500 U.S. 20, 111 S. Ct. 1647, 114 L. Ed. 2d 26 (1991)
Robert D. Gilmer was hired by Interstate/Johnson Lane Corporation in May 1981 as a Manager of Financial Services.1 As a condition of his employment, Gilmer was required to register as a securities representative with the New York Stock Exchange and other exchanges.2 In his registration application, Gilmer agreed to arbitrate any dispute required to be arbitrated under the rules of the organizations with which he registered.3 NYSE Rule 347 provides for arbitration of any controversy between a registered representative and a member arising out of employment or termination of employment.4
In 1987, Interstate terminated Gilmer's employment when he was 62 years old.5 Gilmer filed an age discrimination charge with the Equal Employment Opportunity Commission.6 He subsequently filed suit against Interstate in the United States District Court for the Western District of North Carolina, alleging a violation of the Age Discrimination in Employment Act of 1967.7
Interstate moved to compel arbitration of the claim based on the registration agreement and the Federal Arbitration Act.8 The District Court denied the motion.9 The Court of Appeals for the Fourth Circuit reversed the District Court's decision.10 The Supreme Court granted certiorari to resolve a circuit conflict on the arbitrability of ADEA claims.11
Although Gilmer did not raise the issue in the lower courts or in his petition for certiorari, amici raised the question whether Section 1 of the Federal Arbitration Act exempts contracts of employment from the Act's coverage, and the parties fully briefed and argued the matter before the Court.12
Whether an ADEA claim can be subjected to compulsory arbitration pursuant to an arbitration agreement in a securities registration application?13
Statutory claims may be the subject of arbitration agreements enforceable under the FAA.14 A party who agreed to arbitrate a statutory claim does not forgo the substantive rights afforded by the statute.15 The burden rests on the party resisting arbitration to show that Congress intended to preclude waiver of a judicial forum.16
Yes. Gilmer signed the registration application agreeing to arbitrate disputes required by NYSE rules, including Rule 347 covering employment controversies.17 Nothing in the ADEA text or history explicitly precludes arbitration.18 The statute's flexible enforcement scheme and grant of concurrent jurisdiction to state and federal courts support arbitral resolution of claims.19 Gilmer's individual agreement arose directly from his securities registration as Manager of Financial Services rather than any collective bargaining process.20
An ADEA claim can be subjected to compulsory arbitration pursuant to an arbitration agreement in a securities registration application.21
Whether the text or legislative history of the ADEA explicitly precludes arbitration of claims under that statute?22
No. Gilmer conceded that nothing in the ADEA's text or legislative history explicitly precludes arbitration of claims under the statute.25 The Court therefore proceeded to examine whether an inherent conflict existed between arbitration and the ADEA's purposes.26 Gilmer had registered with the NYSE as required for his role managing financial services, but the ADEA's provisions for EEOC charges and private suits do not contain any explicit bar to arbitration agreements in the registration context.27
The text or legislative history of the ADEA does not explicitly preclude arbitration of claims under that statute.28
Whether compulsory arbitration is inconsistent with the ADEA's framework and purposes?29
There is no inherent inconsistency between the ADEA's policies and enforcing arbitration agreements.30 Arbitration and judicial resolution both focus on specific disputes yet can further broader social purposes.31 Other public-policy statutes have been held arbitrable so long as a litigant may effectively vindicate statutory rights in arbitration.32
No. Although arbitration focuses on specific disputes, it can further the ADEA's broader social purposes just as judicial resolution does.33 Arbitration will not undermine the EEOC's role because a claimant may still file an EEOC charge, the EEOC retains independent investigatory authority, and nothing in the ADEA requires EEOC involvement in every dispute.34 The ADEA's flexible approach and grant of concurrent jurisdiction to state and federal courts support arbitral resolution.35 Gilmer filed his charge with the EEOC before suing, yet the agreement still permits effective vindication of rights through arbitration under NYSE procedures.36
Compulsory arbitration is not inconsistent with the ADEA's framework and purposes.37
Related opinions on this issue
Justice Stevens dissented on the ground that compulsory arbitration conflicts with the congressional purpose of the ADEA.38 The authority of courts to award broad injunctive relief is central to eliminating discrimination.39 Commercial arbitration is typically limited to the parties' specific dispute and generally does not provide for class-wide injunctive relief.40
Allowing employers to contract away access to the courts undermines the independent judiciary's role in eradicating employment discrimination.41 He concluded that compulsory arbitration in this context is improper.42
Whether generalized attacks on the adequacy of arbitration procedures preclude arbitration of ADEA claims?43
Generalized attacks on arbitration procedures do not preclude arbitration.44 Speculation about biased arbitrators is refuted by protections in NYSE rules and the FAA.45 Limited discovery is unlikely to hinder proof of age discrimination more than in other arbitrable contexts.46 Concerns about written opinions or equitable relief are addressed by NYSE rules requiring written awards and permitting equitable relief.47
No. Speculation about biased panels is unwarranted because NYSE rules provide disclosure requirements and challenges along with judicial review for evident partiality.48 NYSE procedures allow document production and subpoenas that appear adequate for proving age discrimination claims.49 Arbitrators may fashion equitable relief and NYSE rules provide for collective proceedings.50 Gilmer's claim of age discrimination under the ADEA would receive adequate discovery and written awards under the NYSE framework applicable to his registration agreement.51
Generalized attacks on the adequacy of arbitration procedures do not preclude arbitration of ADEA claims.52
Whether claims of unequal bargaining power justify categorical invalidation of arbitration agreements in the employment context?53
No. There is no indication that Gilmer was coerced or defrauded into signing the registration application containing the arbitration agreement.56 Unequal bargaining power alone is not a sufficient reason to hold that arbitration agreements in the employment context are never enforceable.57 As a condition of his employment with Interstate, Gilmer signed the uniform application agreeing to NYSE rules, but the record shows no specific evidence of fraud or coercion in this individual employment context.58
Claims of unequal bargaining power do not justify categorical invalidation of arbitration agreements in the employment context.59
Whether Alexander v. Gardner-Denver Co. precludes enforcement under the FAA of an agreement to arbitrate statutory claims?60
Alexander v. Gardner-Denver Co. and its progeny addressed whether arbitration of contract-based claims under collective-bargaining agreements precluded subsequent judicial statutory claims.61 Those cases did not decide the enforceability under the FAA of an agreement to arbitrate statutory claims.62
No. The collective-bargaining context in Alexander presents concerns about tension between collective representation and individual statutory rights that are not present in Gilmer's individual registration agreement.63 Those cases were not decided under the FAA's liberal policy favoring arbitration.64 Gilmer's agreement arose from his securities registration application rather than a collective bargaining agreement negotiated by a union.65
Alexander v. Gardner-Denver Co. does not preclude enforcement under the FAA of an agreement to arbitrate statutory claims.66
Whether Section 1 of the FAA exempts arbitration agreements in employment contracts from the Act's coverage?67
Section 1 of the FAA states that nothing in the Act shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.68 The statutory exclusion should be read to cover agreements by employees to arbitrate disputes arising out of employment when such agreements are conditions of employment.69
No. The majority enforced the arbitration agreement without finding the FAA inapplicable.70 The coverage question was not raised by the parties in the lower courts.71 Although amici raised the Section 1 exemption issue, the Court proceeded to affirm the enforceability of the agreement signed by Gilmer as Manager of Financial Services.72
Section 1 of the FAA does not exempt arbitration agreements in employment contracts from the Act's coverage in this context.73
Related opinions on this issue
Justice Stevens would hold that the FAA does not apply to employment-related disputes between employers and employees and that compulsory arbitration in this context is improper.74 The coverage question is antecedent and dispositive of the case.75 The statutory exclusion in section 1 should not be narrowly construed to apply only to documents labeled contracts of employment.76
Early judicial interpretations support applying the exclusion to collective-bargaining agreements.77 The FAA was drafted to extend arbitration enforcement primarily in commercial contexts rather than labor disputes.78