IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA

__________________________________ :

KBR CONSTRUCTION COMPANY, : Civil Action No. 2:16-cv-02349

LLC, :

Plaintiff, :

v. :

RANDY ALLEN PAULEY; WEST :

VIRGINIA COMMISSION OF HUMAN :

RIGHTS; MARYKAYE JACQUET, in her :

official capacity as Executive Director of the :

West Virginia Commission on Human Rights; :

HONORABLE GREGORY EVERS, in his :

Official capacity as Administrative Law :

Judge for the West Virginia Commission :

on Human Rights, :

Defendants. :

BRIEF OF THE U.S. EQUAL EMPLOYMENT OPPORTUNITY

COMMISSION AS AMICUS CURIAE IN OPPOSITION TO THE

PLAINTIFF’S PETITION TO COMPEL ARBITRATION AND

FOR INJUNCTIVE RELIEF

STATEMENT OF INTEREST

The U.S. Equal Employment Opportunity Commission (“EEOC” or “Commission”) is the federal agency charged with the enforcement of the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq. (“ADEA”), and other federal anti-discrimination statutes. To assist the EEOC in its endeavor to eradicate workplace discrimination, Congress authorized the Commission to collaborate with state and local agencies, also known as fair employment practice agencies (“FEPAs”), to prevent, eliminate, and remedy employment discrimination through worksharing agreements. See 29 U.S.C. §§ 625(b), 626(b). See also 42 U.S.C. § 2000e–4(g)(1). Since 1983, the EEOC and the West Virginia Human Rights Commission (“HRC”) “have operated under a work sharing agreement which applies to all employment discrimination claims arising under the common jurisdiction of the two agencies.” Petrelle v. Weirton Steel Corp., 953 F.2d 148, 151-52 (4th Cir. 1991).

This case raises an important issue concerning the impact of a private arbitration agreement on the authority and enforcement efforts of a FEPA, such as HRC, that acts as an agent of the EEOC for purposes of receiving and processing charges of employment discrimination. Given the significant and critical role that FEPAs play in the EEOC’s enforcement scheme, the Commission believes that FEPAs, such as the HRC, should not be bound by private arbitration agreements with respect to the processing and resolution of charges of discrimination. To hold otherwise would frustrate the effectiveness and efficiency of the enforcement processes facilitated by the Commission’s worksharing agreements and undermine the Congressional goal to eradicate workplace discrimination. Accordingly, the Commission offers its views to the Court as amicus curiae.

BACKGROUND

In 2007, KBR Construction Company (“KBR”) implemented a Dispute Resolution Plan and Rules (“DRPR”). D.1, KBR’s Complaint and Petition to Compel Arbitration and for Injunctive Relief (“Petition”) at 2 ¶11. KBR hired Randy Allen Pauley in December 2009. Petition at 2 ¶9. Prior to his employment, KBR required Pauley to sign the KBR Dispute Resolution Agreement which required any legal claims he had against the company be resolved through arbitration. Petition at 2-3 ¶¶11&12.

In pertinent part, DRPR states that all disputes, legal and equitable, concerning the employment or potential reemployment of an employee, and any matter concerning allegations of discrimination based on age, harassment, or wrongful discharge are subject to arbitration. Petition at 3 ¶13. Arbitration is the “exclusive, final and binding method by which the disputes are resolved.” Id. The DRPR, however, also states: “The Plan is . . . not intended either to abridge or enlarge substantive rights available under applicable law.” Ex. C at 1. With respect to administrative proceedings, the DRPR clarified that while the Plan “shall apply to a Dispute pending before any local, state or federal administrative body or court[,] [t]his Plan is not intended to limit any person’s right to file an administrative complaint or charge with, or to participate in the investigation of an administrative complaint or charge by, any governmental agency if giving this Plan such effect would be contrary to law (e.g., this Plan does not limit a person’s right to file a charge with the Equal Employment Opportunity Commission . . . .).” Ex. C at 9 ¶9(A). Lastly, the DRPR indicated that “[p]articipation in any administrative or judicial proceeding by the Company shall not affect the applicability of the Plan to any such Dispute during or upon termination of the administrative or judicial proceedings. A finding, recommendation or decision by an administrative body on the merits of a Dispute shall have the same legal weight or effect under the Plan as it would in a court of competent jurisdiction.” Ex. C at 9 ¶9(B).

On March 19, 2015, Pauley was laid off. Petition at 5 ¶18. Pauley filed a charge with the HRC alleging that KBR subjected him to unlawful discrimination and harassment because of his age in violation of the West Virginia Human Rights Act, W. Va. Code § 5-11-1, et seq. (“HRA”). Petition at 5 ¶ 19. In November 2015, the HRC issued a determination of probable cause to believe that KBR had violated the law. Id. at 5 ¶ 20. The HRC then notified KBR that a hearing would be held in August 2016 and that ultimately a binding determination of liability and damages would be made. Id.

The EEOC has entered into worksharing agreements “with approximately three-quarters of the . . . state and local agencies authorized to enforce state and local employment discrimination laws.” EEOC v. Commercial Office Prods. Co., 486 U.S. 107, 112 (1988). These worksharing agreements between the EEOC and the FEPAs established streamlined procedures designed to promote “effective enforcement” of the anti-discrimination laws, 42 U.S.C. § 2000e–8(b), and “to avoid unnecessary duplication of effort or waste of time.” Commercial Office Prods., 486 U.S. at 122.

The HRC is an agent of the EEOC with respect to its administration of discrimination charges. See Petrelle, 953 F.2d at 151-52. In recognition of Congress’ intent to encourage partnership between the EEOC and state and local agencies in their efforts to eliminate workplace discrimination, HRC’s worksharing agreement with the EEOC states that it is “designed to provide . . . an efficient procedure for obtaining redress for . . . grievances under appropriate state and Federal laws.” FY 2015 Worksharing Agreement Between West Virginia HRC and EEOC at 1-2.[1] Specifically, the agreement permits the EEOC and HRC to designate the other as its agent for the purpose of processing all charges of employment discrimination; to allow the nonprocessing party to review the initial processing party’s resolution of the charge and investigate the charge further after the initial processing party has completed its proceedings; and to make referrals. Id. at 2-5.

On receiving notice that HRC intended to hold a hearing on Pauley’s charge, KBR asked Pauley to dismiss his HRC complaint and submit to arbitration. Pauley refused. Petition at 5¶¶23-25. KBR then filed a complaint and petition to compel arbitration in this Court, arguing that, pursuant to the DRPR, Pauley agreed to arbitrate his claims and that any resolution by HRC will frustrate the purpose of the DRPR, render the DRPR meaningless, and irreparably harm KBR. Id. at 6 ¶29. Accordingly, KBR urges this Court to require Pauley to dismiss his administrative complaint and arbitrate his claims in accordance with DRPR; to enjoin HRC officials from adjudicating Pauley’s age discrimination claims and to direct HRC to dismiss Pauley’s complaint; and award KBR appropriate relief. Id. at 6.

ARGUMENT

PRIVATE ARBITRATION AGREEMENTS SHOULD NOT PREEMPT OR IMPEDE THE ADMINISTRATIVE PROCESSES OF STATE AGENCIES ENGAGED IN THE INVESTIGATION OR ADJUDICATION OF STATUTORY DISCRIMINATION CLAIMS

In EEOC v. Waffle House, Inc., 534 U.S. 279 (2002), the Supreme Court held that an arbitration agreement between private parties cannot bind the EEOC or impede its authority to pursue litigation and remedies on the basis of a charge of discrimination where the EEOC is not a party to the arbitration agreement nor has it agreed to arbitrate its claims. Id. at 294. The Court observed that there is no language in the 1991 amendments or prior Supreme Court precedent suggesting that the existence of an arbitration agreement between private parties materially changes the EEOC’s statutory function or the remedies that are otherwise available. Id. at 288. Moreover, it ruled that, even if the victim of discrimination has agreed to arbitration, once a charge is filed, “the EEOC is in command of the process” and “has exclusive jurisdiction over the claim[.]” Id. at 291. In short, the EEOC has “the authority to evaluate the strength of the public interest at stake” and it may “determine whether public resources should be committed to the recovery of victim-specific relief . . . in a judicial forum.” Id. at 291-92. The Court acknowledged that “[t]o hold otherwise would undermine the detailed enforcement scheme created by Congress simply to give greater effect to an agreement between private parties that does not even contemplate the EEOC's statutory function.” Id. at 296. Thus, the law is clear that the EEOC’s enforcement process is not foreclosed or constrained by private arbitration agreements.

This Court should apply the principles of Waffle House to the instant matter and conclude that the HRC’s administrative process should not be halted on the basis of an arbitration agreement between private parties, to which the HRC is not a party. As an agent of the EEOC and in its own right, the HRC is authorized to proceed with its administrative processing of Pauley’s age discrimination charge regardless of any agreement between Pauley and KBR to arbitrate his workplace disputes. Both the EEOC and the HRC are authorized to receive charges alleging employment discrimination. As a FEPA, the HRC is a state agency that has jurisdiction over allegations of employment discrimination based on race, color, sex, religion, age, disability, national origin, and reprisal filed against employers of 12 or more employees in the state of West Virginia. W. Va. Code § 5-11-1 et seq. and W. Va. Code § 5-11b-1 et seq. Similarly, the EEOC has jurisdiction over allegations of employment discrimination on similar bases occurring throughout the United States of America pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the ADEA, the Equal Pay Act of 1963, 29 U.S.C. § 206, et seq., Title I of the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101, et seq., and Title II of the Genetic Nondiscrimination Act of 2008, 42 U.S.C. § 2000ff, et seq.

By statutory design and congressional intent, the EEOC and the HRC have entered into a work-sharing agreement to foster effective enforcement and redress violations of state and federal anti-discrimination laws. Puryear v. Cty. of Roanoke, 214 F.3d 514, 518 (4th Cir. 2000) (“Congress empowered the EEOC to enter into worksharing agreements.”). Section 6(b) of the ADEA gives the EEOC the power “to cooperate with regional, State, local and other agencies . . . to aid in effectuating the purposes of [the ADEA].” 29 U.S.C. § 625(b). Section 7(b) incorporates the “powers, remedies, and procedures” set forth in the Fair Labor Standards Act, 29 U.S.C. § 211, which permits the EEOC to utilize the services of state and local agencies. See also 42 U.S.C. § 2000e–4(g)(1) (giving EEOC the power “to cooperate with and, with their consent, utilize regional, State, local, and other agencies”); 42 U.S.C. § 2000e–8(b) (“[i]n furtherance of such cooperative efforts, the Commission may enter into written agreements with such State or local agencies”). To effectuate this purpose, the HRC, acting as an EEOC agent under the work-sharing agreement, is authorized to process, investigate, conciliate, and resolve charges it receives that fall within the EEOC’s province. See HRC-EEOC Worksharing Agreement at 3-5. Those charges handled by the FEPA, in this case the HRC, are deemed automatically filed with the EEOC. Id. at 2; 29 C.F.R. §§ 1601.13(b), 1626.10(c). And, in making its own determination of whether reasonable cause exists, the EEOC accords substantial weight to the findings and orders of these state agencies as to Title VII and ADA claims. Id. at 5; 29 C.F.R. § 1601.21(e).

Any interference with the HRC’s enforcement activities because of a private arbitration agreement would be tantamount to interfering impermissibly with the EEOC’s own statutory enforcement efforts, something Waffle House states is clearly not permitted. Waffle House, 534 U.S. at 296 (refusing to “give greater effect to an agreement between private parties that does not even contemplate the EEOC’s statutory function.”). The EEOC depends on many state and local agencies across the nation with which it has work-sharing agreements to assist in accomplishing its mission to eradicate discrimination from the workplace. By congressional design, these FEPAs are integral to the enforcement scheme of the statutes the EEOC enforces.

In the 50 years of EEOC’s existence, the agency’s responsibilities and workload have expanded exponentially. Today, the Commission receives nearly 10 times as many charges a year as it did in 1965. See FY 2015 EEOC Performance and Accountability Report at 9.[2] The EEOC maintains work-sharing agreements and a contract services program with 94 state and local FEPAs for the purpose of coordinating the investigation of charges dual-filed under state and local laws and federal law, as appropriate. Id. at 95. In Fiscal Year 2015 alone, the FEPAs workload totaled 84,823 charges and of this number, they resolved 39,669 charges. EEOC Fiscal Year 2017 Congressional Budget Justification, https://www.eeoc.gov/eeoc/plan/2017budget.cfm#_Toc442168127. As these numbers demonstrate, FEPAs play a major role in supporting EEOC's mission to prevent and remedy unlawful employment discrimination. In addition to helping the EEOC resolve charges of employment discrimination, they prevent duplication of effort, resulting in a more efficient use of resources for both the EEOC and the FEPAs. Id.

Hence, permitting these agencies’efforts to eliminate employment discrimination to be obstructed by private arbitration agreements would be detrimental to the EEOC’s efforts to accomplish the goals of the fair employment laws. Accordingly, as an agent of the EEOC, the HRC should be equally authorized to proceed with its adjudication of Pauley’s age discrimination claims regardless of Pauley’s agreement to arbitrate them. Although the charge at issue alleges age discrimination and harassment in violation of state law, given the interplay between EEOC and HRC in their delegated management of discrimination charges, this Court’s disposition of the KBR’s petition to compel arbitration could detrimentally impact the efficacy of the EEOC’s enforcement efforts. See, e.g., Prudential Ins. Co. of Am. v. Lai, 42 F.3d 1299, 1303 n.1 (9th Cir. 1994) (because “[p]arallel state anti-discrimination laws are explicitly made part of Title VII’s enforcement scheme,” federal arbitration law “has the same application to state law [discrimination claims] as it does to Title VII claims”). The law is clear: The EEOC is the master of its administrative processes and litigation; therefore, an arbitration agreement regarding employment disputes between a worker and his employer is not binding on the EEOC. Waffle House, 534 U.S. at 291-94. The Commission’s administrative process relies on HRC’s participation in and facilitation of the processing of discrimination charges. Thus, if this Court were to decide that a private arbitration agreement can trump the administrative processes of the HRC, that would negate the HRC’s enforcement role of assisting the EEOC in eradicating employment discrimination and relegate the HRC, and by extension the EEOC, to a proxy for the charging party. Cf. Gen. Tel. Co. of the NW., Inc. v. EEOC, 446 U.S. 318, 326 (1980) (“the EEOC is not merely a proxy for the victims of discrimination[;] *** [w]hen the EEOC acts, . . . it acts also to vindicate the public interest in preventing employment discrimination”).

Furthermore, the HRC’s proceedings should not be enjoined because, as with the EEOC in Waffle House, the HRC is not a party to KBR’s arbitration agreement nor has it agreed to arbitrate any claims pursuant to the DRPR; thus there is no binding contract that precludes the HRC from proceeding with its administrative hearing. See Waffle House, 534 U.S. at 294 (where the EEOC is not a party to the contract and has not agreed to arbitrate its claims, “a contract cannot bind a nonparty”). In short, “the proarbitration policy goals of the FAA do not require the agency to relinquish its statutory authority if it has not agreed to do so.” Id. See also Volt Info. Sci., Inc. v. Bd. of Tr. of Leland Stanford Jr. Univ., 489 U.S. 468, 479 (1989) (“Arbitration . . . is a matter of consent, not coercion.”). Accordingly, the HRC, in its own right, has the authority to evaluate and adjudicate the claims “regardless of the forum that the employer and employee have chosen to resolve their disputes.” Waffle House, 534 U.S. at 295.

Indeed, this view is bolstered by the plain language of KBR’s arbitration policy itself, which appears to contemplate that Pauley’s claims can be filed with and processed by the HRC. The DRPR states that arbitration is intended to be exclusive but not in a manner intended “to abridge or enlarge substantive rights available under applicable law.” Ex. C at 1 (emphasis added). The DRPR also admonishes that the Plan would have no effect on a person’s right to file a charge or participate in an investigation of that charge with any governmental agency, including the EEOC, if such effect would be contrary to the law. Id. at 9 (emphasis added). Given these terms, KBR’s petition requesting this Court to require Pauley to withdraw his charge or the HRC to dismiss the charge appears at odds with the terms of the arbitration plan itself. Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221 (1985) (the FAA only requires enforcement of arbitration agreements according to their terms); Del Webb Communities, Inc. v. Carlson, No. 15-1385, --- F.3d ---- 2016 WL 1178829, at *4 (4th Cir. Mar. 28, 2016) (despite the “liberal . . . . federal policy favoring arbitration,” the FAA seeks to enforce arbitration agreements “in the manner provided for in such agreement”) (omitting internal citations).

Here, KBR’s arbitration plan plainly permits its employees to file charges involving disputes that may be subject to arbitration with “any governmental agency.” Ex. C at 9 ¶9(A). In that the DRPR itself does not prohibit KBR’s employees from filing administrative charges, it appears that Pauley is under no obligation under the terms of the arbitration agreement to withdraw his age discrimination charge, as KBR requests in its petition. To require Pauley to withdraw his discrimination charge “would actually be inimical to the policies underlying state and federal arbitration law because it would force the parties to arbitrate in a manner contrary to their agreement,” Volt, 489 U.S. at 472, and impermissibly abridge Pauley’s rights under the law. See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991) (“An individual ADEA claimant subject to an arbitration agreement will still be free to file a charge with the EEOC, even though the claimant is not able to institute a private judicial action.”). See also Circuit City v. Adams, 532 U.S. 105, 123 (2001) (“arbitration agreements can be enforced under the FAA without contravening the policies of congressional enactments giving employees specific protection against discrimination prohibited by federal law”).

Finally, in permitting an administrative charge to be filed with a governmental agency, the DRPR notes that KBR may participate in an administrative proceeding regarding the covered dispute, but admonishes that KBR’s participation will not affect the Plan’s application to the covered dispute. Ex. C at 9 ¶9(B). The DRPR also makes clear that “a finding, recommendation or decision by an administrative body on the merits of a Dispute shall have the same legal weight or effect under the Plan as it would in a court of competent jurisdiction.” Id. Nothing in these provisions suggests that the DRPR endorses or requires interference with external administrative proceedings concerning claims that are covered by the Plan. To the contrary, the DRPR indicates that “[p]articipation in any administrative or judicial proceeding by the Company shall not affect the applicability of the Plan to any such Dispute during or upon termination of the administrative or judicial proceedings.” Id. Consequently, the DRPR itself appears to undermine KBR’s argument that any proceeding or resolution by HRC will frustrate the purpose of the DRPR, render the DRPR meaningless, and irreparably harm KBR. Petition at 6 ¶29. In short, the arbitration plan does not seem to provide any basis for enjoining the HRC’s scheduled hearing. Waffle House, 534 U.S. at 294 (“While ambiguities in the language of the agreement should be resolved in favor of arbitration, we do not override the clear intent of the parties, or reach a result inconsistent with the plain text of the contract, simply because the policy favoring arbitration is implicated.”) (omitting internal citation). This, of course, makes sense as arbitration agreements, like the DRPR, are intended to substitute an arbitral forum for a judicial one, not for the administrative process.

Thus, enjoining the HRC from proceeding with its hearing and resolution of Pauley’s charge would not only depart from the terms of the arbitration agreement but also undermine “the detailed enforcement scheme created by Congress simply to give greater effect to an agreement between private parties that does not even contemplate the EEOC’s [or the HRC’s] statutory function.” Id. at 296. That cannot be what Congress intended when it encouraged the Commission to partner with the HRC and other FEPAs to eliminate unlawful discrimination in employment.

CONCLUSION

The FEPAs play an integral role in the enforcement efforts of the EEOC. Therefore, the FEPAs, such as the West Virginia HRC, should receive the same protection from private arbitration agreements as the EEOC has been accorded by law and confirmed by the Supreme Court. Accordingly, the Commission urges this Court to deny KBR’s petition.

Respectfully submitted,

P. DAVID LOPEZ

General Counsel

JENNIFER S. GOLDSTEIN

Associate General Counsel

LORRAINE C. DAVIS

Assistant General Counsel

PAULA R. BRUNER

Appellate Attorney

U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

Office of General Counsel

Appellate Litigation Services

131 M Street, NE, 5^th Floor

Washington, DC 20057

s/ Jessi Isenhart

Trial Attorney

EEOC - Cleveland Field Office

1240 East 9th Street, Suite 3001

Cleveland, OH 44199

jessi.isenhart@eeoc.gov

Telephone: 216-522-7676

Fax: 216-522-7430

WVSB #10692

[1] A court may take judicial notice of an EEOC worksharing agreement not tendered into the record by a party to the lawsuit. See Fowler v. D.C., 122 F. Supp. 2d 37, 40 n.4 (D.D.C. 2000); Cook v. Lee College, 798 F. Supp. 417, 421 n.12 (S.D. Tex. 1992). The worksharing agreement is attached.