Perry v. Thomas

LOCATION: Dixie Furniture Store

DOCKET NO.: 86-566
DECIDED BY: Rehnquist Court (1986-1987)
LOWER COURT: State appellate court

CITATION: 482 US 483 (1987)
ARGUED: Apr 28, 1987
DECIDED: Jun 15, 1987

Bruce Gelber - on behalf of the appellee
Peter Brown Dolan - on behalf of the appellants

Facts of the case


Media for Perry v. Thomas

Audio Transcription for Oral Argument - April 28, 1987 in Perry v. Thomas

William H. Rehnquist:

We will hear argument next in No. 86-566, Barclay Perry and James Johnston versus Kenneth Morgan Thomas.

Mr. Dolan, you may proceed whenever you are ready.

Peter Brown Dolan:

Mr. Chief Justice, and may it please the Court, the issues on this appeal from a decision of the California Court of Appeals for the Second Appellate District are whether that court in affirming the order of the Los Angeles County Superior Court in denying the petition of appellants to compel arbitration of the claims asserted against them first incorrectly based its decision squarely on whether, which it says in so many words in the opinion itself, whether it disregarded the ruling of this Court in Southland versus Keating, whether it failed to follow the ruling of this Court in Dean Witter Reynolds versus Byrd by refusing to sever the nonwage claims which it felt were nonarbitrable under Labor Code Section 29, and referring the balance of the claims to arbitration, and whether it erred in applying Labor Code Section 229 in the first instance, contrary to the Federal Arbitration Act and in violation of the supremacy clause.

I think it would be useful to recap very quickly the chronology of the case because we come to you not after a trial, and the record is very limited.

Mr. Thomas, the appellee in this case, is employed by Kidder Peabody in August of 1982 as an account executive.

In prior years he had also been employed by other New York Stock Exchange member firms, including Morgan Stanley, E.F. Hutton, and Kenner Fitzgerald.

I make that observation because I think it is only fair to assume that Mr. Thomas either had or should have had a working knowledge of the rules which he says he read in signing the U4.

He had been in the industry for many, many years.

Rule 347, which provides for the arbitration, is a long-standing rule.

This Court addressed it in Ware in 1973 and it had been on the books many years before that.

In August of 1982, Mr. Thomas signed the U4, which contains the express arbitration agreement upon which our position is based.

In May of 1984, a dispute arose between Thomas and his colleague, Mr. Johnston, Kidder Peabody, his employer, and Barclay Perry, the manager of the Los Angeles office of Kidder Peabody.

Byron R. White:

There was an express provision for arbitration?

Peter Brown Dolan:

Yes, Your Honor.

Byron R. White:

In his employment contract?

Peter Brown Dolan:

That is found--

Byron R. White:

It wasn't just a reference to New York Stock Exchange rules or anything like that?

Peter Brown Dolan:

--No, Your Honor.

It reads--

Byron R. White:

Well, that is all I really need.

Peter Brown Dolan:

--That is Page 33A.

Now, the form of the U4 has varied over the years.

There was a time when there was only an incorporation by reference.

Byron R. White:

But this is express?

Peter Brown Dolan:

This particular one says,

"I agree to arbitrate any dispute, claim, or controversy that may arise between me and my firm or a customer or any other person that is required to be arbitrated under the rules, constitutions, or bylaws of the organizations with which I register as indicated in Question 8. "

One of those organizations is the New York Stock Exchange.

Byron R. White:

Well, that is by reference.

Peter Brown Dolan:

Well, the reference is only as to the ambit of the arbitration agreement.

That is to say, whether he agrees to arbitrate wage disputes or working conditions or the dress that he has to wear to the office or things of that sort.