. Molson Breweries, 51 F.3d 1511 (10th Cir. 1995) 15 EEOC v. Pemco Aeroplex, Inc., 383 F.3d 1280 (11th Cir. 2004) 16, 17 EEOC v. Sidley Austin LLP, 437 F.3d 695 (7th Cir. 2006) 16 EEOC v. Waffle House, Inc., 534 U.S. 279 (2002) passim General Tel. Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318 (1980) 8 Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983) 14 Reynolds v. Byrd, 470 U.S. 213 (1985) 14 Riddle v. Cerro Wire & Cable Group, Inc., 902 F.2d 918 (11th Cir. 1990) 17 Riley Mfg., Inc. v. Anchor Glass Container Corp., 157 F.3d 775 (10th Cir. 1998) 1 United States v. Allegheny-Ludlum Indus., Inc., 517 F.2d 826 (5th Cir. 1975) 8 Statutes 42 U.S.C. § 2000e-5(f)(1) 8, 13 PRIOR OR RELATED APPEALS There are no prior or related appeals. STATEMENT OF THE ISSUE Assuming, arguendo, the existence of a valid arbitration agreement between an employer and a former employee who has intervened in an EEOC public enforcement action against the employer, whether the intervenor has a claim separate from the EEOC's, and, if so, whether a district court should stay the arbitration of that claim pending litigation or stay the litigation of the intervenor's claim pending arbitration. STANDARD OF REVIEW This Court reviews "de novo a district court's order denying a stay of a federal suit pending arbitration pursuant to 9 U.S.C. § 3." Riley Mfg., Inc. v. Anchor Glass Container Corp., 157 F.3d 775, 779 (10th Cir. 1998). STATEMENT OF THE CASE A. Nature of the Case and Course of Proceedings The EEOC commenced this Title VII enforcement action in January 2005, alleging that Dillard's subjected Wolff and other similarly situated individuals to harassment based on their sex. DA64-70.<1> On March 4, 2005, Wolff filed a motion to intervene to bring a claim of sex-based harassment. DA71-73. Dillard's opposed Wolff's intervention and filed a motion to stay all proceedings with respect to Wolff's claim pending arbitration. Doc.11.<2> In a September 22, 2005 order, the magistrate denied Dillard's objection to Wolff's intervention and recommended that Dillard's motion to stay be granted. DA101-119. The Plaintiffs filed objections to the magistrate's recommendation to stay Wolff's proceedings. Doc.38. On March 29, 2006, the district court disagreed with the magistrate's decision and denied Dillard's motion to stay. DA120. On April 7, 2006, Dillard's filed a timely appeal from the district court's order. Doc.78. B. Disposition Below The district court denied Dillard's motion to stay Wolff's proceedings pending arbitration. DA120. The court interpreted the Supreme Court's language in EEOC v. Waffle House, Inc., 534 U.S. 279 (2002) as "demonstrate[ing] that an enforcement action brought by the EEOC precludes any independent suit by the employee." DA122. Specifically, the court quoted the Supreme Court's language that, "'If . . . 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.'" DA122 (quoting Waffle House, 534 U.S. at 291). The court further reasoned that an EEOC enforcement action "is just that; it is not a lawsuit on behalf of an employee and does not become such upon intervention by the employee." DA122. Accordingly, the court found, "a charging party's intervention in an EEOC enforcement [action] is not an independent lawsuit but rather a means to protect his or her interests in the EEOC's suit for victim-specific relief." DA122-123. "Because the EEOC chose to file this enforcement action, Wolff lost her right to bring an independent cause of action," the court found, and her "intervention . . . merely gives her status as a party to participate with the EEOC, and her complaint does not constitute an independent claim that would be subject to an arbitration agreement." DA123. Given this reasoning, the court found it unnecessary to decide whether Wolff's arbitration agreement was valid, and the court denied Dillard's motion to stay. DA124. STATEMENT OF FACTS On January 10, 1993, Melissa Wolff, an 18-year old high school senior, applied with Scott McGinnis to work at Dillard's. Doc.14, Ex. 2 (Wolff Decl. 1). On January 15, 2003, McGinnis called Wolff back to his office to complete her paperwork. One of the documents she signed was a one-page document entitled "Agreement to Arbitrate Certain Claims." Id. at 3,4. Although the Agreement referenced the "Rules of Arbitration" and stated that they were attached, Wolff did not receive them. Id. at 4. The Rules state that if an employee files an EEOC charge of discrimination, she must initiate arbitration within 93 days of receipt of a right-to-sue letter, but the Rules do not address how an employee is to proceed - or even if she must arbitrate - if the EEOC finds cause and files its own lawsuit. DA147. The EEOC's complaint alleges that McGinnis subjected Wolff to offensive and unwanted sexual advances beginning on her first day of work and that his conduct on January 18, 2003, included grabbing Wolff's buttocks, rubbing her hips, attempting to hug her, telling her he wanted to kiss her, asking if she wore thong underwear, telling her she was his princess and that he never wanted her to leave, asking her if she thought he had a good body and if she would be interested in an older man, and repeatedly calling her cell phone after she left his office. DA66, 9, 10, 15. The complaint also alleges that the next day Wolff filed a police report regarding McGinnis's conduct, to which he admitted, and that Dillard's subsequently terminated McGinnis's employment based on this incident and similar allegations previously made by two female employees. DA67, 17, 18. On January 31, 2005, the EEOC filed this public enforcement action on behalf of Wolff and other similarly situated individuals alleging that Dillard's subjected them to sexual harassment in violation of Title VII. DA64, 1. Wolff intervened, also alleging a Title VII claim of sexual harassment. DA74. As discussed above, the district court denied Dillard's motion to stay Wolff's proceedings pending arbitration. SUMMARY OF ARGUMENT Dillard's argues that the district court impermissibly considered the merits of Wolff's claims when it concluded that because the EEOC filed this enforcement action, Wolff had no independent claim that could be subject to arbitration and Dillard's motion to stay Wolff's claim pending arbitration should therefore be denied. Dillard's also argues that the court erred by treating the EEOC's presence in this lawsuit as "sealant" against arbitration. The Commission submits this brief to emphasize a point conceded by Dillard's: that the EEOC is not a party to Wolff's arbitration agreement and cannot be required to arbitrate. The Commission also submits this brief to address the district court's contention that pursuant to EEOC v. Waffle House, a charging party such as Wolff who intervenes in an EEOC enforcement action has no separate Title VII claim and therefore has no claim that could be subject to an arbitration agreement. On this point, the Commission agrees with Dillard's that the district court erred. In the Commission's view, Wolff does have a separate Title VII claim that she could - independently of the EEOC - settle, arbitrate, or litigate. The district court did not decide, however, whether Wolff's arbitration agreement is valid, and Dillard's does not address this issue in its opening brief. Accordingly, the Commission takes no position on that issue in this appeal. The Commission also submits this brief to address the issue of how, assuming the arbitration agreement is valid, the district court may proceed as to the issue of timing. While the Commission would be able to litigate its claim under any scenario, the district court would have two options when ruling on Dillard's motion to stay Wolff's proceedings pending arbitration: 1) to grant the motion, staying the litigation of Wolff's claim pending arbitration; or 2) to allow Wolff to litigate her claim until the EEOC's action is resolved (through a judgment, voluntary dismissal, or settlement) and then to compel Wolff to arbitrate whatever claim she has left and chooses to pursue. The Commission contends that the second option is the most consistent with Title VII and would yield the most consistent results, while still complying with the FAA's presumption in favor of arbitration. ARGUMENT WOLFF HAS AN INDEPENDENT TITLE VII CLAIM THAT COULD BE ARBITRATED PURSUANT TO A VALID AGREEMENT, BUT SEVERAL FACTORS COUNSEL IN FAVOR OF STAYING THE ARBITRATION PENDING LITIGATION. The district court concluded below that upon the EEOC's filing of this enforcement action, "Wolff lost her right to bring an independent cause of action" and found that "her complaint does not constitute an independent claim that would be subject to an arbitration agreement." DA123. Dillard's argues that the district court's conclusion that Wolff has no independent claim that could be subject to arbitration impermissibly delved into the merits of her claim and imposed an "independent claim" requirement not present in the FAA and was, in any event, erroneous. Br. at 16-21. Initially, we note that neither the district court's decision nor Dillard's brief addresses the question of whether Wolff's arbitration agreement is valid. Accordingly, the Commission takes no position on that issue in this appeal. As Dillard's acknowledges, however, even if Wolff's arbitration agreement is valid, "the EEOC is not a party to the arbitration agreement and cannot be required to arbitrate." Br. at 11; see EEOC v. Waffle House, Inc., 534 U.S. 279, 294 (2002) ("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 EEOC will be able to litigate its claim regardless of whether Wolff's arbitration agreement is determined to be valid. We agree with Dillard's that to the extent the district court's order rests on a finding that the filing of the EEOC's public enforcement action extinguished Wolff's Title VII claim, this finding was erroneous. As Dillard's notes, Title VII was enacted in 1964 and authorized employees, but not the EEOC, to file claims against their employers in federal court. See General Tel. Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318, 325-26 (1980). In 1972, Congress amended Title VII to give the EEOC authority to sue employers as a means "to implement the public interest as well as to secure more effective enforcement of Title VII." Id. at 326. This authority was "intended to supplement, not replace, the private action." Id. at 326. Under the 1972 amendments, once the EEOC has filed an enforcement action, a charging party loses the right to institute an independent action against the employer but has a statutory right to intervene. 42 U.S.C. § 2000e-5(f)(1) (stating that "[t]he person or persons aggrieved shall have the right to intervene in a civil action brought by the Commission"); General Tel., 446 U.S. at 326 (noting aggrieved person's right to intervene); United States v. Allegheny-Ludlum Indus., Inc., 517 F.2d 826, 870 n.62 (5th Cir. 1975) (stating that the charging party has an "unconditional right to intervene in order to protect his or her own interests in a § 706 suit brought by the Commission, which otherwise cuts off the private party's right to sue"). Thus, the district court's statement that "Wolff lost her right to bring an independent cause of action" once the EEOC filed suit was correct in the sense that Wolff could no longer file her own Title VII lawsuit in federal court. The court erred, however, in concluding that Wolff's complaint-in-intervention "does not constitute an independent claim that would be subject to arbitration." DA123. The district court reached this conclusion based on its misunderstanding of the Supreme Court's statement in Waffle House that "'If . . . 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.'" DA122 (quoting Waffle House, 534 U.S. at 291).<3> The district court seemed to view this statement as meaning that the EEOC's filing of a public enforcement action extinguishes the employee's own claim and that an employee who intervenes in an EEOC enforcement action is therefore not asserting her own claim but is somehow merely standing by as a watchful observer to protect her own interests. See DA122-23 ("A charging party's intervention in an EEOC enforcement [action] is not an independent lawsuit but rather a means to protect his or her interests in the EEOC's suit for victim-specific relief."). We agree with Dillard's that this conclusion is at odds with established law holding that "when a party intervenes, it becomes a full participant in the lawsuit and is treated just as if it were an original party." Alvarado v. J.C. Penney Co., Inc., 997 F.2d 803, 805 (10th Cir. 1993) (internal quotations and citation omitted). We also agree that the court's reading of Waffle House is erroneous. Read in context, the Supreme Court's statement in Waffle House that an intervenor in an EEOC action "has no independent cause of action" can only be read to mean that once the EEOC files suit an employee is foreclosed from filing a separate independent lawsuit, although she may intervene in the EEOC's action to assert her own claim. The Court's statement comes from a passage in Waffle House emphasizing that the EEOC is "master of its own case" and that a charging party does not control the EEOC's decision to prosecute a claim. Waffle House, 534 U.S. at 291. The sentence immediately preceding the Court's statement that an intervenor has "no independent cause of action" explains that an employee can only sue within 180 days after filing a charge upon receipt of a right-to-sue letter from the EEOC. In this context, the Court's statement that an employee "has no independent cause of action" once the EEOC has sued is logically read as referring to the fact that an employee cannot sue her employer in a separate lawsuit once the EEOC has done so. Other statements in the Supreme Court's Waffle House opinion support this conclusion. The Court repeatedly recognized that the plaintiff, who had signed an arbitration agreement but had never sought to enforce it or to intervene in the EEOC's action, potentially had his own claim. See Waffle House, 534 U.S. at 296 (stating that if the plaintiff had "failed to mitigate his damages, or had accepted a monetary settlement, any recovery by the EEOC would be limited accordingly"), 297 (stating that "no question concerning the validity of [plaintiff's] claim or the character of 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"; "It is an open question whether a settlement or arbitration judgment would affect the validity of the EEOC's claim or the relief the EEOC may seek"), 298 (stating that "ordinary principles of res judicata, mootness, or mitigation may apply to EEOC claims"). Accordingly, employees who intervene in EEOC actions bring their own claims to the table, and these claims can - independently of the EEOC's - be litigated, arbitrated, or settled. The Commission's agreement with Dillard's that Wolff has a Title VII claim separate from the EEOC's claim that could be arbitrated makes it unnecessary to address Dillard's argument that the court impermissibly considered the merits of Wolff's claim or that it erroneously treated the EEOC's presence in this action as a "sealant" against arbitration. This agreement, however, is not the end of the inquiry. If Wolff's agreement is valid and she is compelled to arbitrate her claim against Dillard's, the court must decide whether to stay the litigation of Wolff's complaint-in-intervention pending arbitration or whether to allow Wolff to litigate her complaint-in-intervention until the EEOC's action is resolved (through a judgment, voluntary dismissal, or settlement) and then compel Wolff to arbitrate whatever claim she has left and chooses to pursue.<4> This decision should probably be made by the district court in the first instance, if necessary, should Wolff's arbitration agreement be found valid. Nevertheless, the Commission notes several considerations counseling in favor of the second option, i.e., permitting Wolff to litigate her claim as an intervenor until the EEOC's claim has been resolved, and then, as appropriate, compelling Wolff to arbitrate.<5> We start by noting that neither Title VII nor the typical arbitration agreement expressly covers this situation. As discussed above, Congress amended Title VII in 1972 to permit the EEOC to file its own enforcement action and allowed a charging party to intervene in such an action. But Congress said nothing about whether the charging party should retain that right (to participate as a party in the Commission's enforcement action to protect her interests) if she has previously agreed to submit her claims against the company to arbitration. Similarly, the typical arbitration agreement - such as the one at issue in this case - commits the charging party to resolve any claims she has against her employer in arbitration but makes no explicit provision for how she can or should protect her interests once the Commission has filed suit: that is, once her potential role as a litigant combines pursuing her claims against her employer and protecting herself against actions by the EEOC that she views as not adequately protecting her individual interests. The district court should therefore endeavor to accommodate, to the extent possible, both the statutory scheme and the intent of the contracting parties. This is difficult because Title VII contemplates a single judicial proceeding that will resolve both the Commission's claims and the charging party's claims, while the typical arbitration agreement contemplates an arbitral proceeding to resolve the employee's claims and is silent with respect to the EEOC's claims. The disadvantages of allowing both the litigation and the arbitration proceedings to go forward simultaneously are apparent. It is inefficient to have the parties involved at the same time in two parallel proceedings in different fora addressing claims that are legally and factually identical. See, e.g., Connecticut Gen. Life Ins. Co. v. Sun Life Assurance Co., 210 F.3d 771, 776 (7th Cir. 2000) ("To have the identical dispute litigated [in different fora at the same time] is a formula for duplication of effort . . . ."). Dillard's argues that Dean Witter Reynolds v. Byrd, 470 U.S. 213 (1985) and Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983), preclude an argument that the FAA permits a district court to refuse to order arbitration of some claims on the ground that it would be inefficient to litigate the non-arbitrable claims and arbitrate the rest. Those cases are distinguishable, however, because they involved different claims. In Byrd, the Supreme Court was presented with federal securities claims and pendent state claims, and in Moses the Court's statement that the FAA requires "piecemeal" litigation was made in reference to the possibility that the hospital's claims against the construction company involving delay and impact costs might be arbitrated while the hospital's indemnity claims against the architect might be resolved in state court. Here, in contrast, Wolff's claim is identical to the EEOC's claim: both are Title VII claims based on identical facts alleging that Dillard's subjected Wolff to sexual harassment. Accordingly, it would not make sense to order the arbitration of Wolff's Title VII claim while that claim was being litigated by the EEOC or by the EEOC and Wolff. Similarly, Coors Brewing Co. v. Molson Breweries, 51 F.3d 1511 (10th Cir. 1995), does not dictate that a district court must send an intervenor's identical claim to arbitration because in that case the claims sent to arbitration were different than those that were litigated. See Coors, 51 F.3d 1511 (holding that antitrust claims that did not implicate the contract between the parties could be litigated although antitrust claims related to the contract, and other claims relating to the contract, were subject to arbitration). In addition to being inefficient, permitting the litigation and the arbitration to proceed simultaneously threatens to yield inconsistent results, no matter which proceeding finishes first. If the arbitration ends first, the charging party would likely be bound by the result but the Commission would not because it is not in privity with the charging party; the Commission might well continue to litigate if the arbitration yields no award for the charging party or yields an award that the agency deems inadequate to serve the public interest. See, e.g., EEOC v. Pemco Aeroplex, Inc., 383 F.3d 1280, 1286-91 (11th Cir. 2004) (holding that the EEOC was not in privity with private plaintiffs who had received adverse jury verdict on individual claims for hostile work environment and that the EEOC could therefore seek relief for those plaintiffs in its action against the same employer alleging companywide hostile work environment), 1290-91 ("[I]t is particularly rare to find privity between a private party in one action and a party in a later action when the party in the later action is a governmental agency."); see also EEOC v. Sidley Austin LLP, 437 F.3d 695, 696 (7th Cir. 2006) (holding that the EEOC could obtain monetary relief on behalf of individuals who failed to timely file ADEA charges and stating that "the doctrinal heart of Waffle House" is that "the EEOC is not in privity with the victims for whom it seeks relief"). If, on the other hand, the court stays the litigation of the intervenor's claim pending arbitration and the Commission's litigation ends first (with, for example, a summary judgment order, a voluntary dismissal or a settlement), the intervenor might well not be bound by that result because she would not have been a party to the litigation and would therefore be free to pursue her claims in the arbitral proceeding. See Pemco, 383 F.3d at 1293 ("[R]esolution of an EEOC case does not necessarily bar private suit from the person on whose behalf the EEOC originally acted."); Riddle v. Cerro Wire & Cable Group, Inc., 902 F.2d 918 (11th Cir. 1990) (where employee rejected EEOC consent decree, refused to sign release, did not receive any money, and subsequently filed her own Title VII suit, holding that there was no privity and that res judicata therefore did not bar her action). The alternative to allowing both the litigation and the arbitration to proceed simultaneously is to allow the intervenor to continue litigating her claim against the employer and to stay the order compelling arbitration pending resolution of the litigation. This approach has several distinct advantages. It eliminates entirely the necessity for simultaneous parallel proceedings, and it significantly reduces the likelihood that a second proceeding will be needed at all because if the charging party is participating as a party in the litigation, a resolution of the litigation will likely also resolve her claims or be binding on her. This alternative also correspondingly reduces the likelihood of inconsistent results, and levels the playing field, since the employer, the employee, and the agency are all participating as equal parties in the same proceeding. Because the contractual right that an employer acquires when it enters an arbitration agreement with a private individual is not - and never has been - an absolute right to an arbitral determination of whether the employer's treatment of the individual violated Title VII, this approach is not inconsistent with the federal policy favoring the enforcement of arbitration agreements. The employer's right to an arbitral determination of whether it violated Title VII is conditional because it is subject to the Commission's statutory right to seek a judicial determination of that issue. Thus, if the employee sues and the Commission does not, the employer can secure an arbitral forum for the employee's individual claims. But if the Commission sues, the employer has no contractual right to an arbitral determination of the agency's claims, and accordingly must respond in the judicial forum whether the charging party intervenes or not. Thus, once the Commission sues, the employer no longer has any right to insist that the issue of whether it violated Title VII be resolved solely in the arbitral forum. Accordingly, the benefit it sought to obtain when it entered into its agreement - an arbitral determination of the employee's claim - is no longer available. Once the litigation of the Commission's claims is resolved, however, the stay would be lifted, and, if the intervenor has any Title VII claim left to pursue, she would have to do so in the arbitral forum as the agreement provides. For example, if the Commission settled its claims on terms which were not acceptable to the intervenor, or voluntarily dismissed its claims, the intervenor would be compelled to arbitrate any remaining claims she sought to pursue. CONCLUSION For the foregoing reasons, the Commission respectfully requests that this Court find that Wolff has a Title VII claim independent of the Commission's claim and that, assuming Wolff has a valid arbitration agreement, the district court may stay the arbitration pending litigation. Respectfully submitted, JAMES L. LEE Deputy General Counsel LORRAINE C. DAVIS Acting Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel ______________________________ s/ ANNE NOEL OCCHIALINO Attorney U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, N.W., Room 7030 Washington, DC 20507 (202) 663-4724 Annenoel.occhialino@eeoc.gov STATEMENT REGARDING ORAL ARGUMENT The Commission believes that oral argument would significantly aid this Court in making its decision in this case because of the complex nature of the issues presented. CERTIFICATE OF COMPLIANCE This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii), it contains 4,843 words, as counted by Microsoft Word 2003. 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 in Times New Roman 14 point. s/ Anne Noel Occhialino Attorney U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, N.W., Room 7030 Washington, DC 20507 (202) 663-4724 Annenoel.occhialino@eeoc.gov Dated: July 7, 2006 CERTIFICATE OF SERVICE I hereby certify that two copies of this brief were served today by mailing them first class, postage prepaid, to the following counsel of record: K. Preston Oade Jr. Michael J. Hofmann Holem Roberts & Owen LLP 1700 Lincoln St., Ste. 4100 Denver, CO 80203 Preston.oade@hr.com Michael.Hofmann@hro.com Elwyn F. Schaefer, Esq. Andrea J. Kershner Elwyn F. Schaefer & Associates, P.C. 600 17th St., Ste. 2005-S Denver, CO 80202 efschaefer@qwest.net s/ Anne Noel Occhialino Attorney U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, N.W., Room 7030 Washington, DC 20507 202-663-4724 Annenoel.occhialino@eeoc.gov July 7, 2006 CERTIFICATE OF DIGITAL SERVICE I hereby certify that: 1) on July 7, 2006, this brief was submitted in digital form to the Tenth Circuit clerk's office at esubmission@ca10.uscourts.gov and to the counsel listed below at their electronic addresses: 2) all required redactions have been made to this brief and that this document, submitted in digital form, is an exact copy of the written document being filed with the Court; and 3) this digital submission has been scanned for viruses with the most recent version of a commercial virus scanning program, Symantec AntiVirus Corporate Edition, updated July 2006. K. Preston Oade Jr. Michael J. Hofmann Holem Roberts & Owen LLP 1700 Lincoln St., Ste. 4100 Denver, CO 80203 Preston.oade@hr.com Michael.Hofmann@hro.com Elwyn F. Schaefer, Esq. Andrea J. Kershner Elwyn F. Schaefer & Associates, P.C. 600 17th St., Ste. 2005-S Denver, CO 80202 efschaefer@qwest.net s/ Anne Noel Occhialino Attorney U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, N.W., Room 7030 Washington, DC 20507 202-663-4724 Annenoel.occhialino@eeoc.gov ************************************************************************** <> <1> "DA" refers to Dillard's Appendix. <2> "Doc." refers to the district court docket. <3> The Commission acknowledges that some of the statements it made below may have inadvertently invited the district court's erroneous reading of Waffle House. <4> Dillard's has wisely never argued that the Commission's litigation should be stayed pending the outcome of Wolff's arbitration. Such an outcome would conflict with the Commission's statutory duty to enforce Title VII and to litigate its enforcement actions in federal court. Such a finding would also undermine the principle animating the Supreme Court's decision in EEOC v. Waffle House, to- wit, that the EEOC is "master of its own case." <5> Dillard's includes in its "Statement of the Facts" excerpts from the Solicitor General's brief in EEOC v. Waffle House, suggesting that these statements preclude the Commission from asserting that a district court could stay enforcement of an arbitration agreement pending litigation. Br. at 4-6, 26. A district court's ability to stay enforcement of an intervenor's arbitration agreement pending litigation was not, however, at issue in Waffle House. Passing statements in a brief on an issue not presented or to be ruled on by the court can hardly be deemed binding in the sense that an agency is precluded from subsequently clarifying its analysis in a case where the issue is clearly presented for resolution. This is particularly true where, as here, the issues are novel and complex. See Avoyelles Sportsmen's League v. Marsh, 786 F.2d 631, 637 n.9 (5th Cir. 1986) ("The federal agencies also changed their positions on a number of questions during the course of the litigation, but these changes appear to have involved the kinds of adjustments that an administrative agency normally and properly makes in the course of applying its expertise to complex factual situations."). Moreover, although Dillard's suggests that the Solicitor General properly stated in the Waffle House brief that employees who sign arbitration agreements "have agreed . . . to forego their statutory right to intervene in a judicial action brought by the EEOC," Br. at 6, 26, even Dillard's seems to acknowledge that this statement plainly conflicts with Section 706 of Title VII, which gives a charging party "the right to intervene." See 42 U.S.C. § 2000e-5(f)(1)(emphasis added). Dillard's did not object below to the magistrate judge's order overruling its objections to Wolff's intervention, DA121 at n.2, suggesting that Dillard's understood that regardless of whether Wolff is compelled to arbitrate her claim, she at least had the statutory right to intervene. For the reasons set forth in this brief, the Commission also contends that the policies underlying the FAA will still be vindicated by staying arbitration pending litigation because any claims an intervenor has left and seeks to pursue after the resolution of the EEOC's claim will be sent to arbitration.