Gilmer v. Interstate/Johnson Lane Corp.

Gilmer v. Interstate/Johnson Lane Corp. is a landmark United States Supreme Court case that involved arbitration and the Age Discrimination in Employment Act of 1967 (ADEA), with implications for employment law and labor law in the United States. The case was decided on May 13, 1991, with Justice Byron White delivering the opinion of the Court, joined by Chief Justice William Rehnquist, Justice John Paul Stevens, Justice Sandra Day O'Connor, and Justice Anthony Kennedy. The decision was significant for its impact on the Federal Arbitration Act (FAA) and its relationship to federal law, including the Civil Rights Act of 1964 and the Americans with Disabilities Act of 1990.

Background

The case involved Cleveland Gilmer, a stockbroker who worked for Interstate/Johnson Lane Corp., a brokerage firm based in Charlotte, North Carolina. Gilmer was required to sign an arbitration agreement as a condition of his employment, which mandated that all disputes be resolved through arbitration rather than in court. When Gilmer was fired at the age of 62, he filed a claim under the Age Discrimination in Employment Act of 1967 (ADEA), alleging that his termination was due to his age. The case was initially heard by the United States District Court for the Western District of North Carolina, which granted the defendant's motion to compel arbitration under the Federal Arbitration Act (FAA). The United States Court of Appeals for the Fourth Circuit affirmed the district court's decision, leading Gilmer to petition the Supreme Court of the United States for review, with support from American Association of Retired Persons (AARP) and the National Employment Lawyers Association (NELA).

Case History

The case was argued before the Supreme Court of the United States on January 14, 1991, with Laurence Gold representing Gilmer and Douglas McDowell representing Interstate/Johnson Lane Corp. The National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC) filed amicus curiae briefs in support of Gilmer, while the Chamber of Commerce of the United States and the National Federation of Independent Business (NFIB) filed briefs in support of the respondent. The case was closely watched by labor unions, including the AFL-CIO and the Service Employees International Union (SEIU), as well as by civil rights organizations, such as the NAACP and the American Civil Liberties Union (ACLU).

Supreme Court Decision

The Supreme Court of the United States held that arbitration agreements can be enforceable under the Federal Arbitration Act (FAA) even when they involve claims under federal law, such as the Age Discrimination in Employment Act of 1967 (ADEA). The Court rejected Gilmer's argument that the ADEA's statutory rights cannot be waived through an arbitration agreement, citing the Federal Arbitration Act's (FAA) liberal federal policy favoring arbitration. The decision was seen as a significant victory for business interests, including the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM), but was criticized by labor unions and civil rights organizations, such as the National Organization for Women (NOW) and the Leadership Conference on Civil and Human Rights.

Impact and Aftermath

The decision in Gilmer v. Interstate/Johnson Lane Corp. had significant implications for employment law and labor law in the United States. The case led to an increase in the use of arbitration agreements in employment contracts, which some argued would limit access to court for employees with claims under federal law, including the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act of 1993 (FMLA). The decision was also seen as a setback for labor unions, including the United Auto Workers (UAW) and the International Brotherhood of Teamsters (IBT), which had argued that arbitration agreements can be used to circumvent collective bargaining agreements and labor laws. In response to the decision, Congress considered legislation to limit the use of arbitration agreements in employment contracts, including the Arbitration Fairness Act of 2007, sponsored by Senator Russ Feingold and Representative Hank Johnson.

Legal Significance

The decision in Gilmer v. Interstate/Johnson Lane Corp. is significant because it established that arbitration agreements can be enforceable under the Federal Arbitration Act (FAA) even when they involve claims under federal law, such as the Age Discrimination in Employment Act of 1967 (ADEA). The case has been cited in numerous other decisions, including Circuit City Stores, Inc. v. Adams and 14 Penn Plaza LLC v. Pyett, which have further clarified the relationship between arbitration agreements and federal law. The decision has also been influential in shaping the development of employment law and labor law in the United States, with implications for workers' rights and business interests, including the National Retail Federation (NRF) and the Society for Human Resource Management (SHRM). The case has been studied by law schools, including Harvard Law School and Yale Law School, and has been the subject of numerous law review articles, including those published in the Harvard Law Review and the Yale Law Journal. Category:United States Supreme Court cases