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finding plaintiff's NYCHRL race and sex discrimination claims arbitrable
Summary of this case from Chen-Oster v. Goldman, Sachs & Co.Opinion
94 Civ. 9027 (CSH).
April 20, 2000.
MEMORANDUM OPINION AND ORDER
In this case, a former employee of Lehman Brothers asserts claims of race and sex-based discrimination and intentional infliction of emotional distress in connection with her discharge from employment. In a 1997 Memorandum Opinion and Order, familiarity with which is assumed, this Court enforced the mandatory arbitration clause contained in plaintiff's employment agreement and ordered the parties to arbitrate her claims. See 1997 WL 634290 (Oct. 14, 1997). In accordance with the opinion, the parties proceeded to arbitration. Following a three-day hearing, the arbitration panel issued a decision in favor of defendant on July 12, 1999. Plaintiff now moves to vacate the award, and defendant, the prevailing party, cross-moves to confirm it. As discussed below, I conclude that no valid grounds for vacating the award exist and therefore summarily confirm it.
BACKGROUND
A. Factual Background
The facts of this case, which I derive from the complaint and the parties' pre-hearing submissions to the arbitration panel, are substantially as follows.
Plaintiff, an African-American woman, worked for defendant as a secretary and receptionist from 1981 until her discharge in 1994. In 1984, plaintiff signed an employment application that superseded the one she initially submitted when she was hired in 1981. This second application contained an arbitration clause that provides in relevant part:
I hereby agree that any controversy arising out of or in connection with my compensation, employment or termination of employment shall be submitted to arbitration before the National Association of Securities Dealers, Inc., the New York Stock Exchange, Inc., or the American Stock Exchange, Inc. and be resolved in accordance with the rules, then in effect of such entities.
Affidavit of Kevin B. Leblang dated October 22, 1999 ("Leblang Aff.") at Ex. D.
When she was first hired, Ahing worked as a secretary for several different investment bankers. In 1985, after receiving a succession of recent poor performance reviews, Ahing was transferred to the position of receptionist on Lehman's executive floor, the 10th floor. Although plaintiff does not allege that the investment bankers who poorly evaluated her harbored any discriminatory motive, she nevertheless surmises that the transfer was the product of racial discrimination. Complaint at ¶ 4. The only apparent basis for this assertion is the complaint's conclusory allegation that Ahing's secretarial supervisor in 1985 "made numerous racially inappropriate remarks," without specifying what those remarks were. Complaint at ¶ 2. Plaintiff also alleges that in the same year that supervisor, again motivated by racial discrimination, improperly directed her to type a memorandum which caused her to be humiliated and reprimanded by a managing director. Id. at ¶ 3. Plaintiff further avers that when she discussed the possibility of transfer to a different position within Lehman Brothers, Robert Genirs, then Chief Administrative Officer, made an inappropriate remark to her about her appearance. Complaint at ¶ 5.
From 1985 to 1991, while she was working as a receptionist on the 10th floor, plaintiff concedes that she did not experience racial discrimination. The discrimination at the heart of her claim began to surface when Donna Ditaranto, a white woman, became her supervisor in 1991. Ahing contends that Ditaranto and Joyce Tomasso, a white receptionist on another floor, engaged in a "pattern and practice of racial discrimination" against her.Id. at ¶ 7. The facts that plaintiff alleges give rise to an inference of discrimination consist primarily of Tomasso's having rummaged through her desk drawers on several occasions and Ditaranto's alleged comment that "there were too many black people" in a calendar offered for sale by another employee. Complaint at ¶ 12.
In November of 1993, plaintiff was transferred permanently from the 10th floor to a nonexecutive floor after an apparent altercation involving a Lehman Vice President. In February of 1994, she was suspended and then terminated after being accused of disrupting a fire drill. On December 16, 1994, Ahing filed the present complaint alleging that she was terminated because of her race and gender.
For its part, Lehman contends that plaintiff's allegations of discrimination are baseless. It forcefully argued to the arbitration panel and reiterates here that Ahing's termination resulted from her unprofessional behavior, including her "hostile, uncooperative and downright rude attitude towards her co-workers, senior employees, and at least on one occasion, in the presence of guests at the reception area." Defendant's Answer to Ahing's Statement of Claim, Leblang Aff. at Ex. C ("Answer"), pp. 2-3. To support this argument, defendant furnished contemporaneous memoranda documenting complaints over a period of several years concerning Ahing's unacceptable behavior and describing the repeated warnings she had been given to improve it.
Defendant submitted the following documentary evidence to the arbitration panel to substantiate its position: (1) a September 14, 1989 memorandum written by Joanne Colucci, a building security supervisor, detailing an incident in which Ahing behaved rudely toward members of security when she was asked to sign for her daughter who had come to visit; (2) a September 15, 1991 memorandum written by Donna Ditaranto describing a meeting with Ahing to discuss both the Colucci memo and Ahing's repeated tardiness; (3) an October 16, 1989 memorandum by Ditaranto to the file relating a discussion she had with Ahing regarding her tardiness; (4) a memorandum dated December 24, 1991 to Ahing from Ditaranto summarizing their recent discussion concerning Ahing's "rudeness and uncooperative behavior" and expressing her "great concern with respect to your ability to perform your duties as receptionist on an executive floor;" (5) a November 17, 1993 memorandum to Ditaranto written by a Lehman Vice President, Beverly Ax, complaining that plaintiff had acted in a rude, disruptive and unprofessional manner in front of Ax and several guests while Ax was attempting to secure the use of a conference room on the 10th floor; (6) a November 22, 1993 memorandum from Ditaranto to Ahing summarizing their conversation regarding Ax's accusation; (7) a February 17, 1994 memorandum to Ditaranto from a Lehman manager describing plaintiff's disruptive and inappropriate behavior during a fire drill on that date; and (8) a February 18, 1994 memorandum to the file by Ditaranto describing her meeting with Ahing to discuss the manager's account of her behavior at the fire drill, which Ahing denied, and noting that other employees present at the fire drill had corroborated the manager's account. See Leblang Aff., Ex. C.
According to defendant, this evidence, supported by the testimony at the hearing of Ditaranto and Robert Genirs, overwhelmingly demonstrates that Ahing frequently exhibited unacceptable and uncooperative conduct over the course of her employment which she was warned about and failed to consistently improve, and was fired as a result of it.
B. Procedural Background
As noted, the Court ordered the parties to arbitrate plaintiff's claims pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq. See 1997 WL 634290, *2-3. Subsequent to that order, plaintiff filed a statement of claim with the National Association of Securities Dealers, Inc. ("NASD"). A three-member NASD arbitration panel held hearings on June 7, 8 and 11, 1999, at which plaintiff, Ditaranto, Robert Genirs, and another individual, Migdalia Thomas, testified.
The panel issued a written decision dismissing plaintiff's claims on July 12, 1999. In the decision, the panel summarized the parties' respective positions as follows:
Claimant alleged that she experienced racial and sexual discrimination, harassment and a hostile work environment while employed by Respondent from March, 1981 through February, 1994. Claimant further alleged that she was wrongfully terminated due to the intentional and purposeful ongoing practices of Respondent which were intended to humiliate and degrade her.
Respondent alleged that Claimant was treated fairly and appropriately throughout her employment with them. Respondent alleged that Claimant's performance throughout her employment was erratic and ultimately led to her dismissal. Respondent maintained Claimant was not the victim of discrimination and was terminated for continued inappropriate behavior.
Leblang Aff. at Ex A. Without furnishing the rationale behind its decision, the panel issued an award in favor of defendant:
After considering the pleadings, the testimony and the evidence presented at the hearing, the undersigned arbitrator [sic] have decided in full and final resolution of the issues submitted for determination as follows:
1. Claimant's claims are hereby dismissed in their entirety.
2. All other claims for relief are hereby denied.
Id. In addition, the panel directed each party to pay one half of the $3,900 forum fees assessed.
C. Motion to Vacate
As far as one can ascertain from the circuitous arguments contained in her brief, plaintiff asserts a two-fold basis for vacatur. First, echoing her opposition to defendant's 1997 motion to compel arbitration, Ahing argues, primarily relying on a recent Ninth Circuit decision, that her Title VII claim is non-arbitrable because the arbitration provision cannot be enforced to deprive her of a judicial forum for that claim. In addition, Ahing contends that the arbitration provision is unenforceable for several reasons: it does not apply to employees who are not securities dealers; she signed the application after she was already employed and therefore without any additional consideration; and the NASD has since abolished its previous requirement of mandatory arbitration of discrimination claims between a registered securities dealer and her employer.
Ahing's remaining arguments fall within the rubric of the "manifest disregard" doctrine, more fully discussed below. Ahing contends that the award must be vacated because it was issued in "manifest disregard" of the law for several reasons: the panel's impermissible reliance on "after-acquired" evidence to dismiss her claim; the panel's direction that she pay half of the forum fees; and the panel's failure to provide an explanation for its decision.
As explained below, plaintiff's arguments are without merit.
DISCUSSION
A. Non-Arbitrability
As the Court recognized in its prior opinion in this case, under the FAA "courts must interpret written arbitration agreements with `a healthy regard for the federal policy favoring arbitration,'" resolving any doubts concerning the arbitrability of issues in favor of arbitration. 1997 WL 634290, *1 (quotingMoses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-5 (1983)). In that opinion, this Court evaluated the relevant factors going into an arbitrability analysis and concluded that the arbitration clause in Ahing's employment agreement rendered her claims subject to mandatory arbitration.Id. at *2. In doing so, this Court rejected plaintiff's argument that her Title VII claim was non-arbitrable because Congress intended to preclude the waiver of judicial remedies with respect to claims under Title VII. Noting that the Supreme Court had held in the seminal case of Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991) that claims brought under the Age Discrimination in Employment Act ("ADEA") can be subject to compulsory arbitration, this Court concluded that although the Second Circuit had not yet reached the issue, it would follow the majority of courts that had extended the Gilmer logic to claims brought under Title VII. See 1997 WL 634290, *2. In addition, this Court rejected plaintiff's argument that the arbitration provision did not apply to her because she was merely a secretary, not a securities broker. Id. at ¶ 2-3.
In what essentially amounts to a belated reargument of that decision, plaintiff now submits that her claims are non-arbitrable for a number of reasons, some of which this Court has already squarely rejected. These arguments have no place at this stage of the proceedings. The Court determined more than two years ago that the parties were compelled to arbitrate and they are bound by that decision. But even assuming that I may revisit the question of arbitrability on this motion to vacate, I conclude that plaintiff's arguments are unavailing.
Plaintiff's primary contention, as she argued three years ago, is that her Title VII claim is exempted from the mandatory arbitration provision. For this argument, plaintiff now relies on the decision in Duffield v. Robertson Stephens Co., 144 F.3d 1182 (9th Cir. 1997), in which the Ninth Circuit declined to extend the analysis in Gilmer to Title VII claims and held that mandatory arbitration of Title VII employment claims is unenforceable. Glaringly absent from plaintiff's argument, however, is any mention of Second Circuit authority directly to the contrary. The Second Circuit's decision in Desiderio v. National Association of Securities Dealers, Inc., 191 F.3d 198, 203 (2d Cir. 1999), petition for cert. filed, 68 U.S.L.W. 3497 (U.S. Jan. 31, 2000) (No. 99-1285), rejected the Duffield decision and called it a "notable exception to" the consensus among the other circuits that mandatory arbitration is enforceable in Title VII cases. In Desiderio, the Second Circuit sided with the majority of circuits in holding that, as with ADEA claims, Congress did not intend to preclude waiver of a judicial forum for Title VII claims. Id. at 206. In light of Desiderio, which constitutes authority binding on this Court and directly contrary to the only case plaintiff cites to support her position, this Court must reject plaintiff's argument that as a matter of law her Title VII claim is not subject to compulsory arbitration.
In point of fact, plaintiff states that the Supreme Court "has upheld the finding in" Duffield see Plaintiff's Motion to Vacate Arbitration Decision ("Pl. Brief") at 10, apparently because it declined to grant a writ of certiorari over it. See 525 U.S. 982, 525 U.S. 996 (1998) (denying petitions for certiorari in Duffield, 144 F.3d 1182). But it is a familiar principle that the Supreme Court's refusal to grant review in a particular case does not amount to approval, much less affirmance, of the findings of fact or conclusions of law contained in the lower court's decision.
Ahing also argues that the arbitration provision's lack of specific reference to statutory discrimination claims precludes mandatory arbitration of her Title VII claim. I disagree.
Plaintiff derives this argument from two cases, Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998), and Crespo v. 160 West End Avenue Owners Corp., 253 A.D.2d 28, 687 N.Y.S.2d 79 (A.D. 1st Dep't 1999), which involved union-negotiated collective bargaining agreements containing general arbitration clauses that did not specifically embrace statutory discrimination claims. The Supreme Court in Wright and the New York Appellate Division in Crespo held that such union-negotiated arbitration provisions do not automatically waive an employee's right to bring statutory discrimination claims in a judicial forum. In the context of collective bargaining agreements, the courts found that waiver of the employee's statutory right to a judicial forum for discrimination claims must be "clear" and "unequivocal" in order to be enforceable. 525 U.S. at 81; 253 A.D.2d at 32.
Relying on Wright and Crespo, plaintiff argues that because her arbitration agreement contains no specific reference to statutory discrimination claims, she did not clearly waive her right to a judicial forum for her Title VII claim and therefore she is not subject to mandatory arbitration of that claim. Plaintiff misapprehends the holdings in those cases. Neither held that all arbitration agreements must contain specific reference to statutory discrimination claims in order to be enforceable as to such lawsuits. Instead, the cases focused exclusively on union-negotiated collective bargaining agreements, which were specifically distinguished from individually executed arbitration agreements such as the one in the case at bar. See 525 U.S. at 77; 253 A.D.2d at 32. Significantly, in Wright, the Court recognized that "Gilmer involved an individual's waiver of his own rights, rather than a union s waiver of the rights of represented employees — and hence the `clear and unmistakable' standard was not applicable." 525 U.S. at 80-81. Here, because Ahing personally executed the agreement containing the arbitration clause, Wright and Crespo do not control, and thus the only basis for plaintiff's argument that she did not waive her right to bring her Title VII claim in a judicial forum evaporates.
Plaintiff's argument that her status as a secretary somehow insulates her from the arbitration provision also fails to persuade. By way of background, this case does not involve a Form U-4, the form that securities brokers must execute and submit in order to register with the NASD. Until 1999, Form U-4s contained a provision requiring the compulsory arbitration of all disputes including discrimination claims between the registrant and his employer. See Desiderio, 191 F.3d at 201. Ahing was apparently not required to register with the NASD as a condition of her employment and therefore did not execute a Form U-4. Therefore the exclusive source of mandatory arbitration over her claims is the private employment application she executed in 1984. Although plaintiff mentions the fact that she did not execute a Form U-4 in an apparent effort to differentiate her situation from the cases in which arbitration was enforced, the absence of an NASD-mandated arbitration agreement is irrelevant. It does not nullify her private agreement to arbitrate or make it any less enforceable.
Contrary to plaintiff's contention, nothing in Gilmer suggests that the Supreme Court regarded the plaintiff's position as a securities broker to be crucial to its determination that mandatory arbitration of his ADEA claim could be enforced. This is not surprising, since Gilmer involved a Form U-4, which by its nature is executed by employees registering to engage in the sale of securities, and therefore the question of its enforceability as to a non-broker employee did not arise. Nonetheless, the Court's analysis of the enforceability of arbitration did not turn on the nature of the employee's work. Plaintiff appears to suggest that her position as a secretary made her less sophisticated and more vulnerable to unfair coercion and thereby renders her agreement an unenforceable contract of adhesion. But the Gilmer Court reasoned that "[m]ere inequality in bargaining power . . . is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context." 500 U.S. at 33. There is no basis in the record to conclude that as a secretary Ahing had less bargaining power than the broker whose mandatory arbitration the Court endorsed in Gilmer.
Other than her passing reference to Gilmer, Ahing fails to cite a single case to support the proposition that her arbitration clause was intended to apply only to registered securities brokers, a contention which this Court in any event addressed and rejected in its prior opinion. See 1997 WL 63490, ¶ 2-3. Indeed, at least one court within this circuit has rejected an analogous argument. The plaintiff in Townsend v. Smith Barney Shearson Inc., 906 F. Supp. 153 (W.D.N.Y. 1995), argued that the compulsory arbitration provision in the Form U-4 she executed did not prevent adjudication of her Title VII claim because she was merely a secretary and had never performed the responsibilities of a broker. The court found "no authority for this proposition" and held that "the terms of the Form U-4 as well as the case law compel the opposite conclusion. . . . [W]hether or not Townsend advanced in her employment status is irrelevant. She is bound by the Form U-4 arbitration provision, regardless of her job title or duties. . . ." Id. at 156. I have been given no compelling reason to hold otherwise with respect to Ahing's private arbitration agreement.
Plaintiff also argues that the arbitration provision is unenforceable because she was given no additional consideration when she signed the application after she was already employed. Plaintiff cites only one case, Phillips v. Cigna Investments, Inc., 27 F. Supp.2d 345 (D. Conn. 1998), decided under Connecticut law, in support of this argument. Her reliance is misplaced. In Phillips, after the plaintiff had been hired, her employer imposed a new policy requiring all employees to arbitrate any employment dispute, but never required the plaintiff to agree in writing to be bound by the policy. The court held that under Connecticut law, the parties never entered into a valid arbitration agreement because the mere continuation of an employee's performance did not constitute acceptance of the employer's new unilateral arbitration policy. Id. at 358-59. In this case, in pointed contrast, plaintiff did agree in writing to be bound by the defendant's new mandatory arbitration policy and therefore Phillips is inapposite.
To the extent Phillips could be read more broadly to stand for the proposition urged by plaintiff that post-hiring agreements to arbitrate employment disputes "are not valid as to civil rights claims," Pl. Brief at 9, it has no bearing on this case because it was decided under inapplicable Connecticut law. It has been held under New York law (which the parties do not dispute applies to this case) that the mere continuation of the employment of an at-will employee is sufficient, without additional consideration, to support a new post-employment promise made by that employee.See Zellner v. Conrad, 183 A.D.2d 250, 256, 589 N.Y.S.2d 903 (A.D.2d Dep't 1992). Moreover, a recent case in this district, governed by New York law came to a conclusion contrary to that urged by Ahing. In Arakawa v. Japan Network Group, 56 F. Supp.2d 349 (S.D.N.Y. 1999), the court rejected the plaintiff's argument that the arbitration agreement she had signed was an unenforceable contract of adhesion because she executed it years after she was hired. Id. at 352. The court held that the mere fact that she had agreed to be bound by the arbitration clause only "to keep her job" did not render the contract unenforceable since plaintiff did not make the "disturbing showing of unfairness, undue oppression or unconscionability necessary to void a contract on the basis that it is a contract of adhesion."Id. (internal quotations omitted). Ahing has likewise not remotely made such a demonstration. Thus, her contention that the clause does not bind her because it was entered into during the course of her employment must be rejected.
Finally, plaintiff misses the mark when she argues that the NASD's abolition of its rule compelling mandatory arbitration of statutory discrimination claims precludes arbitration of her Title VII claim. It is true that the NASD no longer requires its registered securities representatives to agree to the compulsory arbitration of statutory discrimination claims "solely by virtue of their association or their registration with the NASD." 63 Fed. Reg. at 35, 299, 1998 WL 339422 (June 29, 1998); see Desiderio, 191 F.3d at 201-02. The amendment which exempts statutory discrimination claims from NASD's arbitration requirement applies only to claims filed after January 1, 1999.See Desiderio, 191 F.3d at 202. Since the amendment is not retroactive and plaintiff filed her claim with the NASD in 1998, it does not apply to plaintiff's claim. Cf. Herman v. SBC Warburg Dillon Read, Inc., No. 99 Civ. 1593, 1999 WL 688304, *2 (S.D.N Y Sept. 3, 1999) (holding that plaintiff was required to arbitrate a Title VII claim filed one day before the effective date of the new NASD rule).
More importantly, however, plaintiff fails to recognize that the new NASD rule does not in fact prohibit arbitration of statutory discrimination claims. It merely carves out such claims from NASD' s longstanding requirement that its registered agents agree to arbitrate their employment disputes. See Exchange Act Release No. 34-39421, 1997 WL 759672, at *5 (Dec. 10, 1997) (the new rule "provides that claims alleging employment discrimination or sexual harassment in violation of a statute are not required to be arbitrated by NASD rules. This means that such claims may be filed in the appropriate court, if the employee chooses to do so and is not under a separate predispute obligation to arbitrate the dispute.") (emphasis added). Because the amendment addresses only the requirement of arbitration by virtue of the person's association or registration with the NASD, it does not speak to the enforceability of private employment agreements unrelated to NASD registration, such as the one Ahing executed. Indeed, the NASD explicitly noted that it took "no position regarding private agreements between employees and firms to arbitrate employment disputes." Id. at n. 24. Ahing did not submit a Form U-4 to the NASD and therefore the only arbitration agreement at issue is her private employment agreement. The new rule does not preclude an employer such as Lehman from requiring its employees to execute agreements to arbitrate statutory discrimination claims, even though the NASD no longer mandates it. Thus, even if the new rule applied retroactively (which it does not), the rule would not affect Ahing's private arbitration agreement.
Plaintiff has advanced no compelling reason for me to revisit my conclusion that her claims are subject to the mandatory arbitration provision in the employment application she executed. Accordingly, I decline to vacate the arbitration award on the basis that the claims it decided are non-arbitrable.
B. Manifest Disregard of the Law or Facts
In addition to contending that her claims are not subject to arbitration, plaintiff maintains that vacatur is required because the award was granted in "manifest disregard" of the law.
Arbitration awards are accorded considerable deference by the courts and may not be lightly disturbed. Judicial review of arbitration awards is therefore extremely limited. See Barbier v. Shearson Lehman Hutton Inc., 948 F.2d 117, 120 (2d Cir. 1991). The FAA identifies four grounds for allowing vacatur of an award, none of which plaintiff advances. See 9 U.S.C. § 10(a). In addition to the statutory grounds, however, courts have recognized that an arbitration award may be vacated if it is made in "manifest disregard of the law." Halligan v. Piper Jaffray, Inc., 148 F.3d 197, 201 (2d Cir. 1998) (internal quotations omitted), cert. denied, 526 U.S. 1034 (1999). Application of this judicially-created doctrine is "severely limited." Government of India v. Cargill Incorporated, 867 F.2d 130, 133 (2d Cir. 1989) (internal quotations omitted).
Under 9 U.S.C. § 10(a), an arbitration award may be vacated:
(1) Where the award was procured by corruption, fraud, or undue means.
(2) Where there was evident partiality or corruption in the arbitrators, or either of them.
(3) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced.
(4) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.
Manifest disregard "means more than error or misunderstanding with respect to the law." Halligan, 148 F.3d at 202 (internal quotations omitted). To vacate an award on this ground, "a court must find both that (1) the arbitrators knew of a governing legal principle yet refused to apply it or ignored it altogether, and (2) the law ignored by the arbitrators was well defined, explicit, and clearly applicable to the case." Id. The party seeking to disturb an arbitration award carries the burden of making the "high" showing that vacatur is warranted. Willemijn Houdstermaatschappij BV v. Standard Microsystems Corp., 103 F.3d 9, 12 (2d Cir. 1997).
In the present case, Ahing has made no colorable showing that the arbitrators rendered the award in manifest disregard of the law or evidence. Plaintiffs submission advances three primary grounds for a finding of manifest disregard: the absence of an explanation of the decision; the panel's alleged reliance on "after-acquired" evidence; and the panel's assessment of arbitration fees on the plaintiff. None of these furnishes a basis for vacating the award.
1. Written Explanation
It is clear beyond dispute that arbitrators are not required to furnish the reasoning for the outcome of the arbitration.Standard Microsystems, 103 F.3d at 12 ("arbitrators are not required to provide an explanation for their decision"); Barbier, 948 F.2d at 120 ("arbitrators need not explain their rationale for an award") (internal quotations and alteration omitted). Plaintiff nonetheless argues that the Second Circuit's decision in Halligan, supra 148 F.3d 197, renders invalid the panel's award in this case because it required the panel to furnish an explanation of their decision. Plaintiff misconstrues Halligan.
In Halligan, the Second Circuit addressed the inference permitted to be drawn from the absence of an arbitration panel's explanation in a case where the district court had concluded that the evidence was overwhelmingly in favor of the moving party who had lost at arbitration. Under those circumstances, the court indicated that the lack of an explanation can tip the balance in favor of a finding of manifest disregard. The Second Circuit held that although an arbitration panel has no obligation to explain its decision, where a "reviewing court is inclined to find that arbitrators manifestly disregarded the law or the evidence and that an explanation, if given, would have strained credulity, the absence of explanation may reinforce the reviewing court's confidence that the arbitrators engaged in manifest disregard." 148 F.3d at 204.
Plaintiff cannot find support in Halligan for her proposition that the panel's failure to supply a rationale for its award, standing alone, requires vacatur. Nothing in that decision countenances the wholesale disregard of an arbitration award merely because it lacks explanation. To the contrary, theHalligan court narrowly limited its holding, commenting that "[a]t least in the circumstances here, we believe that when a reviewing court is inclined to hold that an arbitration panel manifestly disregarded the law, the failure of the arbitrators to explain the award can be taken into account." 148 F.3d at 204 (emphasis added). And the court took pains to explain that it was "not holding that arbitrators should write opinions in every case or even in most cases." 148 F.3d at 204. As discussed below, this case is not analogous to Halligan because, unlike the Halligan court, I am not in the least inclined to find that the panel manifestly disregarded the facts of the case.
When arbitrators have not provided a specific rationale for their award, a reviewing court "must confirm the arbitrators' decision if a ground for the arbitrators' decision can be inferred from the facts of the case. This is so even if the ground for their decision is based on an error of fact or an error of law." Standard Microsystems, 103 F.3d at 12-13 (internal quotations, citation and alteration omitted). This standard reflects the deference traditionally afforded arbitration decisions and the limited role of judicial review over them. As the Second Circuit instructs, "[i]f there is even a barely colorable justification for the outcome reached, the court must confirm the arbitration award." Id. at 13 (internal quotations omitted). In this analysis, it is not the court's function to weigh the evidence anew or to make findings of fact. Rather, the court's role is limited to reviewing the evidence in the case to determine whether a basis exists for the outcome reached. See,e.g., Campbell v. Cantor Fitzgerald Co., Inc., No. 98 Civ. 3973, 1998 WL 740927, *2 (S.D.N.Y. Oct. 21, 1998) ("[I]t was up to the arbitrators to make factual findings, weigh the evidence, resolve evidentiary conflicts, and assess the credibility of witnesses.") (collecting cases), aff'd by summary order, 205 F.3d 1321 (2d Cir. Dec. 23, 1999).
In the instant case, more than sufficient grounds exist to sustain the arbitration panel's decision to dismiss plaintiff's claims. The parties have provided the Court with the pre-hearing statements they submitted to the arbitration panel. These documents articulated the parties' respective positions with respect to what they believed the facts would show, and defendant's contained the extensive documentary evidence of plaintiff's performance and behavior deficiencies outlined above. Defendant argued to the panel that Ahing had not met her burden of demonstrating an inference of discriminatory motive and that even if she had, Lehman had a lawful, non-discriminatory reason for firing her — erratic performance and unprofessional behavior. A review of these submissions demonstrates ample basis for the arbitrators to have concluded that plaintiff did not meet her burden of showing that she was dismissed as the result of racial or gender discrimination. See generally Grady v. Affiliated Central, Inc., 130 F.3d 553, 561 (2d Cir. 1997) (under Title VII the ultimate burden remains on the plaintiff to provide "evidence that would permit a rational factfinder to infer that the discharge was actually motivated, in whole or in part, by discrimination").
To begin with, plaintiff's evidence furnishing an inference of racial or gender animus on the part of her supervisors is underwhelming. According to Ahing's complaint and her pre-hearing submission, the evidence consisted of a comment made by Genirs in 1985 about her appearance, a comment by Ditaranto about her lack of interest in an African-American calendar, Ahing's conclusory allegations that her white colleagues received more favorable disciplinary treatment, and her speculation that Ditaranto and Tomasso were conspiring to discredit her out of racial bias. In view of the less-than-damning nature of this evidence, it is certainly plausible to conclude that the panel was not convinced that plaintiff demonstrated a sufficient basis for an inference of discriminatory motivation on the part of Lehman.
Plaintiff has not supplied the Court, or defendant, with a copy of the transcript of the arbitration hearing which was recorded on audiotape. Plaintiff's failure to do so is somewhat puzzling because plaintiff twice sought an adjournment of the briefing schedule of this motion in order to obtain copies of the hearing tapes which counsel represented had been ordered and mailed to her. Nor has plaintiff furnished the Court with copies of documents, if any, that she presented to the arbitrators, or summarized the testimony provided at the hearing by plaintiff or Migdalia Thomas (assuming that Ms. Thomas appeared as plaintiff's witness).
Without the benefit of this information, it is difficult to ascertain the precise nature of the evidence plaintiff presented to the panel. Since plaintiff maintains the considerable burden of demonstrating that vacatur of the award is warranted, she must bear the consequences of this less-than-complete record. In this regard, Judge Spatt's observation under analogous circumstances in Lieberbaum Co., Inc. v. Randle, 85 F. Supp.2d 123 (E.D.N Y 2000) is apt:
The Petitioners' efforts to argue that the panel disregarded a `clearly governing legal principle' are substantially hampered by their failure to supply the Court with a transcript of the tape recorded proceedings. Other than the panel's award, the Petitioners have only supplied the Court with the Petitioners' counsel's self-serving summary of the testimony in his supporting affidavit. The lack of a sufficiently complete record alone is enough to require rejection of the Petitioners' position. It is the Petitioners' burden to demonstrate manifest disregard of the law, and the failure to offer the entire record leaves the Court unable to exclude the possibility that the award is supported by evidence that the Petitioner has not supplied.Id. at 126 (emphasis added).
While neither Judge Spatt nor I go so far as to conclude that the petitioner's failure to present a complete record results in automatic rejection of her motion to vacate, I note that it is by plaintiff's own choice that I must determine whether manifest disregard occurred on the basis of a limited record. For this reason, I think it fair to presume that if something especially helpful to plaintiff's motion existed in the complete record she would have included it in her submissions to me.
The record also contains extensive documentation to support a finding by the panel that, even assuming plaintiff had established a prima facie case of discrimination, Lehman fired Ahing for poor performance and disruptive behavior. Based on the arguments made by defendant to the panel and the contemporaneous evidence of plaintiff's behavior it presented, the arbitrators had, at the very least, a colorable justification for rejecting plaintiff's claim. My function is not to decide whether the evidence presented by the parties was credible, or whether the arbitrators should have been persuaded by it. Therefore, I take no view on whether plaintiff in fact proved her case. Instead, under the deferential standard of review that applies to the manifest disregard doctrine, I need only determine whether I can ascertain a justification in the submissions made to the arbitrators and the record before them for the outcome they reached. I easily find that justification here. There is plenty of evidence from which to conclude that plaintiff's termination was not the product of discrimination but of her own shortcomings. Because I find no basis to presume that the arbitrators manifestly disregarded the facts of the case as Halligan did, I infer nothing untoward from the absence of an explanation.
2. After-Acquired Evidence
Plaintiff contends that the panel manifestly disregarded the law by improperly considering "after-acquired" evidence to dismiss plaintiff's claim. This argument is misguided because it is based on plaintiff's misunderstanding of the "after-acquired" evidence principle. In McKennon v. Nashville Banner Publishing Company, 513 U.S. 352 (1995), an ADEA case, the Supreme Court addressed the question of whether it is permissible to admit evidence of wrongdoing by an employee that would have caused his dismissal but for the fact that the defendant discovered the wrongdoing only after the employee's termination for clearly discriminatory reasons. The Court held that such "after-acquired" evidence may not be used to defeat a plaintiff's claim of discrimination, although it may be admitted to preclude reinstatement and front-pay and limit back-pay. Id. at 361-62. This doctrine has no relevance to the case at bar.
Plaintiff avers that when she first brought her claims against Lehman the only reason Lehman provided for firing her was her behavior during the February 1994 fire drill. See Pl. Brief at 12. As a result, plaintiff maintains that all of the evidence of her behavior and poor performance other than the alleged fire drill incident constitutes impermissible "after-acquired" evidence because it amounts to an effort to "invent a new defense." Id. This argument is devoid of merit. At the outset, I note that its factual premise is unsupported. Defendant did not file an answer to the complaint in this case because it instead filed a successful motion to compel arbitration. In its Answer to the arbitration claim, however, defendant makes clear its position that plaintiff's termination resulted from her continued unprofessional behavior in a series of incidents culminating in the fire drill as perhaps the proverbial last straw. See Leblang Aff. at Ex. C pp. 2-3. Nothing in Lehman's Answer divorces the reason for plaintiff's termination from her past behavior and limits it to the fire drill incident.
Regardless of whether defendant fixed upon the fire drill incident as the sole justification for discharging plaintiff, the evidence concerning Ahing's unprofessional behavior and poor performance over the years does not fall within the after-acquired evidence principle. After-acquired evidence is evidence of employee misconduct, such as criminal behavior, employer rule infractions, malpractice and the like, committed during the course of employment, of which the employer became aware onlyafter the employee's termination. See Gant v. Wallingford Board of Educ., 195 F.3d 134, 147 § n. 17 (2d Cir. 1999) (the after-acquired evidence doctrine holds that "an employer cannot escape liability [for discrimination] based on evidence of the plaintiff's misconduct that would have justified her termination in any event, when the employer discovered such evidence after it had fired the plaintiff for discriminatory reasons");Blake-McIntosh v. Cadbury Beverages, Inc., No. 96 Civ. 2554, 1999 WL 643661, *16 (D. Conn. Aug. 10, 1999) ("The after-acquired evidence doctrine limits damages when an employer discovers evidence of prior employee misconduct after the employee's actual or constructive discharge, if that misconduct is `of such severity that the employee would have been terminated on those grounds alone if the employer had known of it at the time of discharge.'") (quoting McKennon, 513 U.S. at 362-63)).
Ahing's implicit contention, by invoking this doctrine, that Lehman "discovered" the evidence of plaintiff's poor performance, misbehavior reports and poor reviews only after she was fired is baffling. By its very nature, Lehman must have had knowledge of this evidence before plaintiff was terminated because much of it was generated by the very supervisor who fired her and the rest of it by other Lehman employees. Indeed, plaintiff acknowledges that this information was in Lehman's possession well before she was terminated. With that recognition, plaintiff's argument attempts to follow a different track, suggesting that since Lehman knew of her alleged previous incidents of unprofessional behavior and failed to fire her at the time they occurred, it cannot now rely on those earlier incidents to justify her termination. This argument may go to the credibility of Lehman's contention that it fired her for continued poor performance and behavior, but it does not implicate the after-acquired evidence doctrine. Accordingly, the arbitration panel did not run afoul of that principle if it relied on this evidence in dismissing plaintiff's claim.
3. Fee-Splitting
Plaintiff argues that the panel demonstrated manifest disregard for the law in requiring her to split the costs of arbitration with defendant for a total sum of $1,950 each. Citing a decision of the Tenth Circuit, Ahing argues that an arbitration panel's direction that a discrimination plaintiff shoulder half, or even any, of the costs of arbitration is in clear violation of the law and requires vacatur of the award. This argument is deficient in several respects.
First, the case plaintiff relies on, Shankle v. B-G Maintenance Management of Colorado, Inc., 163 F.3d 1230 (10th Cir. 1999), does not stand for the proposition that, an arbitration award must be vacated if the arbitrators require a plaintiff to share the costs of arbitration. Shankle involved the question of whether or not a provision in an arbitration agreement that required the plaintiff to pay half of the arbitrator's fees was valid. The Tenth Circuit held that because such a requirement would place a "prohibitive cost" on the plaintiff, the provision failed to provide an adequate substitute for a judicial forum to vindicate the plaintiff's Title VII rights as a matter of law and was therefore unenforceable. Id. at 1235.
Shankle is distinguishable from the present case. Resolution of the question whether an arbitration agreement is enforceable because it contains a mandatory fee-sharing provision is conceptually different from the question plaintiff poses here — whether an arbitration award should be vacated in its entirety because the arbitrators required plaintiff to split the costs. In addition, unlike in Shankle, the arbitration agreement at bar did not compel the plaintiff to share fees. Rather, the assessment of fees on plaintiff was permissible, not required, under NASD rules to which the parties subjected themselves in the agreement. Theoretically, the mere possibility that a plaintiff may be assessed fees could have less of a deterrent effect on the plaintiff's prosecution of his claim than a plaintiff's certain knowledge that he will share in immeasurable arbitration costs.
Even if Shankle could be understood to preclude the assessment of fees on a plaintiff, whether mandated by a pre-dispute arbitration agreement or discretionarily imposed under the rules of the arbitration forum, the rule is by no means well-defined and clear because the circuits are at odds on the matter. Compare Paladino v. Avnet Computer Techonolgies, Inc., 134 F.3d 1054, 1062 (11th Cir. 1998) (requiring a plaintiff to pay arbitrators' fees renders arbitration forum inadequate for the vindication of Title VII rights); and Cole v. Burns Int'l Sec. Servs., 105 F.3d 1465, 1485 (D.C. Cir. 1997) (arbitration agreements requiring plaintiff's to pay forum fees for statutory discrimination claims are impermissible); with Koveleskie v. SBC Capital Mkts., Inc., 167 F.3d 361, 366 (7th Cir.) (mere possibility of fee-splitting is not sufficient reason to invalidate an agreement to arbitrate Title VII claims), cert. denied, 120 S.Ct. 44 (1999); Rosenberg v. Merrill Lynch, Pierce, Fenner Smith, Inc., 170 F.3d 1, 16 (1st Cir. 1999) (same; noting that "arbitration is often far more affordable to plaintiff's and defendants alike than is pursuing a claim in court"); and Williams v. CIGNA Financial Advisors Inc., 197 F.3d 752, 763 (5th Cir. 1999) (arbitration award imposing payment of half of forum fees on plaintiff did not preclude arbitration from being appropriate alternative forum for vindication of plaintiff's ADEA rights).
Not only is the validity of this principle disputed among the other circuits, plaintiff has not shown that a prohibition on fee-splitting is the clearly applicable law of this circuit. The Second Circuit has not had occasion to address the issue, and at least one district court within this circuit has taken a different view. In Arakawa, 56 F. Supp.2d at 354, the court rejected the plaintiff's argument that she was not compelled to arbitrate her Title VII claim because the arbitration agreement at issue required her to share with the defendant the costs of arbitration. The court recognized that the Second Circuit "has not opined on the issue of whether an arbitration agreement that leaves open the possibility that the plaintiff may have to pay the fees of the arbitration can provide an adequate forum for the redress of Title VII rights," and concluded:
the mere fact that a plaintiff faces the possibility of being charged arbitration fees, including sharing the arbitrator's compensation if directed to do so by the arbitrator, does not make the agreement to arbitrate Title VII claims unenforceable as a matter of law. A fee splitting arrangement is only contrary to the remedial and deterrent aims of Title VII if the fees are so great and the plaintiff's financial situation is such that the imposition of the fees would make the plaintiff unable to, or would substantially deter plaintiff from seeking to, enforce his or her statutory rights.Id. (citations omitted). I think that if there is a compelling argument that fee-splitting may render arbitration an inadequate forum for the redress of a plaintiff's Title VII rights, the concern arises, as Arakawa and other courts have indicated, from the amount of the fee relative to the plaintiff's ability to pay. In this case, the fees assessed were objectively moderate and plaintiff has not shown that they are so great relative to her financial circumstances that their imposition prevented her from having a full opportunity to vindicate her Title VII rights in the arbitration forum.
Finally, even if a rule that Title VII claimants may not be forced to pay any part of the arbitration forum fees were well-defined and clearly applicable in this circuit, the plaintiff cannot show that the arbitrators acted in manifest disregard of such a rule because there is no suggestion that the arbitrators knew of and ignored it. Cf. DiRussa v. Dean Witter Reynolds Inc., 121 F.3d 818, 823 (2d Cir. 1997) (arbitrators did not manifestly disregard law in failing to award attorney's fees where, although the law requiring such award was clear, it was not communicated to the panel; "In view of DiRussa's failure to inform the arbitrators of the relevant legal standard, we are hard-pressed to infer that they consciously disregarded the ADEA's fee provisions."). Significantly, Ahing does not state that either she or the defendant informed the panel of the principle espoused by Shankle, and there is no indication in the record that such communication was made or that the panel otherwise knew of it.
Because plaintiff has not shown that the arbitrators were aware of any clearly governing law precluding the panel from ordering plaintiff to pay half of the arbitrators' fees, their assessment of forum fees against her does not amount to manifest disregard of the law.
CONCLUSION
For the foregoing reasons, I conclude that plaintiff has not presented any valid basis for a finding that her Title VII claim is not subject to compulsory arbitration. Moreover, plaintiff has failed to satisfy her burden of demonstrating the existence of any legitimate ground for vacatur of the panel's decision. Plaintiff offers no basis for concluding that the panel issued its decision in "manifest disregard" of the law or the facts, and she does not invoke or demonstrate any of the statutory grounds for vacatur. Absent a basis to disturb the arbitration award to which I must accord substantial deference, I must summarily confirm it.
Plaintiff's motion to vacate the arbitration award is denied. Defendant's cross-motion to confirm the award is granted.
The Clerk of the Court is directed to dismiss the complaint in its entirety.
It is SO ORDERED.