Nos. 00-57222 & 01-55321 UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellee/Cross-Appellant, v. LUCE, FORWARD, HAMILTON & SCRIPPS LLP, Defendant-Appellant/Cross-Appellee. ______________________________________________ On Appeal from the United States District Court for the Central District of California The Honorable Florence-Marie Cooper No. CV-00-01322-FMC ______________________________________________ BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION IN OPPOSITION TO REHEARING EN BANC ______________________________________________ NICHOLAS M. INZEO Acting Deputy General Counsel EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, N.W. Washington, D.C. 20507 (202)663-4734 TABLE OF CONTENTS TABLE OF CONTENTS i TABLE OF AUTHORITIES ii STATEMENT OF THE CASE 1 PANEL DECISION 4 ARGUMENT 5 REHEARING EN BANC IS NOT WARRANTED CONCLUSION 7 STATEMENT OF RELATED CASES RULE 32(a)(7)(C) CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE TABLE OF AUTHORITIES CASES Circuit City v. Adams, 532 U.S. 105 (2001) 5 Duffield v. Robertson Stephens & Co., 144 F.3d 1182 (9th Cir.), cert. denied, 525 U.S. 982 (1998) 2, 3, 4, 5 EEOC v. Luce, Forward, Hamilton, & Scripps, 303 F.3d 994 (9th Cir. 2002) passim Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) 5, 6 Weeks v. Harden, 291 F.3d 1307 (11th Cir. 2002) 6 STATUTES Federal Arbitration Act, 9 USC 2 3 Equal Pay Act, 29 USC 215(a)(3) 2 Age Discrimination in Employment Act, 29 USC 623(d) 2 Civil Rights Act of 1991, 42 USC 1981 note 5 Title VII of the 1964 Civil Rights Act, 42 USC 2000e-3(a) 2 Americans With Disabilities Act of 1990, 42 USC 12203 2 42 USC 12212 5 RULES Fed. R. App. P. 35(b) 1, 6, 7 INTRODUCTION By order dated November 4, 2002, this Court directed the parties to file briefs "setting forth their respective positions on whether this case should be reheard en banc." The Equal Employment Opportunity Commission does not believe this case meets the standards that govern rehearing en banc. See Fed. R. App. P. 35(b). STATEMENT OF THE CASE In September 1997, Donald Lagatree applied to Luce, Forward, Hamilton & Scripps (Luce Forward), a law firm, for an opening as a legal secretary. See EEOC v. Luce, Forward, Hamilton, & Scripps, 303 F.3d 994, 997-98 (9th Cir. 2002). Luce Forward offered him the job. On his first day of work, the firm gave Lagatree a letter which confirmed his job offer and detailed the terms and conditions of his employment. The letter included an arbitration provision that required Lagatree to waive his right to judicial resolution of any employment-related claims against the firm. Id. at 997. Lagatree specifically objected to the arbitration clause, and asked whether the firm "could strike" that provision from the offer letter. Id. at 997-98. Luce Forward refused and told Lagatree the arbitration agreement was "a non-negotiable condition of employment," and that he could not remain at the firm unless he signed the waiver. Id. at 998. Two days later, Lagatree told Luce Forward that he could not sign the offer letter because he thought the arbitration clause was "unfair." When asked to elaborate during his deposition, Lagatree explained that he opposed the arbitration agreement "because he believed he needed to keep in place his 'civil liberties, including the right to a jury trial and redress of grievances through the government process.'" Id. at 997-98. Luce Forward withdrew its job offer and terminated Lagatree's conditional employment solely because he refused to sign the arbitration agreement. Id. at 998. The EEOC sued Luce Forward for retaliation in violation of Title VII, 42 USC 2000e-3(a), the ADA, 42 USC 12203, the Age Discrimination in Employment Act (ADEA), 29 USC 623(d), and the Equal Pay Act (EPA), 29 USC 215(a)(3). See 303 F.3d at 997. The EEOC claimed Luce Forward retaliated by refusing to employ Lagatree solely because he would not give up his right to participate in statutory proceedings for judicial redress under the federal civil rights laws. On cross-motions for summary judgment, the district court did not rule on the EEOC's retaliation theory of liability. Id. at 998. Rather, the court held that this Circuit's decision in Duffield v. Robertson Stephens, 144 F.3d 1182 (9th Cir.), cert. denied, 525 U.S. 982 (1998), "required ... an injunction prohibiting [Luce Forward] from requiring its employees to agree to arbitration of their Title VII claims as a condition of employment and from attempting to enforce any such previously executed agreements." See id. at 998. Luce Forward appealed and filed a petition for initial hearing en banc, urging this Court to reconsider its decision in Duffield in light of conflicting precedent from other state and federal appellate courts. At the Court's direction, the EEOC filed a response. In opposing initial en banc review, the EEOC maintained that the factual basis and legal support for its retaliation claim distinguish this case from Duffield and the other cases cited in Luce Forward's petition. The issue decided in Duffield was whether an employee who had agreed to arbitrate employment-related disputes could be held to that agreement and compelled, pursuant to the Federal Arbitration Act (FAA), to arbitrate her Title VII claim. By contrast, the factual basis for the EEOC's retaliation claim against Luce Forward was the adverse treatment of Lagatree because he refused to sign an agreement waiving his federal statutory rights to take his discrimination claims to court. The EEOC explained that its theory of liability in this case depended entirely on the text, purpose, and judicial construction of the statutory anti-retaliation provisions, which were never cited or considered in Duffield or any of the conflicting cases. Given the distinct factual basis and independent legal authority supporting its retaliation claim, the EEOC maintained that this case did not present an occasion to reconsider or overturn Duffield and urged this Court to deny Luce Forward's request for initial hearing en banc. This Court declined to grant initial en banc review. PANEL DECISION A divided panel of this Court vacated the judgment and injunction in favor of the EEOC and remanded to the district court to enter judgment for Luce Forward. 303 F.3d at 1008. The panel majority concluded that the Supreme Court in Circuit City had "implicitly overruled Duffield," and held that "employers may require employees to sign agreements to arbitrate Title VII claims as a condition of their employment." Id. at 997. The panel further held that "Lagatree did not engage in a protected activity when he refused to sign the Luce Forward arbitration agreement, and consequently, Luce Forward did not retaliate by refusing to hire him." Id. In rejecting the EEOC's retaliation claim, the panel ruled that "Lagatree could not have reasonably believed Luce Forward was engaged in unlawful activity when it required arbitration as a condition of employment." Id. at 1006. The panel based this determination on "voluminous ... legal precedent" holding that an agreement to arbitrate federal statutory discrimination claims is enforceable pursuant to the FAA, regardless of whether the arbitration agreement was signed as a condition of employment. Id. at 1005-06. Judge Pregerson dissented from the majority's ruling that Circuit City had "implicitly overruled" Duffield. See id. at 1009. ARGUMENT REHEARING EN BANC IS NOT WARRANTED The Commission does not believe the Court should rehear the panel's decision addressing the continued viability of this Court's prior decision in Duffield. The Supreme Court "has been quite specific in holding that arbitration agreements can be enforced under the FAA without contravening the policies of congressional enactments giving employees specific protection against discrimination prohibited by federal law." Circuit City Stores v. Adams, 532 U.S. 105,122-123 (2001). The Court in Gilmer v. Interstate/Johnson Lane, 500 U.S. 20, 23 (1991), ruled that an arbitration agreement signed as a condition of employment could be enforced under the FAA to compel an employee to arbitrate ADEA claims. Congress has "encouraged" alternative means of dispute resolution to resolve employment discrimination claims, see 42 USC 1981 note; 42 USC 12212, and the Supreme Court has approved "the real benefits to the enforcement of arbitration provisions," Circuit City, 532 U.S. at 122-23, in which a party agrees to "trade[] the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration." Gilmer, 500 U.S. at 31 (internal quotation omitted). These decisions make it clear that the panel majority's decision does not conflict with Supreme Court precedent, and that rehearing en banc is not warranted under the standard of Fed. R. App. P. 35(b)(1)(A). The EEOC advanced a theory in this case that the anti-retaliation provisions of the federal civil rights laws prohibit an employer from discriminating against an applicant or employee who explicitly refuses to waive his statutory rights to seek judicial redress for discrimination. A divided panel ruled that an employer may lawfully refuse to employ an individual who opposes a compulsory waiver of his federal statutory rights to take his discrimination claims to court. The issue that divided the panel was not the Commission's retaliation theory, but only the question of the continued viability of Duffield. See id. at 1009 (Pregerson, J., dissenting from the panel decision that Circuit City had "implicitly overruled" Duffield). At the time the EEOC briefed and argued this appeal, no federal appellate court had yet decided a retaliation claim arising from the refusal of an employee or applicant to sign a compulsory arbitration agreement. Following oral argument, the Eleventh Circuit in Weeks v. Harden, 291 F.3d 1307 (11th Cir. 2002) rejected a retaliation claim brought by employees who were fired when they refused to sign a compulsory arbitration provision. Because the only other court of appeals to consider a retaliation claim grounded in an individual's refusal to submit to compulsory arbitration has rejected that claim, the panel majority's decision in this case does not meet the standard for rehearing en banc set out in Fed. R. App. P. 35(b)(1)(B). CONCLUSION Because the panel majority's decision does not conflict with Supreme Court precedent or the decision of any other court of appeals, the Commission does not believe that rehearing en banc is warranted. Respectfully submitted, _________________________ NICHOLAS M. INZEO Acting Deputy General Counsel Equal Employment Opportunity Commission Office of General Counsel 1801 L Street, N.W. Washington, D.C. 20507 (202)663-4683 STATEMENT OF RELATED CASES Counsel is unaware of any related cases pending in this Court. See Circuit Rule 28-2.6. RULE 32(a)(7)(C) CERTIFICATE OF COMPLIANCE I certify that this response contains fewer than 15 pages. The brief was prepared is the WordPerfect 8 word-processing system, using 14-point proportionally spaced type. ________________________ Nicholas M. Inzeo Acting Deputy General Counsel November 22, 2002 CERTIFICATE OF SERVICE I, Nicholas M. Inzeo, hereby certify that I served two copies of the foregoing Response this 22nd day of November, 2002, by first- class mail, postage pre-paid, to the following counsel of record: Charles A. Bird Michael L. Jensen Kelly Capen Douglas Luce, Forward, Hamilton & Scripps LLP 600 West Broadway, Suite 2600 San Diego, California 92101-3391 Robert F. Walker Paul Hastings Janofsky & Walker LLP 555 South Flower Street, 23rd Floor Los Angeles, California 90071-2300 __________________________ Nicholas M. Inzeo Acting Deputy General Counsel 1 Because the district court's injunction was by its terms limited to Title VII claims, the EEOC cross-appealed to preserve its claim for an injunction to enjoin Luce Forward from retaliating against an applicant or employee who refuses to waive his statutory rights under the ADA, the ADEA, and the EPA, to file suit and litigate discrimination claims in court. 2 The FAA generally requires that "[a] written provision in ... a contract ... to settle by arbitration a controversy thereafter arising out of such contract ... or an agreement in writing to submit to arbitration an existing controversy arising out of such a 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 USC §2. 3 Section 118 of the 1991 Civil Rights Act, which amended Title VII, the ADA, and the ADEA, provides: "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." 42 USC §1981 note. The ADA contains a virtually identical provision. See 42 USC §12212.