This case, which arose in California, was before the Supreme Court on a Petition for Certiorari by Bingham McCutchen, a Massachusetts law firm with California offices, seeking review of the Massachusetts Supreme Judicial Court’s 2009 decision in Warfield v. Beth Israel Deaconess Med. Ctrs., Inc. NELF filed an amicus brief in support of Bingham’s request for Supreme Court review of the SJC’s decision, with which NELF has long disagreed.
In Warfield, the SJC barred the arbitration of state-law employment discrimination claims unless the employer identified those claims “in clear and unmistakable terms” in the agreement. In Warfield, the arbitration clause broadly covered all claims “arising out of or in connection with this [employment] Agreement . . . .” Long-established Supreme Court precedent establishes that, under the Federal Arbitration Act (FAA), such a broadly worded arbitration agreement should subsume all statutory claims. Notwithstanding the Supreme Court’s FAA precedent on the issue, the SJC ruled that statutory discrimination claims were not included. Since the employer in Warfield did not seek Supreme Court review of the SJC’s decision, the Warfield decision has required employers in Massachusetts to add the SJC-mandated, special-notice language to arbitration provisions. However, the Warfield requirement is preempted under the FAA because a broadly worded arbitration clause in an employment agreement already subsumes all such employment-related disputes.
Accordingly, NELF argued that certiorari should be granted to abrogate the Warfield rule under the FAA. The Warfield rule bars the arbitration of state-law discrimination claims unless employers identify those claims “in clear and unmistakable terms” in their arbitration agreements. The Warfield rule is preempted because it defeats the FAA’s core purpose of ensuring the enforcement of arbitration agreements according to their terms. Where, as here, the terms of an arbitration agreement cover all claims arising from the parties’ employment relationship, this Court has long held that, under the FAA, such an agreement includes all statutory claims falling within its scope. In fact, in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), the Court considered and rejected a heightened notice requirement substantially similar to the Warfield rule.
And yet Warfield has done precisely what Mitsubishi forbids, by erecting an unlawful presumption against the arbitration of State-law employment discrimination claims, which employers must then overcome with express language to the contrary in the arbitration agreement. The Warfield decision apparently sidesteps the Court’s long-standing and dispositive precedent, by relying on the erroneous premise that state contract law alone determines the scope of an arbitration agreement, i.e., the arbitrability of a claim. To the contrary, the arbitrability of a statutory claim under a broad arbitration clause is a matter of federal law under the FAA. Therefore, the Warfield rule must fall. The FAA mandates that no additional language is necessary, and none may be required, by Massachusetts or any other State, to compel the arbitration of statutory claims that fall under a broad arbitration clause, such as the petitioner Bingham’s, in this case.
NELF argued that the Warfield rule violates the FAA, and the Court’s clear precedent, in two ways. The Massachusetts court has refused to enforce a broad arbitration agreement according to its terms, and the court has conditioned the exercise of that federal right of arbitrability upon compliance with an unlawful and extraneous drafting requirement.
NELF also argued that the Warfield rule cannot survive a preemption challenge under the FAA merely because the Massachusetts court has characterized it as a general rule of contract law, applicable to any contractual waiver of rights under State law. The FAA preempts the Warfield rule, notwithstanding the Massachusetts court’s characterization, because the Warfield rule relies on the uniqueness of an agreement to arbitrate as its basis, namely the waiver of judicial and administrative avenues of relief.
NELF argued further that certiorari was further warranted to rectify the Warfield court’s mistrust of arbitration as an adequate forum for the vindication of statutory rights. Warfield has failed to heed the Court’s well-established principle that an arbitration agreement merely selects the forum for adjudicating a statutory claim. The agreement does not sacrifice any substantive rights associated with that claim. Since the employee who enters an arbitration agreement is not relinquishing any substantive statutory rights, no special notice is required to secure her consent to the arbitration of those statutory claims.
NELF argued that certiorari was also warranted because Warfield has misapplied the “clear and unmistakable” rule that this Court announced under federal labor law, with respect to the arbitrability of federal statutory claims under collective bargaining agreements. The Court has declined to extend the “clear and unmistakable” notice rule to individual employment agreements falling under the FAA. Moreover, Warfield has justified its misplaced reliance on this “clear and unmistakable” rule by quoting incompletely from 14 Penn Plaza LLC v. Pyett, 556 U.S. 247 (2009), a case decided under the National Labor Relations Act, and not the FAA. The full quotation from this case does not support the Warfield rule because it has absolutely nothing to do with the arbitrability of a state statutory claim under a broad arbitration clause--the sole issue in this case. Instead, the truncated quotation from 14 Penn Plaza addressed the unrelated point that a federalstatutory claim (i.e., the ADEA) was arbitrable under either an individual employment agreement or a collective bargaining agreement, because that federal statute’s text contains no contrary command against arbitration.
Finally, NELF argued that certiorari should be granted to dispel any possible confusion that certain language contained in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), would support heightened notice requirements in the arbitrability of State-law claims. This dictum from Concepcion is inapposite because it does not address in any way the content requirements to ensure the arbitrability of statutory claims under a broad arbitration clause. Instead this dictum is restricted to the unrelated, and highly specific, issue of the form of a class action waiver appearing in an adhesive consumer form contract.
Despite both Bingham’s and NELF’s compelling arguments, the Supreme Court denied certiorari in this case on January 13, 2014.