And Then There Were None

By now, the story is familiar. A three-judge panel in Duffield vs. Robertson Stephens & Co., 144 F.3d 1182 (9th Cir. 1998) ruled that the Civil Rights Act of 1991 precluded employers from making arbitration a condition of employment. The Ninth Circuit stood alone among the circuits on this point as every other circuit had ruled otherwise. Last year, another Ninth Circuit panel ruled that Duffield had been implicitly overruled by the Supreme Court's decision in Circuit City Stores, Inc., v. Adams, 532 U.S. 105 (2001). EEOC v. Luce Forward Hamilton & Scripts, 303 F.3d 994, 997 (9th Cir. 2002). Now, the full Ninth Circuit rejects that Panel's findings regarding the applicability of Circuit City, but nonetheless overturns Duffield as being “wrongly decided.” In doing so, the full court relied heavily on Gilmer v. Interstate/Johnson Lane Corp. 500 U.S. 20 (1991), and the fact that the Civil Rights Act of 1991 expressly encourages arbitration where appropriate and to the extent authorized by law. The full Ninth Circuit reasoned, “it would be ironic to interpret statutory language encouraging the use of arbitration and containing no prohibitory language as evincing Congress” intent to preclude arbitration of Title VII claims.” Perhaps most surprising, the full court voted 8 to 3 to overturn Duffield, although there was a strong dissent supporting the continued validity of the original Duffield decision.

The fact that all circuits have now endorsed mandatory arbitration in the employment context does not mean that the legal challenges to arbitration will cease in the future. Quite to the contrary, a substantial number of open issues remain and will be subject of litigation for years to come. These issues, however, issues such as the knowing and voluntary nature of the decision to submit EEO claims to arbitration, center not on Congressional intent but rather on due process.

The Ninth Circuit Court of Appeals, like the state in which its San Francisco courthouse sits, has a mind of its own. Its contrariness, however, has also made it perennially the circuit court that the United States Supreme Court loves to overturn most. On the highly combustible topic of arbitration of statutory claims, however, the full Ninth Circuit beat the Supreme Court to the punch and overruled itself by holding that employers may require the arbitration of statutory claims. EEOC v. Luce Forward Hamilton & Scripts, 2003 WL 22251382 (9th Cir. 9/30/03) (en banc)