RESPONDENT:Waffle House, Inc.
LOCATION:United States District Court Eastern District of Michigan
DOCKET NO.: 99-1823
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Fourth Circuit
CITATION: 534 US 279 (2002)
ARGUED: Oct 10, 2001
DECIDED: Jan 15, 2002
David L. Gordon – Argued the cause for the respondent
Paul D. Clement – On behalf of the petitioner
Facts of the case
Waffle House, Inc.’s employees must each sign an agreement requiring employment disputes to be settled by binding arbitration. After he suffered a seizure and was fired by Waffle House, Eric Baker filed a discrimination charge with the Equal Employment Opportunity Commission (EEOC) alleging that his discharge violated Title I of the Americans with Disabilities Act of 1990 (ADA). The EEOC then filed suit, alleging that Baker?s discharge violated the ADA, and sought injunctive relief and specific relief for Baker, including backpay, reinstatement, and compensatory damages, and punitive damages for malicious and reckless conduct. Under the Federal Arbitration Act (FAA), Waffle House petitioned to stay the EEOC’s suit and compel arbitration. The District Court did not stay the action. The Court of Appeals concluded that the arbitration agreement between Baker and Waffle House did not foreclose the enforcement action because the EEOC was not a party to the contract, but had independent statutory authority to bring suit in any federal district court where venue was proper. The appellate court also held that the EEOC was limited to injunctive relief.
Does an agreement between an employer and an employee to arbitrate employment-related disputes bar the Equal Employment Opportunity Commission from pursuing victim-specific judicial relief in an enforcement action alleging that the employer has violated Title I of the Americans with Disabilities Act of 1990?
Media for Equal Employment Opportunity Commission v. Waffle House, Inc.
Audio Transcription for Opinion Announcement – January 15, 2002 in Equal Employment Opportunity Commission v. Waffle House, Inc.
William H. Rehnquist:
The opinion of the Court in No. 99-1823 Equal Employment Opportunity Commission versus Waffle House will be announced by Justice Stevens.
John Paul Stevens:
This case comes to us from the Court of Appeals for the Fourth Circuit.
It presents a question whether an arbitration agreement between an employer and an employee prevents the Equal Employment Opportunity Commission from pursuing victim-specific relief, in other words, reinstatement backpay and damages in an enforcement action brought in court.
When Eric Baker applied for a job as a grill operator in one of the Waffle House Restaurants, he signed an agreement that “any dispute or claim” concerning his employment would be settled by binding arbitration.
After he started working, Baker suffered a seizure and soon thereafter was discharged.
He did not initiate arbitration proceedings nor has he done so in the seven years since his termination.
Baker did however file a charge of discrimination with the EEOC.
After an investigation and an unsuccessful attempt to conciliate, the EEOC filed suit against respondent in Federal District Court seeking an injunction.
Bakers’ reinstatement with backpay and damages for violations of Americans with Disabilities Act.
Respondent then field a petition under the Federal Arbitration Act seeking the stay the EEOC sued and to compel arbitration.
The District Court denied the petition, but on appeal, the Court of Appeals applying a balancing test held that the EEOC was precluded from seeking victim-specific relief because the federal policy favoring arbitration outweighs the EEOC’s interest in vindicating Baker’s private interest.
Injunctive relief would still be avaiable under the Court of Appeals’ rule because in that context the EEOC is protecting the interest of employees generally, but all other relief would be barred in order to give full effect to the arbitration agreement.
We granted certiorari and now reverse and remand.
The Court of Appeals policy judgment might be persuasive if it were true that the EEOC could prosecute its frame only with Baker’s consent or if Baker dictated the EEOC’s prayer for relief, but the exact opposite is true under the statute.
After the Commission filed suit, the employee has no independent course of action, although, he may intervene in the EEOC’s suit.
The statute expressly authorizes the EEOC to seek an injunction, reinstatement with or without backpay and compensatory and punitive damages.
Not a word in the statutory provision was giving the EEOC litigating authority, or in any of our cases suggest that the mere existence of an arbitration agreement between private parties qualifies that authority, nor does the Federal Arbitration Act, which of course was enacted long before the EEOC was created, impose any limits on the EEOC’s authority.
That statute was intended to place arbitration agreements on the same footing as other contracts, not to extend them beyond their term.
Although we have held that the FAA manifest a liberal policy favoring arbitration, we have also held that it is the language of the arbitration agreement that defines the scope of the arbitration.
The Act does not authorize a court to compel arbitration of any issues or by any parties not covered in the agreement.
The EEOC of course was not a party to the agreement between Baker and Waffle House.
In sum, this is a case in which a straightforward reading of the unambiguous text of the relevant statutes supports the position of the EEOC.
Justice Thomas joined by the Chief Justice and Justice Scalia has filed a dissenting opinion.