Filed: May 05, 2000
Latest Update: Feb. 21, 2020
Summary: PUBLISH IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS ELEVENTH CIRCUIT MAY 5 2000 _ THOMAS K. KAHN CLERK No. 99-10506 _ D. C. Docket No. 94-515-1-CV-JTC STANLEY BROWN, Plaintiff-Appellant, versus ITT CONSUMER FINANCIAL CORPORATION, Defendant-Appellee. _ Appeal from the United States District Court for the Northern District of Georgia _ (May 5, 2000) Before BIRCH and HULL, Circuit Judges, and HODGES*, Senior District Judge. BIRCH, Circuit Judge: * Hono
Summary: PUBLISH IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS ELEVENTH CIRCUIT MAY 5 2000 _ THOMAS K. KAHN CLERK No. 99-10506 _ D. C. Docket No. 94-515-1-CV-JTC STANLEY BROWN, Plaintiff-Appellant, versus ITT CONSUMER FINANCIAL CORPORATION, Defendant-Appellee. _ Appeal from the United States District Court for the Northern District of Georgia _ (May 5, 2000) Before BIRCH and HULL, Circuit Judges, and HODGES*, Senior District Judge. BIRCH, Circuit Judge: * Honor..
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PUBLISH
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
MAY 5 2000
_______________
THOMAS K. KAHN
CLERK
No. 99-10506
_______________
D. C. Docket No. 94-515-1-CV-JTC
STANLEY BROWN,
Plaintiff-Appellant,
versus
ITT CONSUMER FINANCIAL CORPORATION,
Defendant-Appellee.
______________________________
Appeal from the United States District Court
for the Northern District of Georgia
______________________________
(May 5, 2000)
Before BIRCH and HULL, Circuit Judges, and HODGES*, Senior District Judge.
BIRCH, Circuit Judge:
*
Honorable William Terrell Hodges, Senior U.S. District Judge for the Middle District of
Florida, sitting by designation.
Plaintiff-Appellant Stanley Brown appeals the district court’s rulings
compelling arbitration and denying Brown’s motion to vacate the arbitrator’s decision
in favor of Defendant-Appellee ITT Consumer Financial Corporation (ITT). Because
we find that the district court properly compelled arbitration, and find no error in the
district court’s denial of the motion to vacate the award, we AFFIRM.
I. BACKGROUND
Stanley Brown, an African-American, was hired by ITT in 1990. Brown
worked in consumer loan collections for ITT, and was promoted to Assistant Vice-
President in 1991. In that role, he trained and supervised Bruce A. Billue and Terry
Jenkins, supervisors in ITT’s Atlanta Recovery Center. Billue and Jenkins are also
African-American. In 1993, Brown, Billue and Jenkins all filed complaints with the
Equal Employment Opportunity Commission (EEOC) alleging racially discriminatory
treatment by their superiors at ITT.
At the same time that their discrimination claims were being pursued with the
EEOC, ITT was undergoing a reorganization and conversion from the consumer loan
business to the home equity loan business. Billue and Jenkins were not offered
employment in the Home Equity Center after the Atlanta Recovery Center closed in
May 1993. Brown was retained until August 1993, during which time he managed the
Home Equity Center and trained his replacement. Brown was then terminated from
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his position and offered severance if he signed a release of claims against ITT. He
refused to sign.
In February 1994, Brown, Billue and Jenkins filed a complaint in the district
court alleging race discrimination and retaliation. ITT moved to compel arbitration
in accordance with the terms of an Employee Agreement (the Agreement) signed by
each of the men. The Agreement contains an arbitration clause which provides that
ITT and the employee
agree that any dispute between them or claim by either against the other or any
agent or affiliate of the other shall be resolved by binding arbitration under the
Code of Procedure of the National Arbitration Forum. . . .
R1-4, Exh.B.
The Agreement also provided that it could not be modified “except in a writing
designated as an ‘EMPLOYMENT AGREEMENT MODIFICATION’, signed by an
ITT CFC officer.” Id. In the district court, Brown argued, among other things, that
a Benefits Summary given to employees at the time of their termination and interim
bulletins issued by ITT executives replaced the Agreement, thereby invalidating the
arbitration clause. He also argued that the arbitration clause should fail because the
National Arbitration Forum (NAF) no longer existed. The district court rejected
Brown’s arguments and compelled arbitration.
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The arbitration was conducted by Judge John W. Sognier of JAMS/Endispute.
At the conclusion of the arbitration, Billue and Jenkins were awarded damages.
Brown was denied relief. His motion to vacate the arbitrator’s judgment was denied
by the district court. This appeal ensued.
II. DISCUSSION
We review the district court’s order compelling arbitration de novo. Sunkist
Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 756 (11th Cir. 1993). In
reviewing the denial of the motion to vacate the arbitration award, we accept the
district court’s findings of fact unless clearly erroneous, and we review questions of
law de novo. Scott v. Prudential Securities, Inc.,
141 F.3d 1007, 1014 (11th Cir.
1998), cert. denied,
525 U.S. 1068,
119 S. Ct. 798 (1999).
A. Arbitrability of the Dispute
Brown challenges the order compelling arbitration on four grounds: (1) that the
arbitration clause fails because it is vague; (2) that the arbitration clause is so broad
as to exceed § 2 of the Federal Arbitration Act (FAA); (3) that any agreement to
arbitrate is void because the arbitrator and procedure specified no longer exist; and (4)
that ITT waived its right to arbitration by its acts during the reorganization of the
4
company and its failure to raise the arbitrability of the claims with the EEOC.1 We
address each of these claims in turn.
1. Vagueness
Brown argues on appeal that the arbitration clause is void because it fails to
specifically state that statutory claims were included in the agreement to arbitrate. “It
is well established that arbitration is a creature of contract” and neither party can be
compelled to arbitrate when he has not agreed to do so. Scott, 141 F.3d at 1011
(citing AT&T Tech., Inc. v. Communications Workers of America,
475 U.S. 643, 649,
106 S. Ct. 1415, 1418 (1986)). A party cannot avoid arbitration, however, because the
arbitration clause uses general, inclusive language, rather than listing every possible
specific claim.
The language of the clause at issue is brief, unequivocal and all-encompassing.
It states that “any dispute between them or claim by either against the other” is subject
to arbitration. By using this inclusive language, the parties agreed to arbitrate any and
all claims against each other, with no exceptions. An arbitration agreement is not
vague solely because it includes the universe of the parties’ potential claims against
each other.
1
Brown also argues in a footnote that requiring Brown to pay a portion of the arbitration
fees renders the arbitration clause unenforceable. Brief of Appellant, at 24 n. 6. As this issue
was not raised before the district court, we do not address it here. See Sims v. Trus Joist
MacMillan, 22 F.3d 1059, 1060 n.2 (11th Cir. 1994).
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Brown also argues that as a matter of law statutory claims cannot be arbitrated
unless the arbitration clause so specifically states. This circuit has held that statutory
claims, including Title VII claims, can be subject to mandatory arbitration. See
Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698, 700 (11th Cir. 1992) (finding
that Title VII claims were arbitrable under the reasoning in Gilmer v.
Interstate/Johnson Lane Co.,
500 U.S. 20,
111 S. Ct. 1647 (1991)). Where, as here,
the agreement to arbitrate was made by the individual employee, and not by his
collective bargaining representative, the employee can be compelled to arbitrate his
statutory claim. Brisentine v. Stone & Webster Engineering Corp.,
117 F.3d 519,
524-25 (11th Cir. 1997). In addition, we have noted that “an arbitration agreement
[need not] specifically list every federal or state statute it purports to cover.” Paladino
v. Avnet Computer Tech., Inc.,
134 F.3d 1054, 1059 (11th Cir. 1998).
The plaintiff in Bender agreed to arbitrate “any dispute, claim or controversy
that may arise between me and my firm . . . .” 971 F.2d at 700 n.1. No specific
reference to statutory claims was made at all in the arbitration clause.
Id. Bender’s
Title VII claim was held to be included within the scope of the arbitration clause.
Id.
at 700. This finding is consistent with the well-established principle that “[t]he FAA
creates a presumption in favor of arbitrability; so, parties must clearly express their
intent to exclude categories of claims from their arbitration agreement.” Paladino,
134
6
F.3d at 1057 (citing First Options of Chicago, Inc. v. Kaplan,
514 U.S. 938, 945,
115
S. Ct. 1920, 1924-25 (1995)). We think that the language of the instant arbitration
clause similarly includes statutory claims. Brown’s vagueness challenge fails.
2. Breadth
Brown argues that the arbitration clause is too broad, because it exceeds the
scope of § 2 of the FAA by addressing not just those claims arising out of the
employment contract, but all claims between the parties, including statutory violations
related to the employment relationship. This is an additional attempt to argue that
Title VII and other statutory claims are not arbitrable. For the reasons articulated
above, this argument is without merit.
3. Failure of Chosen Forum
Brown also argues that the arbitration clause is void because the specified
forum, the National Arbitration Forum (NAF), had dissolved. This argument is
without merit. Section 5 of the FAA provides a mechanism for appointment of an
arbitrator where “for any [] reason there shall be a lapse in the naming of an arbitrator.
. . .” 9 U.S.C. § 5 (West 2000). The unavailability of the NAF does not destroy the
arbitration clause.
In Luckie v. Smith Barney, Harris Upham & Co., 999 F.2d 509 (11th Cir. 1993)
(per curiam), we held that parties to securities transactions could be compelled to
7
arbitrate in front of one of the specifically listed fora. Id. at 514. Accord In re
Salomon Inc. Shareholders’ Derivative Litig.,
68 F.3d 554, 558-59 (2d Cir. 1995).
Where the chosen forum is unavailable, however, or has failed for some reason, § 5
applies and a substitute arbitrator may be named. Astra Footwear Indus. v. Harwyn
Int’l, Inc.,
442 F. Supp. 907, 910 (S.D.N.Y.), aff’d,
578 F.2d 1366 (2d Cir. 1978).
Only if the choice of forum is an integral part of the agreement to arbitrate, rather than
an “ancillary logistical concern” will the failure of the chosen forum preclude
arbitration. See Zechman v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 742 F.
Supp. 1359, 1364 (N.D. Ill. 1990) (citing Nat’l Iranian Oil Co. v. Ashland Oil,
817
F.2d 326 (5th Cir. 1987)). Here there is no evidence that the choice of the NAF as the
arbitration forum was an integral part of the agreement to arbitrate. Brown’s
argument that the arbitration agreement is void because the NAF was unavailable must
fail.
4. Waiver
Brown also argues that ITT waived its right to arbitrate by issuing employment
related documents to employees subsequent to the Agreement, and by failing to raise
the arbitration issue with the EEOC. This assertion is also without merit. Waiver
8
results from a party’s “substant[ial] participat[ion] in litigation to a point inconsistent
with an intent to arbitrate” which results in prejudice to the other party. Morewitz v.
West England Ship Owners Mut. Protection and Indem. Assoc., 62 F.3d 1356, 1366
(11th Cir. 1995).
Brown refers to statements made by ITT executives and a “Benefits Summary”
issued by the company as indicating an intent by the company to abandon the
Agreement and the arbitration clause contained therein. The Agreement, however,
expressly provides that it “cannot be modified except in a writing designated as an
‘EMPLOYMENT AGREEMENT MODIFICATION’. . . .” R1-4, Exh. B. The oral
and written statements referred to by Brown do not suffice to supersede the arbitration
clause of the Agreement.
ITT was also under no obligation to make a presuit demand for arbitration.
Morewitz, 62 F.3d at 1366. The demand for arbitration was made promptly after the
lawsuit was filed. Brown did not incur the delay or expense associated with litigation
that might otherwise demonstrate prejudice.
Id. As there was no delay or action by
ITT inconsistent with an intent to arbitrate, no waiver occurred. The district court
properly granted the motion to compel arbitration.
B. Propriety of the Arbitrator’s Decision
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Brown also appeals the district court’s refusal to vacate the arbitrator’s award,
arguing that the award was arbitrary and capricious and evidenced a manifest
disregard for the law. Brown, however, bears the burden of asserting sufficient
grounds to vacate the award. Scott, 141 F.3d at 1014. Furthermore, an award cannot
be vacated as arbitrary and capricious unless no ground for the decision can be
inferred from the facts. Raiford v. Merrill Lynch, Pierce, Fenner & Smith,
903 F.2d
1410, 1413 (11th Cir. 1990).
Brown has not met his burden here. The arbitrator made a finding of fact that
the decision not to offer Brown continuing employment was a unilateral one by Latina
Cunningham. There is evidence to support this finding in the record. Compare
Ainsworth v. Skurnick, 960 F.2d 939, 941 (11th Cir. 1992) (finding an award arbitrary
and capricious where “[t]here is simply no explanation in the award itself why
damages were not awarded.”) Since we cannot say that the arbitrator’s decision was
not grounded in fact, the assertion that the award was arbitrary and capricious must
fail.
Brown has also failed to show that the arbitrator acted with manifest disregard
for the law. Arbitration awards will not be reversed due to an erroneous interpretation
of law by the arbitrator. Montes v. Shearson Lehman Bros., Inc., 128 F.3d 1456, 1460
(11th Cir. 1997). “To manifestly disregard the law, one must be conscious of the law
10
and deliberately ignore it.” Id. at 1461. In Montes, we found manifest disregard and
remanded for a new arbitration proceeding because the arbitration panel was
specifically asked by a party to disregard the law, and their award provided no reasons
for their decision that would indicate that the request had not been followed. There
are no such circumstances here. Brown argues that the arbitrator applied the wrong
legal test in assessing his retaliation claim, but does not assert that this alleged error
was intentional or that the arbitrator made a conscious decision not to follow the
appropriate legal standard. Even if the arbitrator applied the wrong standard, which
we need not decide, no manifest disregard for the law has been shown, and Brown’s
argument fails. The district court properly denied the motion to vacate the award.
As a final matter, Brown argues that the failure of JAMS to inform him of his
right to appeal or to grant an appeal of the arbitrator’s award was procedurally
deficient. There is no evidence that Brown did not have a copy of the JAMS rules
indicating that appeal was possible. Second, the language of JAMS Rule 6 is
permissive. The case administrator “may ask” the parties if they agree to an optional
appeal process. Brief of Appellant, at 40. Finally, both parties must agree in order for
the appeal process to be binding. While it is possible that ITT would have agreed to
bind itself to an appeal process if asked at the preliminary hearing, nothing prevented
Brown from raising the issue himself once the case administrator failed to do so. We
11
find no prejudice from the case administrator’s failure to request the parties’ consent
to the appeal process as Brown had no unilateral right to appeal under the JAMS rules.
III. CONCLUSION
The district court properly compelled arbitration of Brown’s statutory claims
pursuant to the terms of the Agreement. The arbitrator’s award was not arbitrary and
capricious and did not evidence a manifest disregard for the law. Accordingly, we
AFFIRM.
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