Originally from:

Journal of American Arbitration (JAA) - Vol. 3, No. 1

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ARTICLES

The Ninth Circuit Court of Appeals Overrules
its Decision in Duffield and Strengthens an
Employer’s Use of Compulsory Arbitration in
EEOC v. Luce, Forward, Hamilton & Scripps
By Robert Sewell

I. OVERVIEW
The Equal Employment Opportunity Commission (EEOC) sued on
behalf of Donald Scott Lagatree, and similarly situated individuals,
against the law firm of Luce, Forward, Hamilton & Scripps (Luce
Forward) for its policy of compulsory arbitration of civil rights claims.
Luce Forward rescinded its job offer to Lagatree after he refused to sign
a compulsory arbitration agreement as a condition of employment. The
agreement required future employees to arbitrate all disputes including
statutory claims like Title VII of the Civil Rights Act of 1991. Lagatree
objected to the arbitration provision declaring that “[i]t was unfair” and
assert[ed] that he needed to retain his “civil liberties including the right to
a jury trial and redress through the government process.” EEOC v. Luce,
Forward, Hamilton & Scripps, 345 F.3d 742, 745 (9th Cir. 2003).
Lagatree first sued in state court where he was denied relief on his
claim of wrongful termination in violation of public policy. He sought
punitive damages, compensation for lost wages, and emotional distress.
The state court dismissed the complaint on demurrer holding that
Lagatree was lawfully discharged despite the condition in the arbitral
agreement that he arbitrate all claims with his employer, including civil
rights claims. Id. at 745. With the state suit pending, the EEOC filed suit
in United States District Court for the Central District of California
claiming that the Ninth Circuit’s decision in Duffield v. Robertson, 144
F.3d 1182 (9th Cir. 1998), prohibited Luce Forward from mandating that
employees sign arbitration agreements as a condition of employment.
Additionally, the EEOC claimed that by refusing to hire Lagatree, Luce
Forward unlawfully retaliated against him for asserting his constitutional
right to a jury trial. Luce Forward, 345 F.3d at 745-46.
The district court permanently enjoined Luce Forward from
requiring its applicants to arbitrate Title VII claims and from enforcing
existing employee arbitration agreements. The district court referenced
the reasoning in Duffield, which warned against the use of arbitration as a
condition of employment because individuals lose the right to utilize
provisions provided in the 1991 additions to Title VII, including the right
to a jury trial. Id. at 745-46. The district court asserted that Duffield
expressly denied compulsory arbitration of Title VII claims. Id. at 746.
Despite the strength of the plaintiff’s position, the court barred the EEOC
from seeking monetary relief because the state court’s judgment
precluded consideration of the issue on res judicata grounds. Id.
A Ninth Circuit panel overruled the district court’s decision,
claiming that Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001),