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concluding that motion to compel arbitration is non-dispositive
Summary of this case from Wilson v. Mercury Cas. Co.Opinion
02 Civ. 9249 (BSJ) (GWG)
August 22, 2003
OPINION AND ORDER
Plaintiff Eva Zouras filed the instant action against her former employer, Spear, Leeds Kellogg ("Spear"), and its corporate parent, the Goldman Sachs Group, Inc. ("Goldman"), alleging violations of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., and the Americans with Disabilities Act of 1990 ("ADA"), 42 U.S.C. § 12112-12117. See Complaint, filed November 20, 2002 (Docket #1) ("Complaint"), at 1. The defendants have now moved to compel arbitration and stay this proceeding pursuant to the Federal Arbitration Act, 9 U.S.C. § 1, et seq.. See Notice of Motion, filed March 31, 2003 (Docket #6). Because a motion to compel arbitration and stay an action is not a dispositive motion under 28 U.S.C. § 636(b)(1)(A), this Court will decide the defendants' motion pursuant to an opinion and order. See Tuskey v. Volt Information Sciences, Inc., 2001 WL 873204, at *1 n. 1 (S.D.N.Y. Aug. 3, 2001); Herko v. Metropolitan Life Ins. Co., 978 F. Supp. 149, 150 (W.D.N.Y. 1997).
I. FACTUAL BACKGROUND
Zouras was hired by Spear in 1994. See Complaint ¶ 3. In connection with her hiring, Zouras signed an employment application in September 1994. See Affidavit in Opposition to Defendants' Motion for a Stay Pending Arbitration, filed June 17, 2003 (Docket #11) ("Zouras Aff."), at 2. This application included an arbitration provision that stated:
If I am hired, I agree that any controversy between myself and Spear, Leeds Kellogg that may arise out of my employment shall be determined by arbitration. Any arbitration under this agreement shall be conducted pursuant to the Federal Arbitration Act and the laws of the State of New York, before the American Stock Exchange, Inc., the New York Stock Exchange, Inc., or the National Association of Securities Dealers, Inc., and in accordance with the rules obtaining of the selected organization. I understand that I am waiving my right to seek remedies at court, and that arbitration is final and binding on the parties.
Application for Employment, dated September 7, 1994 ("Employment App.") (reproduced in Declaration of Joshua B. Waxman, filed March 31, 2003 (Docket #8), Ex. A), at 4 ¶ 9. After her application for employment was accepted, Zouras went to work at Spear in Jersey City, New Jersey. See Affidavit of Eva Zouras, dated March 9, 2002 ("Zouras Complaint Aff.") (reproduced in Complaint, Ex. 1), ¶ 4.
Spear was acquired by Goldman in 2001. Complaint ¶ 8. On June 19, 2001, Zouras and ten male employees in the Spear Jersey City office were fired. See Zouras Complaint Aff., ¶ 19. Thereafter, Zouras filed a complaint with the Equal Employment Opportunity Commission ("EEOC") alleging sex and disability discrimination in her employment and in her termination. See EEOC Form 5, dated March 9, 2002 (reproduced in Complaint, Ex. 1). The EEOC issued Zouras two right to sue letters, one for her Title VII claim and one for her ADA claim. See Dismissal and Notice of Rights, Charge No. 171A200556, dated August 27, 2002 (reproduced in Complaint); Dismissal and Notice of Rights, Charge No. 171A200557, dated August 23, 2002 (reproduced in Complaint). Zouras filed her complaint in this action on November 20, 2002.
II. DISCUSSION
As the Second Circuit has recently noted:
The Federal Arbitration Act, 9 U.S.C. § 1 et seq. (1988), requires the federal courts to enforce arbitration agreements, reflecting Congress' recognition that arbitration is to be encouraged as a means of reducing the costs and delays associated with litigation.Vera v. Saks Co., 335 F.3d 109, 116 (2d Cir. 2003) (quotingDeloitte Noraudit A/S v. Deloitte Haskins Sells, U.S., 9 F.3d 1060, 1063 (2d Cir. 1993)). The relevant section of the Federal Arbitration Act states:
If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.9 U.S.C. § 3. The Second Circuit utilizes four factors to examine whether a court should stay an action and compel arbitration:
[F]irst, [the Court] must determine whether the parties agreed to arbitrate; second it must determine the scope of that agreement; third, if federal statutory claims are asserted, it must consider whether Congress intended those claims to be nonarbitrable; and fourth, if the court concludes that some, but not all, of the claims in the case are arbitrable, it must then determine whether to stay the balance of the proceedings pending arbitration.Genesco, Inc. v. T. Kakiuchi Co., 815 F.2d 840, 844 (2d Cir. 1987) (citations omitted). If all four factors exist, the Court must stay the proceedings and compel arbitration. See, e.g., PaineWebber Inc. v. Bybyk, 81 F.3d 1193, 1198 (2d Cir. 1996). The only issue contested by Zouras on the instant motion is whether her claims of sex discrimination under Title VII are arbitrable.
Zouras first argues that Title VII cases are not subject to arbitration at all. See Zouras Aff. at 2. In Desiderio v. Nat'l Ass'n of Sec. Dealers, Inc., 191 F.3d 198, 204-05 (2d Cir. 1999), cert. denied, 531 U.S. 1069 (2001), however, the Second Circuit squarely held that Title VII claims are subject to arbitration. See id. at 206. As a result, "it is now clearly settled law within the Second Circuit that arbitration clauses can be enforced in Title VII cases." Martens v. Smith Barney, Inc., 238 F. Supp.2d 596, 601 (S.D.N.Y. 2002); see also Moorning-Brown v. Bear, Stearns Co., Inc., 1999 WL 1063233, at *4 (S.D.N.Y. Nov. 23, 1999) ("Any doubt in this Circuit concerning the arbitrability of Title VII claims has been eliminated by . . .Desiderio.") (internal citation omitted).
Zouras cites to a Ninth Circuit case, Duffield v. Robertson Stephens Co., 144 F.3d 1182 (9th Cir. 1998), cert. denied, 525 U.S. 982 (1998), which held that employers could not require employees to arbitrate Title VII claims. See id. at 1185. Desiderio, however, is controlling on this Court. Moreover, it is doubtful that Duffield remains good law even in the Ninth Circuit. See Circuit City Stores, Inc. v. Najd, 294 F.3d 1104, 1107 (9th Cir. 2002) ("We also note that Duffield's continuing validity is questionable."); see also Farac v. Permanente Medical Group, 186 F. Supp.2d 1042, 1045 (N.D. Cal. 2002) (findingDuffield was "implicitly overruled" by the Supreme Court in Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001)). Thus, Zouras' Title VII claims are properly subject to arbitration.
Zouras' remaining argument is that neither the National Association of Securities Dealers, Inc. ("NASD") nor the New York Stock Exchange, Inc. ("NYSE") provides a forum for the arbitration of her claims. See Zouras Aff. at 2. This argument is based on amendments to NASD Rule 10201 and NYSE Rules 347 and 600, effective January 1, 1999. These amendments, however, provide that the NASD and NYSE will not arbitrate statutory employment discrimination claims based solely on the mandatory arbitration provisions contained in a Uniform Application for Securities Industry Registration or Transfer ("Form U-4"). See Order Granting Approval to Proposed Rule Change Relating to the Arbitration of Employment Discrimination Claims, Exchange Act Release No. 40,109 (June 22, 1998), 63 Fed. Reg. 35,299 (June 29, 1998); Order Approving Proposed Rule Change by the New York Stock Exchange, Inc. Relating to Arbitration Rules, Exchange Act Release No. 40,858 (December 29, 1998), 64 Fed. Reg. 1051 (Jan. 7, 1999). These amendments do not prevent parties from reaching an agreement separate from the Form U-4 to arbitrate claims, which is what occurred here.
Indeed, NASD Rule 10201(b) (as amended) specifically contemplates that an employment discrimination claim may be arbitrated "if the parties have agreed to arbitrate it, either before or after the dispute arose." While amended NYSE Rules 347 and 600 permit arbitration of employment discrimination claims "only where the parties have agreed to arbitrate the claim after it has arisen," the availability of the NYSE as a forum is irrelevant because Zouras' agreement explicitly contemplates an arbitration by the NASD. Here, the parties' agreement to arbitrate Zouras' employment claims was made before the dispute arose. See Employment App. at 4 ¶ 9. Accordingly, the NASD provides a forum for the arbitration under its rules. See, e.g., Bailey v. Chase Securities, Inc., 2002 WL 826816 (S.D.N.Y. May 1, 2002). Conclusion
For the foregoing reasons, defendants' motion to compel arbitration and to stay this action is granted.
The Clerk of the Court is requested to close the file in this action, subject to reinstatement in the event that post-arbitration proceedings become necessary.
SO ORDERED