Labor and Mandatory Arbitration Agreements: Background and Discussion

Report for Congress
Labor and Mandatory Arbitration Agreements:
Background and Discussion
Updated June 17, 2002
Jon O. Shimabukuro
Legislative Attorney
American Law Division


Congressional Research Service ˜ The Library of Congress

Labor and Mandatory Arbitration Agreements:
Background and Discussion
Summary
In response to the rising number of discrimination claims brought under federal
civil rights statutes, many employers have sought to require arbitration for statutory
claims by having their employees sign mandatory arbitration agreements. These
agreements provide generally that all claims arising out of one's employment will be
heard by an arbitrator or panel of arbitrators rather than by a judge or jury.
Arbitration is often perceived by employers as a faster and less expensive alternative
to litigation. Arbitration agreements also appear in the context of organized labor as
unions and employers negotiate for mandatory arbitration in collective bargaining
agreements.
The U.S. Supreme Court's decision in Wright v. Universal Maritime Service
Corp. is the Court's most recent attempt to explain when a mandatory arbitration
agreement will be enforced to require arbitration of a statutory claim. Although the
Court found that an arbitration agreement will not be enforced when it does not
explicitly require arbitration for statutory claims and when there has not been a "clear
and unmistakable" waiver of a judicial forum for such claims, the Court resisted any
further discussion about a union's ability to waive a judicial forum for employees.
While the Court recognized the tension between two lines of case law that have
developed since two previous Supreme Court cases were decided, it chose to decide
Wright solely on the basis of its facts. Thus, the question remaining after Wright is
likely to go unanswered until the Court agrees to review a case with more appropriate
facts or Congress chooses to legislate in this area.
Because the Civil Rights Act of 1964, the Age Discrimination in Employment
Act, and the Americans with Disabilities Act each provide for judicial relief, some
contend that mandatory arbitration agreements undermine the intent of Congress. In
addition, others argue that mandatory arbitration agreements support an employer's
superior bargaining position as employees are forced to sign such agreements in order
to obtain employment. For these reasons, the enforceability of mandatory arbitration
agreements is likely to be of interest to Congress.



Contents
Background ..................................................2
Circuit Court Cases............................................3
Wright v. Universal Maritime Service Corp..........................7
Legislative Action............................................10



Labor and Mandatory Arbitration
Agreements: Background and Discussion
In response to the rising number of discrimination claims brought under federal
civil rights statutes, many employers have sought to require arbitration for statutory
claims by having their employees sign mandatory arbitration agreements. These
agreements provide generally that all claims arising out of one's employment will be
heard by an arbitrator or panel of arbitrators rather than by a judge or jury.
Arbitration is often perceived by employers as a faster and less expensive alternative
to litigation. Arbitration agreements also appear in the context of organized labor as
unions and employers negotiate for mandatory arbitration in collective bargaining
agreements.
The Civil Rights Act of 1991 encourages arbitration for claims brought under
the Americans with Disabilities Act (ADA), the Age Discrimination in Employment
Act (ADEA), and Title VII of the Civil Rights Act of 1964 (Title VII).1 In addition,
Section 513 of the ADA encourages arbitration "[w]here appropriate and to the extent
authorized by law."2
The U.S. Supreme Court's decision in Wright v. Universal Maritime Service
Corp. attempts to clarify what is needed to enforce a mandatory arbitration clause in
a collective bargaining agreement.3 Although Wright provides some guidance for
determining when such an agreement will be enforced, it is still uncertain whether
a union may actually bargain on behalf of employees for the mandatory arbitration
of statutory claims.
Prior to its decision in Wright, the Court considered the enforceability of
mandatory arbitration agreements in two other cases, Alexander v. Gardner-Denver
and Gilmer v. Interstate/Johnson Lane Corp.4 This report discusses the Court's
mandatory arbitration cases, as well as the varying decisions of the U.S. circuit courts
of appeals that have interpreted the Court’s opinions. In addition, the report reviews
legislative attempts to amend federal civil rights statutes to preclude compulsory
arbitration agreements.5


142 U.S.C. § 1981 note (1994), Pub. L. 102-166, § 118.
242 U.S.C. § 12212 (1994).
3Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998).
4415 U.S. 36 (1974); 500 U.S. 20 (1990).
5See S. 121, 106th Cong. (1999); H.R. 872, 106th Cong. (1999). The Civil Rights Procedures
Protection Act of 1999 was introduced to amend Title VII of the Civil Rights Act of 1964
(42 U.S.C. § 2000e et seq.), the Age Discrimination in Employment Act (29 U.S.C. § 621
(continued...)

Background
The Supreme Court's decisions in Gardner-Denver and Gilmer have produced
two approaches toward mandatory arbitration agreements. The first approach,
typified by Gardner-Denver, recognizes an unwaivable right to a judicial forum for
statutory claims. In Gardner-Denver, a black employee sought relief under Title VII
after he was terminated. Although the plaintiff, Mr. Alexander, was told that he was
discharged for his poor job performance, he alleged that his termination was racially
motivated. Alexander filed a grievance in accordance with the collective bargaining
agreement between his union and the company. The agreement contained a broad
arbitration clause covering "any trouble arising in the plant."6 After receiving an
adverse judgement in arbitration, Alexander sought relief in federal court. However,
the district court dismissed the action and found that Alexander was bound by the
arbitral decision.7 The court stated that because Alexander elected voluntarily to
pursue his grievance to final arbitration under the agreement, he was precluded from
suing his employer under Title VII. The Tenth Circuit affirmed the ruling of the
district court, but the Supreme Court reversed that decision.
After reviewing the purpose and procedures of Title VII, the Court concluded
that an individual does not forfeit his private cause of action even if he first pursues
his grievance to final arbitration under a collective bargaining agreement.8 The
Court recognized that "legislative enactments in this area" have evinced a general
interest in providing parallel or overlapping remedies against discrimination.9 Thus,
it was not inappropriate for Alexander to seek relief through arbitration and then in
court. In addition, the Court distinguished contractual rights under a collective
bargaining agreement from statutory rights that are created by Title VII and other
federal statutes. While the Court acknowledged that some statutory rights, like the
right to strike, can be waived by a union, other statutory rights like those granted
under Title VII cannot be waived prospectively: "Title VII. . . stands on plainly
different ground; it concerns not majoritarian processes, but an individual's right to
equal employment opportunities."10 The Court further stated that the rights conferred
by Title VII cannot form any part of the collective bargaining process because waiver
of those rights would defeat the congressional purpose behind Title VII.11


5 (...continued)
et seq.), the Rehabilitation Act (29 U.S.C. § 701 et seq.), the Americans with Disabilities
Act (42 U.S.C. § 12101 et seq.), § 1977 of the Revised Statutes (42 U.S.C. § 1981), the
Equal Pay Act (29 U.S.C. § 206d), and the Family and Medical Leave Act (29 U.S.C. § 2601
et seq.).
6415 U.S., at 40.
7Alexander v. Gardner-Denver, 346 F. Supp. 1012 (D. Colo. 1971).
8415 U.S., at 49
9415 U.S., at 47.
10415 U.S. at 51.
11Id.

The second approach toward mandatory arbitration agreements has its origin in
Gilmer. This approach recognizes arbitration as a suitable method of obtaining relief
for statutory claims even when the language in a mandatory arbitration agreement is
broad and does not specify arbitration for such claims. In Gilmer, an employer
sought to compel arbitration of a terminated employee's claim under the ADEA. As
a securities representative, Gilmer was required to register with several stock
exchanges, including the New York Stock Exchange (NYSE). Consequently, Gilmer
became bound by the rules of the NYSE. One NYSE rule requires securities
employees to arbitrate any controversy arising out of a registered representative's
employment or termination of employment.12 The rule makes no specific reference
to the ADEA or any other federal anti-discrimination statute. Nevertheless, the Court
concluded that Gilmer's claim could be subject to compulsory arbitration.
Where the Court previously recognized a congressional interest in providing
parallel remedies against discrimination in Gardner-Denver, the Court in Gilmer
contended that such remedies evinced merely a "flexible approach to resolution of
claims."13 Rather than providing for both arbitration and judicial relief, this flexible
approach permitted arbitration to be a suitable remedy on its own. The Court
reasoned that Congress would have explicitly precluded arbitration in the ADEA had
it not wanted arbitration to be an appropriate method of attaining relief. In addition,
the Court offered three distinctions between Gilmer and Gardner-Denver. First, the
Court stated that the two cases presented different issues. While Gardner-Denver
was concerned with whether the arbitration of contractual claims precluded
subsequent judicial review of statutory claims, Gilmer offered a situation where
contractual and statutory claims could both be subject to arbitration under the NYSE
rule. Second, Gilmer did not involve a collective bargaining agreement that was
enforced by a union. Thus, there was no "tension between collective representation
and individual statutory rights."14 Presumably, Gilmer understood that he was
agreeing to arbitrate all of his claims when he completed the registration application.
Third, the agreement in Gilmer was subject to the Federal Arbitration Act of 1947
(FAA).15 The Court noted that the FAA reflects a federal policy favoring arbitration
agreements. In contrast, the Court found previously that the collective bargaining
agreement in Gardner-Denver was not subject to the FAA.
Circuit Court Cases
Despite the two Supreme Court cases, the courts of appeals have differed in
their recognition of mandatory arbitration agreements. In general, they have chosen
to follow either Gardner-Denver or Gilmer. Further, the courts of appeals have
considered the issue in reference to the ADA, as well as Title VII and the ADEA.
In Pryner v. Tractor Supply Co., the Seventh Circuit held that a mandatory
arbitration clause in a collective bargaining agreement was not enforceable against


12500 U.S., at 23.
13500 U.S., at 29.
14500 U.S., at 35.
159 U.S.C. § 1 et seq. (1994).

two employees alleging violations of Title VII, the ADA, and the ADEA.16 Although
the court contended that a worker's statutory rights could be arbitrable if the worker
consented to having such rights arbitrated, it found that a union could not consent for
the employee by signing a collective bargaining agreement that left the enforcement
of statutory rights to the union-controlled grievance and arbitration system created
by the agreement. The court feared that a union may not pursue an employee's claim
as vigorously as the employee in a private action. In addition, the court believed that
the union may decline to prosecute a claim for strategic reasons; that is, the union
may avoid pursuing a claim because it wanted to maintain a cordial relationship with
the employer.17 Although the court was reluctant to favor either Gardner-Denver or
Gilmer, it did find Pryner's case to be closer to Gardner-Denver. Further, the court
expressed its belief in maintaining a plaintiff's right to sue.18
In Varner v. National Super Markets, Inc., the Eighth Circuit held that an
employee did not have to exhaust the grievance procedures in a collective bargaining
agreement before filing a Title VII lawsuit.19 Although Varner did not participate in
any part of the grievance and arbitration procedures under the collective bargaining
agreement, the court contended that exhaustion of these procedures was not necessary
to file suit. Following Gardner-Denver, the court reasoned that if a plaintiff was
permitted to file suit after binding arbitration, she should be permitted to file suit
even if she chooses not to participate in the grievance process.
In Harrison v. Eddy Potash, Inc., the Tenth Circuit found similarly that a Title
VII claimant did not have to exhaust the grievance procedures in a collective
bargaining agreement.20 In rejecting the employer's claim of mandatory arbitration,
the court focused on the context in which the arbitration clause arose. The Court
distinguished arbitration clauses contained in collective bargaining agreements from
those in individual contracts. While an individual contract contains terms that were
agreed upon by the employee, a collective bargaining agreement binds an employee
to terms negotiated by the union. Thus, an employee governed by an individual
contract would have understood that her statutory claims were subject to arbitration.
Alternatively, an employee governed by a collective bargaining agreement would
probably not have the same understanding. Further, the court recognized that the
collective bargaining agreement was not subject to the FAA. Section 1 of the FAA
excludes employment contracts of seamen, railroad employees, and other workers
engaged in foreign or interstate commerce from its reach.21 The Tenth Circuit has


16103 F.3d 354 (7th Cir. 1997).
17Id., at 362.
18103 F.3d, at 365.
1994 F.3d 1209 (8th Cir. 1996).
20112 F.3d 1437 (10th Cir. 1997).
219 U.S.C. § 1 (1994).

stated that § 1's exclusion encompasses collective bargaining agreements.22 Thus, the
FAA provided no support for arbitration.23
In Brisentine v. Stone & Webster Engineering Corporation, the Eleventh Circuit
found that a mandatory arbitration clause would not bar litigation of a statutory claim
unless three requirements were met.24 First, the employee must have agreed to
arbitration in an individual contract; that is, the arbitration clause cannot be part of
a collective bargaining agreement. Second, the mandatory arbitration agreement
must authorize the arbitration of statutory claims, as well as contractual claims.
Third, the agreement must give the employee the right to insist on arbitration. Thus,
arbitration cannot be left to the union's sole discretion.
Brisentine alleged that Stone & Webster denied him employment because he
was unable to engage in heavy lifting or repetitive bending. Brisentine had been
previously injured when he fell from a scaffold. Although Brisentine had not been
hired by Stone & Webster, he became a probationary employee subject to the
collective bargaining agreement between Brisentine's union and Stone & Webster
when he was referred for employment. The collective bargaining agreement
contained a provision that prohibited discrimination on the basis of race, sex, national
origin, age, and handicap. In addition, the agreement provided a grievance and
arbitration procedure for unfavorable resolutions. After being told by a labor
relations manager at Stone & Webster that he was denied employment because of his
disabilities, Brisentine contacted the union to inquire about filing a grievance in
accordance with the agreement. However, the union told Brisentine that he should
file a complaint with the Equal Employment Opportunity Commission (EEOC) rather
than pursue his claim through the grievance procedures because his dispute centered
around his disabilities. After receiving a right to sue letter, Brisentine filed a lawsuit
alleging a violation of the ADA. The district court dismissed the case on the basis
of Brisentine's failure to exhaust the agreement's grievance procedures.
After reviewing the agreement, the Eleventh Circuit concluded that the three
requirements for barring litigation were not met. First, the grievance and arbitration
clause was part of a collective bargaining agreement. Second, although the
agreement included nondiscrimination language, it made no explicit reference to
statutory claims. Further, while Brisentine did have the option of seeking arbitration,
he was told by the union to pursue his claim with the EEOC. Thus, the third
requirement was met, but was not enforced.
While the Seventh, Eighth, Tenth, and Eleventh Circuits have followed
Gardner-Denver, other circuits have followed Gilmer and construed arbitration


22United Food & Commercial Workers, Local Union No. 7R v. Safeway Stores, Inc., 889
F.2d 940 (10th Cir. 1989).
23It is still unclear whether all collective bargaining agreements are excluded from the FAA's
purview. Although the Tenth Circuit has found the FAA not to be applicable to collective
bargaining agreements, the Seventh Circuit has recognized such applicability. The Fourth
Circuit also does not recognize the FAA as being applicable to collective bargaining
agreements.
24117 F.3d 519 (11th Cir. 1997).

agreements to require the arbitration of statutory claims. Among the circuits that
have followed Gilmer, arbitration has been considered in the context of the securities
industry.
In Seus v. John Nuveen & Co., Inc., the Third Circuit upheld the validity of an
arbitration clause that required Seus, a former broker, to arbitrate "any dispute, claim
or controversy that may arise between [Seus] and [her] firm."25 The arbitration clause
appeared in a registration application that Seus was required to complete as a part of
her employment. The application, the Uniform Application for Securities Industry
Registration or Transfer, commonly referred to as Form U-4, was the same
application at issue in Gilmer. Following Gilmer, the court noted that Form U-4 was
among the contracts to be governed by the FAA. The court stated that the
registration application was a "contract evidencing a transaction in commerce" rather
than one of the contracts excluded from the scope of the Act.26 Thus, the FAA on its
face authorized the enforcement of Form U-4's arbitration clause. Further, the court
rejected Seus's argument that she did not act knowingly or voluntarily when she
completed the application. Because Seus could not show fraud, duress, mistake, or
some other ground for invalidating the agreement, the court was compelled to require
arbitration for her Title VII and ADEA claims.
In Willis v. Dean Witter Reynolds, Inc., the Sixth Circuit upheld similarly the
validity of Form U-4's arbitration clause.27 Willis, an account executive, was
required to complete Form U-4 as part of her employment. Willis alleged that during
the last two years of her employment at Dean Witter, she was subject to a hostile
work environment and was forced to resign because of her sex. The court maintained
that Form U-4 was a contract "evidencing a transaction involving commerce" rather
than a contract of employment that would be excluded from the FAA's purview.
Thus, the FAA could require arbitration for Willis's Title VII claim.
In Prudential Insurance Co. Of America v. Lai, the Ninth Circuit held that the
arbitration clause in Form U-4 was not enforceable against two former sales
representatives because they were unaware of the clause at the time they signed the
registration application.28 The former employees argued that at the time they
completed Form U-4 they were told by Prudential that they were simply applying to
take a test that was required for employment. The former employees were never
given an opportunity to read Form U-4 and were not given an employment manual
that contained the actual arbitration terms. Although the court found that the former
employees' Title VII claims were not subject to mandatory arbitration, it did state that
statutory claims could be arbitrable if an employee knowingly agrees to submit her
claims to arbitration.


25146 F.3d 175, 177 (3d Cir. 1998).
26146 F.3d, at 178.
27948 F.2d 305 (6th Cir. 1991).
2842 F.3d 1299 (9th Cir. 1994).

The Ninth Circuit revisited Form U-4's arbitration clause in Duffield v.
Robertson Stephens & Co..29 Duffield alleged sexual discrimination and sexual
harassment in violation of Title VII. Robertson Stephens contended that Duffield
was required under Form U-4 to arbitrate her claim. Acknowledging its decision in
Lai, the court perceived the issue in Duffield to be of greater complexity; that is,
whether a mandatory arbitration provision that precludes judicial relief for statutory
claims is enforceable when it is a condition of employment. In reaching its
conclusion, the court considered the legislative history of the Civil Rights Act of
1991 (CRA). The CRA was enacted almost simultaneously with Gilmer and spoke
directly to the arbitration of Title VII claims.30 The CRA provides that arbitration
and other forms of alternative dispute resolution are encouraged "[w]here appropriate
and to the extent authorized by law."31 After reviewing numerous congressional
reports, the court discovered that Congress specifically rejected a proposal that would
have allowed employers to enforce mandatory arbitration agreements.32 Further, the
court interpreted the language of the CRA to mean that arbitration and alternative
dispute resolution were appropriate only when they afforded victims of
discrimination an opportunity to present their claims in a desirable alternative
forum.33 The language in the CRA was not meant to force an unwanted forum on
cl ai m ant s.34
One week before issuing its decision in Wright, the Supreme Court denied an
appeal by Robertson Stephens. The Court made its decision without comment or
dissent. Although Duffield had argued against the appeal on numerous grounds, she
emphasized changes in the securities industry that would no longer require arbitration
for statutory claims of discrimination. For example, the National Association of
Securities Dealers (NASD) has already amended its rules to eliminate the mandatory
arbitration requirement.
Wright v. Universal Maritime Service Corp.
The Supreme Court's decision in Wright indicated that statutory claims would
not be presumed to be arbitrable absent explicit language in an arbitration agreement.
Because the arbitration clause in Wright was so vague, the Court concluded that it
could decide against enforcing the clause without resolving the question of whether
the union could have waived judicial relief for the employee's ADA claim.
Wright had been employed as a longshoreman in the Port of Charleston since

1970. In 1992, Wright shattered his right heel and injured his back when he fell from


29144 F.3d 1182 (9th Cir. 1998).
30Id., at 1189.
31Civil Rights Act of 1991, supra note 1.
32144 F.3d, at 1196. See also H.R. Rep. No. 40(I), at 104 (1991) (Use of compulsory
arbitration provisions would force American workers to choose between their jobs and their
civil rights).
33144 F.3d, at 1194.
34Id.

the top of a freight container. These injuries prevented Wright from engaging in any
type of waterfront employment for an extended period. In May, 1994, Wright settled
a workers' compensation claim and other claims for permanent and total disability.
As part of this settlement, Wright received $250,000.
Wright had been a member of Local 1422 of the International Longshoremen's
Association, AFL-CIO since the beginning of his employment. After his physical
condition improved dramatically in July, 1994, Wright obtained permission from his
physician to return to work. In January, 1995, Wright returned to the hiring hall of
Local 1422 to obtain employment. He presented himself as having no restrictions
and needing no accommodation. Between January 2, 1995 and January 11, 1995,
Wright was referred by Local 1422 to work for several stevedoring companies,
including respondents Universal Maritime Corp., Ryan-Walsh, Inc., Strachan
Shipping Company, and Ceres Marine Terminals. Wright performed all of the duties
assigned to him. None of the respondents complained or objected to Wright's
performance. However, the respondents later informed the President of Local 1422
that they would no longer accept Wright on any work referrals from the local. In
letters to the President of Local 1422, the respondents stated in nearly identical
language that an individual is no longer qualified to perform longshore work of any
kind once he has been certified as permanently and totally disabled.35
Wright argued that the respondents violated the ADA by denying him
employment based on their perception that he was physically unable to do
stevedoring work. Wright maintained that he was able to perform the essential
elements of the jobs that would be referred to him by Local 1422.
The respondents denied any violation of the ADA and contended that Wright
failed to exhaust the remedies and procedures available to him under the collective
bargaining agreement between Local 1422 and the South Carolina Stevedores
Association (SCSA). The SCSA is the collective bargaining representative of the
respondent stevedoring companies. Clause 15(B) of the collective bargaining
agreement between Local 1422 and the SCSA provides for a three-tiered review
process for employee grievances.36 Grievances that cannot be resolved between the
local and a covered employer are submitted first to a Port Grievance Committee. If
the Committee cannot reach an agreement within a specified time, a written record
of the dispute is referred to a Joint Negotiating Committee. If this Committee is
unable to achieve a majority decision, it is directed by the agreement to employ a
professional arbitrator. Clause 15(F) of the agreement states that it is intended to
cover "all matters affecting wages, hours, and other terms and conditions of


35Brief for Petitioner at 3, Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998)
(No. 97-889).
36Joint Appendix at 43a, Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998)
(No. 97-889).

employment. . .".37 The respondents maintained that Wright's ADA claim was within
the scope of matters that must be arbitrated in accordance with the agreement.38
On January 12, 1996, the president of Local 1422 wrote to Universal Maritime
Service Corp. to express his concern over the interpretation of the agreement. A copy
of this letter was sent to the SCSA. In his letter, the president characterized the
respondents' refusal to employ Wright as a "lock-out" in violation of a separate
provision of the agreement.39 Nevertheless, the local did not file a grievance for
Wright. Instead, Wright filed a complaint with the EEOC and sought relief in federal
court after receiving a right to sue letter.
The district court dismissed Wright's claim without prejudice. Although Wright
argued that the arbitration clause should not be enforced because it failed to specify
arbitration for statutory claims, the court concluded that arbitration is appropriate
even when an agreement does not identify specific statutes or grievances.
The Fourth Circuit affirmed the district court's decision. It found that an
arbitration agreement does not need to specify every possible dispute to be binding.40
The court compared Wright's agreement to the mandatory arbitration rule in Gilmer.
Following Gilmer, the Fourth Circuit made a similar determination that an employer
does not have to provide a "laundry list of potential disputes" for them to be covered
by a mandatory arbitration clause.41
The Supreme Court reversed the decision of the Fourth Circuit. Writing for a
unanimous Court, Justice Scalia indicated that the general arbitration clause in the
agreement between Local 1422 and the SCSA did not require Wright to arbitrate his
ADA claim. The Court found that the agreement did not create a presumption of
arbitration for Wright's ADA claim; that is, the broad language of Clause 15(F) could
not support the belief that mandatory arbitration was the only option available for
resolving statutory claims.
In reaching the Court's conclusion, Justice Scalia discussed the two lines of case
law that have developed from the Court's prior decisions in Gilmer and Gardner-
Denver.42 Although the Court recognized the tension between Gilmer and Gardner-
Denver, it resisted any kind of reconciliation of the two cases. Instead, the Court
chose to respond only to the facts presented by Wright. The Court provided little


37Joint Appendix at 45a, Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998)
(No. 97-889).
38Wright was also subject to the Longshore Seniority Plan, which contained a similar
grievance provision. Because this Plan's arbitration language resembles the language in the
collective bargaining agreement, this discussion will focus mainly on the agreement.
39Wright v. Universal Maritime Service Corp., No. 2:96-0165-18AJ (D. S.C. 1996) (report
and recommendation).
40Wright v. Universal Maritime Service Corp., No. 96-2850, slip op. (4th Cir. 1997).
41Id.
42415 U.S. 36 (1974).

guidance for a situation in which an arbitration clause in a collective bargaining
agreement explicitly requires arbitration of statutory claims. In this situation, it
remains unclear whether the union may waive a judicial forum for its members.
While the Court did articulate a "clear and unmistakable waiver" standard for
determining when statutory claims could be subject to arbitration, whether the union
can agree to such a waiver on behalf of its members is a lingering question. The
Court stated simply that because the agreement did not specify arbitration for
statutory claims, there could not have been a clear and unmistakable waiver of the
covered employees' rights to a judicial forum for federal claims of employment
discrimination.43 Thus, the tension between collective representation and individual
statutory rights that was discussed in both Gardner-Denver and Gilmer remains.
Legislative Action
The enforceability of mandatory arbitration agreements could be addressed
legislatively thereby resolving the question left unanswered by Wright. The Civil
Rights Procedures Protection Act, has been introduced during every Congress since
the 103rd Congress to respond to the concerns raised by mandatory arbitration
agreements.44 In the 107th Congress, S. 163 was introduced on January 24, 2001 by
Senators Feingold, Leahy, Kennedy, and Torricelli. The House version of the Act,
H.R. 1489, was introduced on April 4, 2001 by Representative Markey and twenty-
four co-sponsors. The Act would amend seven civil rights statutes to guarantee
access to federal court for a plaintiff alleging discriminatory conduct.45 Supporters
believe that the Act would ensure against an employer using his or her superior
bargaining position to coerce prospective employees into any agreement that requires
arbitration for statutory claims.46
Three other bills that address arbitration and employment disputes have been
introduced during the 107th Congress. The Preservation of Civil Rights Protections
Act of 2001, H.R. 2282, was introduced on June 21, 2001 by Representative
Kucinich and thirty-six co-sponsors. A similar measure, S. 2435, the Preservation
of Civil Rights Protections Act of 2002, was introduced on May 1, 2002 by Senators
Kennedy and Feingold. The Acts provide that a mandatory arbitration clause in an
agreement between an employer and an employee shall not be enforceable unless the
parties consent to arbitration after a dispute has arisen.
H.R. 815, to amend Title 9 of the U.S. Code, was introduced on March 1, 2001
by Representative Andrews. H.R. 815 would add a new section to the FAA to allow


43Wright, 525 U.S. at 81-2.
44See S. 163, 107th Cong. (2001); H.R. 1489, 107th Cong. (2001); S. 121, 106th Cong. (1999);
H.R. 872, 106th Cong. (1999); S. 63, 105th Cong. (1997); H.R. 983, 105th Cong. (1997); S.ththrd

366, 104 Cong. (1995); H.R. 3748, 104 Cong. (1995); S. 2405, 103 Cong. (1994); H.R.rd


4981, 103 Cong. (1994).


45Id.
46Oversight Hearing on Mandatory Arbitration Agreements in Employee Contracts in the
Securities Industry, 105th Cong. (statement of Senator Russell Feingold),
[http://www.senate.gov/~banking/98_07hrg/072898/witness/feingold.htm] (1997).

arbitration related to an employment dispute only if arbitration is agreed to after a
dispute has arisen. An employer could not require an employee to arbitrate a dispute
as a condition of employment.
During the 105th Congress, the Senate Banking Committee conducted an
oversight hearing on mandatory arbitration agreements in the securities industry.47
While the committee was aware of the NASD's rule change, it heard testimony on the
continued need for federal legislation in the securities industry. Representative
Markey, the House sponsor of the Act, feared that the rule change would not deter
securities firms from imposing individual mandatory arbitration contracts on their
employees.48 An individual contract that requires arbitration for statutory claims may
be permissible under Gilmer and Wright. Such a contract would be analogous to the
registration application in Gilmer. Consequently, the agreement could be enforceable
pursuant to the FAA. Because the agreement would be executed between the
individual employee and the employer, there would be no tension between collective
representation and individual rights. Further, it is likely that the clear and
unmistakable waiver of judicial relief standard required by Wright would be satisfied
by such an agreement.
While the oversight hearing focused primarily on the securities industry, there
was recognition of mandatory arbitration agreements being considered in other
industries.49 Without federal legislation that guarantees judicial relief for statutory
claims, employment agreements that limit an employee to arbitration are likely to be
similarly enforceable.
In Gilmer, the Court based its decision in part on Gilmer's failure to find a
legislative intent in the ADEA to preclude the enforcement of a mandatory arbitration
agreement. Without such an indication of Congress' intent, the Court concluded that
a mandatory arbitration agreement should be enforced. Interpreting Gilmer, the
Ninth Circuit reviewed the legislative history of the CRA and concluded that
Congress believed simply that arbitration was one method of resolving a Title VII
claim. The Ninth Circuit contended that claimants should not be forced into an
unwanted forum.
While the ADA contains language that encourages the use of arbitration and
other methods of alternative dispute resolution, the legislative history of the ADA
indicates that judicial relief was not meant to be limited by a mandatory arbitration
agreement. The House Report accompanying the ADA states that "any agreement
to submit disputed issues to arbitration, whether in the context of a collective
bargaining agreement or in an employment contract, does not preclude the affected
person from seeking relief under the enforcement provisions of this Act."50 The
House Report demonstrates that there was a legislative intent to preclude the


47Oversight Hearing, supra note 46.
48Oversight Hearing, supra note 46 (statement of Representative Markey).
49Oversight Hearing, supra note 46 (statement of Patricia Ireland, President, National
Organization of Women).
50H.Rept. 101-485, 101st Cong., 2d Sess., pt. 3, at 76 (1990).

enforcement of mandatory arbitration agreements in such a manner as to exclude
resort to judicial relief. Nevertheless, an amendment of the ADA and other civil
rights statutes could resolve definitively whether such an agreement may be enforced.
Those who support arbitration maintain that it is a fast and economical
alternative to litigation. Opponents respond that arbitration denies claimants the
benefits of discovery and a written record of the proceedings. In addition, opponents
also contend that arbitrators are often not trained adequately to resolve statutory
claims. The uncertainty that remains after Wright will continue pending further case
law development or action by Congress.