No. 99-1823 

In the Supreme Court of the United States 

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, 
PETITIONER 

v. 

WAFFLE HOUSE, INCORPORATED 

ON PETITION FOR A WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE FOURTH CIRCUIT 

PETITION FOR A WRIT OF CERTIORARI 

C. GREGORY STEWART 

General Counsel 

PHILIP B. SKLOVER 

Associate General Counsel 

LORRAINE C. DAVIS 

Assistant General Counsel 

ROBERT J. GREGORY 

Senior Attorney 
Equal Employment 

Opportunity Commission 
Washington, D.C. 20507 
SETH P. WAXMAN 

Solicitor General 

Counsel of Record 

BARBARA D. UNDERWOOD 

Deputy Solicitor General 

JAMES A. FELDMAN 

Assistant to the Solicitor 

General 
Department of Justice 
Washington, D.C. 20530-0001 
(202) 514–2217 

QUESTION PRESENTED 

Whether an employee’s agreement to arbitrate 
employment-related disputes with an employer bars 
the Equal Employment Opportunity Commission, as 
plaintiff in an enforcement action against the employer, 
from obtaining victim-specific remedies for discrimi- 
nation against the employee, such as backpay, rein- 
statement, and damages. 

(I) 

II 

PARTIES TO THE PROCEEDING 

The caption of the case includes all parties to the 
proceeding in the district court and court of appeals. 

TABLE OF CONTENTS 

Page 

Opinions below ............................................................................... 
1 

Jurisdiction ...................................................................................... 1 

Statutory provisions involved ..................................................... 
2 

Statement ........................................................................................ 2 

Reasons for granting the petition ............................................... 
12 

Conclusion ....................................................................................... 21 

Appendix A ..................................................................................... 
1a 

Appendix B ..................................................................................... 
30a 

Appendix C ..................................................................................... 
35a 

Appendix D ..................................................................................... 
37a 

Appendix E ..................................................................................... 
54a 

TABLE OF AUTHORITIES 

Cases: 

Albermarle Paper Co. v. Moody, 422 U.S. 405 

(1975) ........................................................................................ 14 

Craft v. Campbell Soup Co., 177 F.3d 1083 (9th 

Cir. 1999) ................................................................................. 

19 

Doctor’s Assoc., Inc. v. Casarotto, 517 U.S. 681 

(1996) ........................................................................................ 20 

EEOC v. Frank’s Nursery & Crafts, Inc., 177 

F.3d 448 (6th Cir. 1999) ................................................ 

7, 15, 16 

EEOC v. Goodyear Aerospace Corp., 813 F.2d 

1539 (9th Cir. 1987) ................................................................ 

17 

EEOC v. Harris Chernin, Inc., 10 F.3d 1286 

(7th Cir. 1993) ......................................................................... 

17 

EEOC v. Kidder, Peabody & Co., 156 F.3d 298 

(2d Cir. 1998) .................................................................. 

7, 17, 18 

EEOC v. U.S. Steel Corp., 921 F.2d 489 (3d Cir. 

1990) ....................................................................................... 

17, 18 

General Tel. Co. of the Northwest, Inc. v. EEOC, 

446 U.S. 318 (1980)............................................. 3, 4, 8, 13, 14, 17 

(III) 

IV 

Cases—Continued: Page 

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 

20 (1991) ................................................................................... 

9, 19 

Green Tree Fin. Corp.- Alabama v. Randolph, 

cert. granted, 120 S. Ct. 1552 (2000).................................... 

11 

Mitsubishi Motors Corp. v. Soler Chrysler-Ply- 
mouth, Inc., 473 U.S. 614 (1985) ........................................ 

15 

Merrill Lynch, Pierce, Fenner and Smith, Inc. 

v. Nixon, No. 99-2635, 2000 WL 433245 (8th Cir. 

Apr. 24, 2000) .......................................................................... 

17 

O’Neil v. Hilton Head Hosp., 115 F.3d 272 (4th 

Cir. 1977) ................................................................................. 

20 

Rosenberg v. Merrill Lynch, Pierce, Fenner & 

Smith, Inc., 995 F. Supp. 190 (D. Mass. 1998), aff ’d, 

170 F.3d 1 (1st Cir 1999) ....................................................... 

18 

Wright v. Universal Maritime Serv. Corp., 525 U.S. 

70 (1998) ................................................................................... 

20 

Statutes and rule: 

Age Discrimination in Employment Act of 1967, 

29 U.S.C. 621 et seq. ............................................................... 

18 

29 U.S.C. 626(c)(1) ............................................................. 

18 

Americans with Disabilities Act of 1990, 42 U.S.C. 

12101 et seq.: 

Tit. I, 42 U.S.C. 12101 ...................................................... 

4, 17 

Tit. VII, 42 U.S.C. 12117(a) ....................................... 

passim 

Civil Rights Act of 1964, Tit. VIII, 42 U.S.C. 2000e 

et seq. .................................................................................... 

3 

42 U.S.C. 2000e (§ 701, 78 Stat. 253) .......................... 

3 

42 U.S.C. 2000e-5(b) ..................................................... 

3 

42 U.S.C. 2000e-5(f )(1) ........................... 

3, 8a, 10a, 37a, 57a 

42 U.S.C. 2000e-5(g) ............................................... 

4, 17, 61a 

42 U.S.C. 2000e-5(g)(1) .......................................... 

4, 18a, 61a 

Federal Arbitration Act, 9 U.S.C. 1 et seq. ............. 

2, 6, 19, 4a, 

22a, 41a, 43a 
9 U.S.C. 16(a)(1) ................................................................. 

7 

Labor–Management Relations Act, 29 U.S.C. 185 .............. 20 

V 

Statutes and rule—Continued: 

Page 

42 U.S.C. 1981a(a)(1) ..................................................... 

4, 17, 54a 

42 U.S.C. 1981a(a)(2) ..................................................... 

4, 17, 54a 

42 U.S.C. 1981a(d)(1)(A) ..................................................... 

4, 57a 

42 U.S.C. 1981a(d)(1)(B) ..................................................... 

4, 57a 

Fed. R. Civ. P. 23 .................................................................. 

13 

Miscellaneous: 

118 Cong. Rec. 4941 (1972) ...................................................... 

13 

S. Rep. No. 415, 92d Cong., 1st Sess. (1971) ......................... 14 

In the Supreme Court of the United States 

No. 99-1823 

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, 
PETITIONER 

v. 

WAFFLE HOUSE, INCORPORATED 

ON PETITION FOR A WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE FOURTH CIRCUIT 

PETITION FOR A WRIT OF CERTIORARI 

The Solicitor General, on behalf of the Equal Employ- 
ment Opportunity Commission, petitions for a writ of 
certiorari to review the judgment of the United States 
Court of Appeals for the Fourth Circuit in this case. 

OPINIONS BELOW 

The opinion of the court of appeals (App., infra, 1a- 
29a) is reported at 193 F.3d 805. The opinions of the 
district court (App., infra, 30a-34a) and of the magis- 
trate judge (App., infra, 37a-53a) are unreported. 

JURISDICTION 

The judgment of the court of appeals was entered on 
October 6, 1999. A petition for rehearing was denied on 
January 14, 2000 (App., infra, 35a-36a). On April 4, 
2000, the Chief Justice extended the time within which 

(1) 

2 

to file a petition for a writ of certiorari to and including 
May 15, 2000. The jurisdiction of this Court is invoked 
under 28 U.S.C. 1254(1). 

STATUTORY PROVISIONS INVOLVED 

Relevant provisions of the Americans With Dis- 
abilities Act of 1990, the Civil Rights Act of 1964, and 
the Federal Arbitration Act are reproduced in the Ap- 
pendix, infra, 54a-63a. 

STATEMENT 

Based on a claim filed with the Equal Employment 
Opportunity Commission (EEOC) by Eric Scott Baker, 
the EEOC brought this action against respondent in 
United States District Court for the District of South 
Carolina, alleging that respondent had engaged in 
unlawful employment practices against Baker on the 
basis of disability. Respondent moved to compel arbi- 
tration or to dismiss the action under the Federal Arbi- 
tration Act, 9 U.S.C. 1 et seq., on the ground that Baker 
had agreed to arbitrate employment-related disputes. 
The district court denied the motion, finding that Baker 
and respondent had not entered into an agreement to 
arbitrate. The court of appeals affirmed the district 
court’s refusal to compel arbitration, concluding 
(contrary to the view of the district court) that Baker 
and respondent had agreed to arbitration, but that that 
agreement did not prevent the EEOC from bringing 
this public enforcement action. The court also held, 
however, that, although the EEOC could obtain general 
injunctive relief, the agreement between Baker and 
respondent did preclude the EEOC from obtaining 
other, victim-specific forms of relief, such as backpay, 
reinstatement, and compensatory and punitive dam- 
ages. The court of appeals accordingly instructed the 

3 

district court to dismiss the claims for those forms of 
relief. 

1. As originally enacted, Title VII of the Civil 
Rights Act of 1964, Pub. L. No. 88-352, § 701, 78 Stat. 
253, authorized only a private right of action against 
employers. See generally General Tel. Co. of the 
Northwest, Inc. v. EEOC, 446 U.S. 318, 325-326 (1980). 
The EEOC was given the authority to process charges 
of discrimination and, if possible, to work out 
conciliation agreements with employers, but it was not 
authorized to bring suit against an offending employer. 
Ibid. In 1972, Congress amended Title VII to provide 
the Commission with independent authority to bring 
suit in court. See 42 U.S.C. 2000e-5(f)(1). 

The effect of the 1972 amendment was to create a 
dual system of private and public enforcement. Before 
a suit can be brought, a charge must be filed with the 
EEOC by or on behalf of an aggrieved person or by a 
Member of the EEOC. The EEOC must investigate 
the charge. 42 U.S.C. 2000e-5(b). If the EEOC finds 
reasonable cause to believe that discrimination has 
occurred, it must attempt to conciliate the charge; if 
that effort is unsuccessful, the EEOC may choose to 
bring a public enforcement action in its own name. 42 
U.S.C. 2000e-5(b) and 2000e-5(f)(1). An employee may 
intervene in such a suit, but the employee may not 
bring a suit in the employee’s own name if the EEOC 
has elected to file its own action. 42 U.S.C. 2000e- 
5(f)(1). If the EEOC fails to act within certain desig- 
nated time periods or determines that it will not itself 
file a suit and so notifies the employee, the employee 
may bring a private suit under Title VII. 42 U.S.C. 
2000e-5(f)(1). The EEOC may intervene in any such 
action. 42 U.S.C. 2000e-5(f)(1). Whether the action is 
brought by the EEOC or by an employee, the relief 

4 

available includes injunctive relief, as well as backpay, 
reinstatement, and other equitable relief. 42 U.S.C. 
2000e-5(g)(1). See General Tel., 446 U.S. at 324. In 
1991, Congress expanded the relief available to “a 
complaining party” in such an action—defined to 
include both private plaintiffs and the EEOC, see 42 
U.S.C. 1981a(d)(1)(A)—to include limited compensatory 
and punitive damages. See 42 U.S.C. 1981a(a)(1). 

Title I of the Americans with Disabilities Act of 1990 
(ADA), 42 U.S.C. 12101 et seq., outlaws discrimination 
in employment on the basis of disability. Title I ex- 
pressly incorporates “[t]he powers, remedies, and pro- 
cedures set forth in [Title VII].” 42 U.S.C. 12117(a). 
That includes the procedures outlined above applicable 
to enforcement actions brought by the Commission and 
the equitable relief available under 42 U.S.C. 2000e- 
5(g). In 1991, at the same time as it enacted 42 U.S.C. 
1981a(a)(1), which made damages available to a “com- 
plaining party” in a Title VII suit, Congress enacted 42 
U.S.C. 1981a(a)(2), which in identical terms made the 
same forms of damages available to a “complaining 
party” in an ADA suit. The term “complaining party” 
was defined for ADA purposes—as for Title VII 
purposes—to include both private plaintiffs and the 
EEOC. 42 U.S.C. 1981a(d)(1)(B). 

2. This case involves a public enforcement action 
brought by the EEOC. On June 23, 1994, Eric Scott 
Baker applied for employment at a Waffle House facil- 
ity in Columbia, South Carolina. App., infra, 2a. The 
application included a provision stating 

that any dispute or claim concerning applicant’s em- 
ployment with Waffle House, Inc., or any subsidiary 
or Franchisee of Waffle House, Inc., or the terms, 
conditions, or benefits of such employment, includ- 

5 

ing whether such dispute or claim is arbitrable, will 
be settled by binding arbitration. 

App., infra, 18a n.2. Baker was not hired to work at 
that facility, however. Instead, he began work on 
August 10, 1994, at a nearby Waffle House facility in 
West Columbia, South Carolina, apparently without 
filling out another job application. Id. at 3a.1 

Baker had a seizure disorder. On August 26, 1994, he 
had a seizure that lasted approximately 30 seconds just 
after arriving for work. He went home for the day, 

1 The facts recited in text are undisputed. There is some 
dispute about the relationship between Baker’s June 23 application 
for the job at the Columbia facility and his ultimate employment 
six weeks later at the West Columbia facility. The record contains 
the following information on that subject: 

The EEOC filed a set of standard interrogatories with the 
complaint in this case, based on the EEOC’s initial investigation of 
this case, reciting that “[t]he Manager [of the Columbia Waffle 
House] interviewed Baker and hired him to work in another 
nearby Waffle House * * * in West Columbia.” C.A. App. 13. 
Respondent filed an affidavit from its general counsel stating that 
“[a]ll prospective Waffle House employees are required to com- 
plete and sign a Waffle House employment application prior to 
being hired,” id. at 24, and attaching the application completed by 
Baker at the Columbia Waffle House on June 23, 1994. Id. at 26-27. 

After respondent moved to compel arbitration, EEOC filed an 
affidavit by Baker giving a somewhat different account of events. 
The affidavit stated that “[t]he manager [of the Columbia Waffle 
House] hired me; however, I subsequently declined the job offer.” 
C.A. App. 29. The affidavit then explained that “[a] few weeks 
after the job offer, I spoke with [the] manager of another nearby 
Waffle House * * * in West Columbia, South Carolina, and [the 
manager there] offered me a job * * *, which I accepted.” Ibid. 

On the basis of this information, the district court concluded 
that the arbitration clause in the application for the job in Colum- 
bia did not govern the job in West Columbia (App., infra, 34a); the 
court of appeals reached the opposite conclusion (id. at 5a-7a). 

6 

and the manager of the West Columbia facility told him 
not to report for work because of his disorder. On 
September 5, 1994, respondent terminated Baker’s 
employment. App., infra, 32a. 

3. Baker filed a charge with the EEOC, complaining 
that his discharge violated the ADA. He did not submit 
a claim for arbitration. On September 9, 1996, the 
EEOC filed this enforcement action in its own name 
against respondent, alleging that respondent had en- 
gaged in “unlawful employment practices on the basis 
of disability” and seeking “appropriate relief to Eric 
Scott Baker, who was adversely affected by such prac- 
tices.” C.A. App. 7. The EEOC sought an injunction 
barring respondent from employment discrimination on 
the basis of disability, an order that respondent insti- 
tute antidiscrimination polices and practices to create 
opportunities and eradicate the effects of past and 
present disability discrimination, backpay and rein- 
statement for Baker, compensation for pecuniary and 
non-pecuniary losses suffered by Baker, and punitive 
damages. App., infra, 4a. 

In response, respondent filed a petition under the 
Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., to 
compel arbitration and to stay or dismiss the EEOC’s 
enforcement action. The matter was referred to a 
magistrate judge, who filed a report concluding that 
Baker had entered into an arbitration agreement with 
respondent covering the instant claim. The magistrate 
judge recommended that the motion to dismiss the 
EEOC’s action be denied, but that the motion to compel 
arbitration be granted and the proceedings in this case 
be stayed pending arbitration. App., infra, 4a-5a, 33a. 

The district court disagreed with the magistrate 
judge’s conclusions. Apparently relying on Baker’s 
affidavit, see note 1, supra, the court held that “it does 

7 

not appear that Baker’s acceptance of employment at 
the West Columbia Waffle House was made pursuant to 
the written application which included the agreement 
to arbitrate.” App., infra, 34a. Because there had been 
no agreement to arbitrate, the court ruled that the 
motion to dismiss and the motion to compel arbitration 
should be denied. Ibid. 

4. Respondent filed an interlocutory appeal pur- 
suant to 9 U.S.C. 16(a)(1). A divided panel of the court 
of appeals reversed the district court’s finding that 
there had been no agreement to arbitrate, holding that 
such an agreement had been reached between Baker 
and respondent. The court noted that there was a 
conflict in the circuits regarding “whether and to what 
extent the [EEOC], in prosecuting a suit in its own 
name, is bound by a private arbitration agreement be- 
tween the charging party and his employer.” App., 
infra, 1a-2a (citing EEOC v. Kidder, Peabody & Co., 
156 F.3d 298 (2d Cir. 1998), and EEOC v. Frank’s 
Nursery & Crafts, Inc., 177 F.3d 448 (6th Cir. 1999)). 
Addressing that question, the court followed the 
Second Circuit’s decision in Kidder, Peabody and held 
that, although the agreement did not preclude an 
enforcement action by the EEOC because the EEOC 
was not a party to the agreement, it did limit the relief 
available in an EEOC enforcement action. See App., 
infra, 15a. 

a. With respect to whether an agreement had been 
formed, the court relied on the interrogatories filed by 
the EEOC with the complaint in this case, App., infra, 
3a; see also note 1, supra, and held that “[t]he generic, 
corporation-wide employment application completed 
and signed by Baker, and the arbitration provision it 
contained, followed Baker to whichever facility of 
Waffle House hired him.” App., infra, 7a. Accordingly, 

8 

the court concluded that “Baker’s application, when 
accepted by Waffle House, did form a binding arbitra- 
tion agreement between Baker and Waffle House.” 
Ibid. 

The court then addressed the question of what effect, 
if any, the agreement between Baker and respondent 
had on EEOC’s enforcement action. App., infra, 7a- 
18a. The court recognized that “[i]n enforcing the 
federal antidiscrimination laws, the EEOC does not act 
merely as a proxy for the charging party but rather 
seeks to ‘advance the public interest in preventing and 
remedying employment discrimination.’ ” 

Id. at 8a 
(quoting General Tel., 446 U.S. at 331). Referring to 
the 1972 amendments to Title VII that had vested the 
EEOC with power to bring enforcement actions in its 
own name, the court noted that “it was clear that 
Congress intended by these Amendments to place pri- 
mary reliance upon the powers of enforcement to 
be conferred upon the Commission . . . and not upon 
private law suits, to achieve equal employment op- 
portunity.” App., infra, 8a. The court explained that 
Congress intended “to preserve the EEOC’s authority 
to litigate selectively those cases which it believes will 
have the most significant public impact.” Id. at 9a-10a. 

The court reached two conclusions. First, the court 
concluded that respondent “cannot succeed on its mo- 
tion to compel the EEOC to arbitrate.” App., infra, 
13a. That conclusion was based on the court’s recogni- 
tion “that neither the ADA nor Title VII as incor- 
porated therein requires the EEOC to arbitrate,” id. at 
12a, that “the EEOC is not a party to any arbitration 
agreement,” ibid., and that “the only argument Waffle 
House could advance to require the EEOC to arbitrate 
is that the EEOC’s interest in enforcing the ADA is 
derivative of Baker’s interest,” ibid.—an argument that 

9 

“disregards the EEOC’s independent statutory role,” 
ibid. The court also noted that this Court had 
“recognized implicitly that the EEOC, acting in its 
public role, is not bound by private arbitration agree- 
ments.” Id. at 13a (citing Gilmer v. Interstate/Johnson 
Lane Corp., 500 U.S. 20, 32 (1991)). 

Second, the court concluded that the charging 
party’s agreement to arbitrate precludes the EEOC 
from obtaining victim-specific relief—such as backpay, 
reinstatement, or damages—in an enforcement action. 
The court noted the federal policy “to give [an arbi- 
tration] contract effect in order to favor the arbitration 
mechanism for dispute resolution.” App., infra, 14a. In 
the court’s view, “[t]o permit the EEOC to prosecute in 
court Baker’s individual claim * * * would 
significantly trample this strong policy favoring 
arbitration.” Ibid. The court stated that, “[b]ecause 
Baker’s own suit in court to enforce his ADA claim 
would be barred by his contract and by the federal 
policy embodied in the FAA, only a stronger, com- 
peting policy could justify allowing the EEOC to do for 
Baker what Baker could not have done himself.” Ibid. 
The court concluded that “[t]he EEOC’s public mission 
to eradicate and to prevent discrimination may be such 
a policy in certain contexts, but * * * it cannot 
outweigh the policy favoring arbitration when the 
EEOC seeks relief specific to the charging party who 
assented to arbitrate his claims.” Ibid. 

As applied to this case, the court thus held that the 
EEOC may seek to enjoin respondent from engaging in 
discriminatory actions and the EEOC may seek an 
order directing respondent to carry out practices and 
programs to provide equal employment opportunity 
and eradicate the effects of past and present discrimi- 
nation. App., infra, 15a-16a. But the court held that the 

10 

EEOC “cannot pursue Baker’s individual remedies in 
court,” such as “backpay, reinstatement, and 
compensatory and punitive damages.” Id. at 17a. 
Because the EEOC had stated that it had no intention 
to pursue those remedies in arbitration, the court “d[id] 
not reach the question of whether the EEOC is 
authorized to do so.” Ibid. The court remanded the 
case “with instructions to the district court to dismiss, 
without prejudice, the EEOC’s claims asserted on 
behalf of Baker individually and to permit the EEOC to 
move forward on its claims for broad injunctive relief.” 
Id. at 17a-18a. The court did not reach the question 
“whether the EEOC has pled sufficient facts to warrant 
the equitable relief it seeks.” Id. at 18a n.3. 

b. Judge King dissented on the ground that Baker 
and respondent had not entered into an arbitration 
agreement. He stated that “the district court con- 
cluded that Mr. Baker and Waffle House had not made 
an agreement to arbitrate with respect to the job that 
[Baker] ultimately accepted—the position of grill 
operator at the West Columbia Waffle House.” App., 
infra, 21a. In his view, that conclusion was based on 
findings of fact that were not clearly erroneous, id. at 
22a, and it was supported by the applicable principles 
of South Carolina contract law, id. at 23a-24a.2 Judge 
King would consequently have affirmed “the district 
court’s order denying Waffle House’s motions to 
dismiss and compel arbitration, thereby enabling the 

2 We continue to believe, as we argued to the court of appeals, 
that Judge King’s conclusion was correct, and that there was no 
agreement to arbitrate in this case. Further review of that issue, 
however, is not warranted, since it concerns the specific facts of 
this case and issues of state law. Therefore, we assume, for pur- 
poses of this petition, that Baker and Waffle House entered into a 
valid agreement to arbitrate employment-related disputes. 

11 

EEOC to pursue injunctive and ‘make-whole’ relief on 
behalf of Mr. Baker.” Id. at 22a.3 Judge King did not 
reach the question whether, if there had been a valid 
arbitration agreement between Baker and respondent, 
it would have had any effect on this EEOC enforcement 
action. 

5. The court of appeals denied EEOC’s petition for 
rehearing en banc by a 7-4 vote. 

3 Judge King’s dissent also noted two additional grounds that 
could render the arbitration agreement unenforceable, but neither 
was presented to or discussed by the panel majority, and neither is 
therefore before the Court on this petition. App., infra, 26a-27a 

n.9. First, he referred to the arbitration agreement’s provision 
that “[t]he costs and expenses of the arbitration shall be borne 
evenly by the parties.” Id. at 26a n.9. He explained that several 
circuits have held that such a provision is unenforceable in similar 
contexts and may render the agreement to arbitrate itself un- 
enforceable. The EEOC did not raise this issue before the panel, 
however, and the panel majority did not rule on it. Accordingly, 
the question whether and under what circumstances arbitration 
agreements containing similar provisions are enforceable as ap- 
plied to statutory antidiscrimination claims would not be before 
the Court on review of this case. For that reason, this case need 
not be held pending this Court’s decision in Green Tree Financial 
Corp.—Alabama v. Randolph, cert. granted, 120 S. Ct. 1552 (2000) 
(No. 99-1235), which presents, inter alia, the question whether “an 
arbitration provision that was ‘silent’ on the issue of costs and fees 
was unenforceable under the Federal Arbitration Act because the 
risk that plaintiff ‘might’ be required to bear unknown costs and 
fees potentially undermined her ability to vindicate statutory 
rights.” 99-1235 Pet. at i. 

Second, Judge King stated that the arbitration provision in the 
employment application in this case was “so inconspicuous that it 
failed, as a matter of law, to provide Mr. Baker with sufficient 
notice that he was waiving his right to a judicial forum for his 
statutory claims.” App., infra, 27a n.9. This question was not 
presented to or passed on by the panel majority, and it is therefore 
not before the Court on this petition. 

12 

REASONS FOR GRANTING THE PETITION 

The court of appeals’ ruling holds that the EEOC 
can be deprived of an important enforcement tool that 
Congress granted it—victim-specific relief—by an 
arbitration agreement to which the EEOC never 
became a party or otherwise assented. That ruling is 
mistaken and threatens serious harm to the EEOC’s 
enforcement role under federal antidiscrimination 
statutes. Because arbitration agreements of the sort at 
issue in this case are increasingly common, the issue can 
be expected to arise frequently in the future. Moreover, 
as the court of appeals recognized, its decision in this 
case—as well as a decision of the Second Circuit in a 
similar setting— conflicts with a decision of the Sixth 
Circuit holding that an indistinguishable arbitration 
agreement has no effect on the ability of the EEOC to 
obtain all of the forms of relief authorized by Congress, 
including the precise forms of victim-specific relief 
barred by the Fourth Circuit in this case. As a result of 
this conflict, the relief available to the EEOC depends 
on the circuit in which the case arises. The conflict in 
the circuits is squarely presented by this case, and 
further review is therefore warranted. 

1. The court below held that by entering into an 
arbitration agreement with the employer, the employee 
barred not only himself but also the EEOC from seek- 
ing statutory remedies for discrimination in the form of 
reinstatement, backpay, or compensatory or punitive 
damages. That holding rests on the view that in seek- 
ing those victim-specific forms of relief, the EEOC is 
largely vindicating private rather than public interests 
(App., infra, 15a), and therefore the EEOC should be 
circumscribed by the contractual choices made by the 
private party for whom it acts (id. at 16a-17a)—in 

13 

particular, the choice to arbitrate, which is favored by 
the federal policy embodied in the FAA (id. at 14a.). 

The court of appeals’ holding on this point ignores 
this Court’s teaching in General Telephone that when 
the EEOC brings an action to enforce the anti-dis- 
crimination law, and even when it seeks backpay and 
other victim-specific relief, it does not act simply as a 
proxy for the individual victims of discrimination. In 
General Telephone, the Court rejected the claim that 
EEOC enforcement actions seeking, inter alia, backpay 
for individual victims of discrimination should be 
considered “representative actions” subject to Federal 
Rule of Civil Procedure 23. The Court observed that, 
when Congress amended Title VII in 1972 to authorize 
the EEOC to bring enforcement actions, it did not 
eliminate the right of aggrieved individuals to sue in 
the absence of EEOC action, and it authorized such 
individuals to intervene in a suit brought by the EEOC. 
446 U.S. at 326. The Court explained that “[t]hese 
private-action rights suggest that the EEOC is not 
merely a proxy for the victims of discrimination,” and 
that its enforcement actions therefore should not be 
considered representative actions subject to Rule 23. 
Ibid. The Court stated that even when the EEOC 
seeks “specific relief, such as hiring or reinstatement, 
constructive seniority, or damages for backpay or 
benefits denied, on behalf of discrimination victims, the 
agency is guided by ‘the overriding public interest in 
equal employment opportunity . . . asserted through 
direct Federal enforcement.’ ” Ibid. (quoting 118 Cong. 
Rec. 4941 (1972)). In short, “[w]hen the EEOC acts, 
albeit at the behest of and for the benefit of specific 
individuals, it acts also to vindicate the public interest 
in preventing employment discrimination.” Ibid. 

14 

Because the EEOC is not a representative of private 
parties in litigation, an agreement by a private party 
to submit disputes to arbitration—or to any other 
means of resolution—does not commit the EEOC to do 
the same thing. As the Court recognized in General 
Telephone, Congress granted the EEOC authority 
independent of a charging party “to bring suit in its 
own name for the purpose, among others, of securing 
relief for * * * aggrieved individuals.” 446 U.S. at 
324. See also id. at 324-325 (“straightforward reading 
of the statute * * * authorize[s] the EEOC to sue in 
its own name to enforce federal law by obtaining ap- 
propriate relief for those persons injured by discrimi- 
natory practices forbidden by the Act”) (emphasis 
added). A charging party’s agreement to resolve its 
own disputes by submitting all employment-related 
claims to arbitration cannot alter the EEOC’s statutory 
authority to sue in federal court and obtain any statuto- 
rily authorized remedies there. 

Indeed, Congress identified the pre-1972 enforce- 
ment scheme, which left enforcement to the choices of 
private individuals, as a “major flaw in the operation of 
Title VII.” General Tel., 446 U.S. at 325 (quoting S. 
Rep. No. 415, 92d Cong., 1st Sess. 4 (1971)). As this 
Court has recognized, victim-specific relief serves a 
public interest (not merely a private one) by providing 
“the spur or catalyst which causes employers * * * to 
endeavor to eliminate, so far as possible, [discrimina- 
tory practices].” Albemarle Paper Co. v. Moody, 422 
U.S. 405, 417-418 (1975). By returning substantial 
control of that important enforcement tool to private 
parties, the Fourth Circuit’s decision substantially re- 
verses Congress’s decision to remedy the “major flaw” 
in Title VII by giving full—indeed, primary— 
enforcement authority to the EEOC. 

15 

2. a. The decision below deepens an existing split 
in the circuits. In EEOC v. Frank’s Nursery & Crafts, 
Inc., 177 F.3d 448 (1999), the Sixth Circuit followed 
General Telephone and held that the EEOC may obtain 
victim-specific relief in federal court, notwithstanding a 
private arbitration agreement. In Frank’s Nursery, 
the defendant employer required all applicants for jobs 
to sign a pre-employment agreement providing for 
compulsory arbitration of all employment claims. Id. at 
452. An employee who had signed such an agreement 
filed a charge with the EEOC alleging that the 
employer bypassed her for promotion on the ground of 
her race. Id. at 453. The employee did not attempt to 
arbitrate the dispute or otherwise privately settle her 
claim. Ibid. 

The EEOC investigated the charge and, after at- 
tempts at conciliation with the employer failed, filed 
suit against the employer in federal district court. 
Frank’s Nursery, 177 F.3d at 453. The EEOC sought 
injunctive relief against the employer, an order requir- 
ing the employer to carry out equal employment op- 
portunity policies and eradicate the effects of past and 
present employment discrimination, and, as in the 
present case, an order requiring the employer “to ‘make 
whole’ [the employee] by providing backpay with pre- 
judgment interest, as well as compensatory damages 
beyond backpay and punitive damages.” Ibid. The 
district court dismissed EEOC’s complaint, including 
its claim for monetary relief, because of the existence of 
the employee’s arbitration agreement. Id. at 454. 

The Sixth Circuit held that “the district court erred 
in dismissing the EEOC’s claim for monetary relief on 
behalf of [the employee] by relying on * * * the 
FAA.” 177 F.3d at 459. Quoting Mitsubishi Motors 
Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 625- 

16 

626 (1985), the court noted that the FAA “as a whole, is 
at bottom a policy guaranteeing the enforcement of 
private contractual arrangements.” 177 F.3d at 459. 
Applying “general principles of contract law,” the 
court reasoned that “one individual cannot contractu- 
ally waive the statutory rights of one who is not a party 
to the contract, and one individual cannot, by waiving 
her statutory right to vindicate her own interest, waive 
the statutory right of a federal sovereign to vindicate 
the public interest unless the government agrees.” Id. 
at 460. Therefore, since the EEOC “never agreed to 
arbitrate and is not bound by [the employee’s] agree- 
ment to arbitrate,” id. at 461, the private arbitration 
agreement does not “override the broad powers of the 
EEOC to obtain monetary remedies for violations of 
Title VII,” id. at 459. 

The court below acknowledged that its decision con- 
flicts with the Sixth Circuit’s decision in Frank’s Nur- 
sery. See App., infra, 15a. In both cases, an individual 
signed a pre-employment agreement to arbitrate, a 
discrimination dispute arose, and the employee did not 
seek arbitration. In both cases, the employee exercised 
the statutory right to file a charge with the EEOC, 
which investigated the claim and ultimately brought 
suit for, inter alia, victim-specific equitable relief 
and damages. But, while the Sixth Circuit in Frank’s 
Nursery held that the private agreement to arbitrate 
had no effect on the EEOC suit, including its request 
for victim-specific relief, the Fourth Circuit in this case 
held that the private agreement to arbitrate precluded 
the EEOC from seeking such victim-specific relief in 
federal court.4 

4 The Fourth Circuit also relied on decisions in which a 
charging party litigated or settled that party’s own discrimination 

17 

The fact that Frank’s Nursery arose from a Title VII 
race discrimination claim, while this case arises from an 
ADA claim of discrimination on the basis of disability, 
is of no consequence. Title I of the ADA—the title gov- 
erning employment discrimination—expressly incor- 
porates “[t]he powers, remedies, and procedures set 
forth in [Title VII].” 42 U.S.C. 12117(a). Thus, 42 
U.S.C. 2000e-5(g), which provides that a district court 
may order victim-specific equitable relief such as rein- 
statement and backpay, is applicable both in Title VII 
actions and in actions under the ADA. Moreover, the 
pertinent terms in 42 U.S.C. 1981a(a)(1) that authorize 
damages in Title VII cases are identical to the terms 
in 42 U.S.C. 1981a(a)(2) that authorize damages in cases 
brought under Title I of the ADA. 

b. The court below chose instead to follow the rea- 
soning of EEOC v. Kidder, Peabody & Co., 156 F.3d 298 
(1998), in which the Second Circuit held that a private 
arbitration contract barred an EEOC action for dam- 
ages. Kidder held that “an arbitration agreement be- 
tween an employer and employee precludes the EEOC 

claims and the EEOC also brought an action based on the same 
incident. See App., infra, 17a (citing EEOC v. Harris Chernin, 
Inc., 10 F.3d 1286 (7th Cir. 1993); EEOC v. Goodyear Aerospace 
Corp., 813 F.2d 1539 (9th Cir. 1987); EEOC v. U.S. Steel Corp., 921 
F.2d 489 (3d Cir. 1990)); see also Merrill Lynch, Pierce, Fenner 
and Smith, Inc. v. Nixon, No. 99-2635, 2000 WL 433245 (8th Cir. 
Apr. 24, 2000) (state agency). Those cases are inapposite, because 
they raise issues of res judicata and mootness not present in this 
case. Cf. General Tel., 446 U.S. at 333 (“It * * * goes without 
saying that the courts can and should preclude double recovery by 
an individual.”). In this case, Baker took no action that is 
inconsistent with his entitlement to the full relief sought by the 
EEOC in this action. Even if he chose arbitration as the forum in 
which to obtain such relief, that choice could not bind the EEOC to 
choose the same forum. 

18 

from seeking purely monetary relief for the employee 
under the ADEA in federal court,” id. at 300-301, al- 
though “the EEOC may seek injunctive relief in the 
federal forum for employees even when those em- 
ployees have entered into binding arbitration agree- 
ments,” id. at 302. The Second Circuit’s decision in 
Kidder, Peabody therefore also appears to conflict 
with the Sixth Circuit’s decision in Frank’s Nursery, 
although Kidder, Peabody arose in the slightly different 
context of the Age Discrimination in Employment Act 
of 1967 (ADEA), 29 U.S.C. 621 et seq. Under the 
ADEA’s enforcement scheme, unlike the scheme 
applicable to Title VII and the ADA, an employee has 
no right even to intervene once the EEOC has initiated 
an enforcement action in its own name. 29 U.S.C. 
626(c)(1). That has led some courts to conclude that the 
EEOC has “representative responsibilities when it 
seeks private benefits for an individual.” Kidder, Pea- 
body, 156 F.3d at 302 (quoting EEOC v. United States 
Steel Corp., 921 F.2d 489, 495 (3d Cir. 1990))—a 
conclusion with which we disagree, but which could if 
accepted lead to a different result in ADEA cases. 

3. The question presented in this case can be 
expected to recur frequently in the future. The 
EEOC filed 439 suits in fiscal year 1999. See 
http://www.eeoc.gov/stats/litigation.html (May 12, 
2000). In most of those cases, it sought victim-specific 
relief. Under the Fourth Circuit’s ruling in this case 
(and, arguably, the Second Circuit’s decision in Kidder, 
Peabody), such relief is not available in cases filed in the 
States comprising the Second and Fourth Circuits in 
the increasingly large number of instances in which pre- 
dispute arbitration agreements are a condition of 
employment. See Rosenberg v. Merrill Lynch, Pierce, 
Fenner & Smith, Inc., 995 F. Supp. 190, 199 n.12 (D. 

19 

Mass. 1998) (citing studies showing increase in pre- 
dispute employment arbitration agreements), aff’d, 170 
F.3d 1 (1st Cir. 1999). On the other hand, when the 
EEOC files a similar case in one of the States com- 
prising the Sixth Circuit, victim-specific relief is 
available under Frank’s Nursery. Further review is 
therefore warranted. 

4. There is a potential connection between this 
case and two petitions for certiorari currently pending 
on this Court’s docket—Circuit City Stores, Inc. v. 
Adams, No. 99-1379 (filed Feb. 16, 2000), and Circuit 
City Stores, Inc. v. Ahmed, No. 99- 1378 (filed Feb. 16, 
2000). Each of those cases presents the question 
whether contracts of employment such as the one in 
this case are outside the scope of the Federal Arbitra- 
tion Act, which contains an exclusion for “contracts of 
employment of seamen, railroad employees, or any 
other class of workers engaged in foreign or interstate 
commerce.” 9 U.S.C. 1 (emphasis added). In Gilmer v. 
Interstate/Johnson Lane Corp., 500 U.S. 20, 25 n.1 
(1991), this Court reserved the question whether that 
exclusion essentially applies to all contracts of em- 
ployment. The Ninth Circuit has since held that, as a 
result of the exclusion, “the FAA does not apply to 
labor or employment contracts.” Craft v. Campbell 
Soup Co., 177 F.3d 1083, 1094 (9th Cir. 1999). A 
number of other courts of appeals, however, have held 
to the contrary. See id. at 1086 n.6 (citing cases); App., 
infra, 41a (same). 

The question whether the FAA governs the contract 
in this case is not squarely presented by this petition. 
In the district court, the EEOC raised the question 
whether the exclusion applies to this case. See App., 
infra, 41a. By the time the case reached the Fourth 
Circuit, however, that court had “limited the section 1 

20 

exemption to seamen, railroad workers, and other 
workers actually involved in the interstate transporta- 
tion of goods.” O’Neil v. Hilton Head Hosp., 115 F.3d 
272, 274 (4th Cir. 1997). Accordingly, the EEOC did not 
present this issue to the court of appeals, and the court 
of appeals did not pass on it. It is therefore not before 
the Court on this petition. 

Nonetheless, if this Court were to grant certiorari in 
either of the Circuit City cases and then to rule that 
employment contracts like the one in this case are not 
covered by the FAA, it would substantially affect the 
analysis of the question presented here. The court of 
appeals’ holding that the EEOC could not seek victim- 
specific relief in this case was based on “the federal 
policy embodied in the FAA” to “favor the arbitration 
mechanism for dispute resolution.” App., infra, 14a. If 
the FAA does not cover employment agreements like 
the one in this case, however, such agreements would 
generally be subject to state law, which may embody 
different policies.5 Cf. Doctor’s Assocs., Inc. v. 
Casarotto, 517 U.S. 681 (1996) (where arbitration agree- 
ment is subject to FAA, state laws restricting arbitra- 
tion agreements inapplicable). In those circumstances, 
the applicable state law may well favor or disfavor 
arbitration, or it may restrict the availability of 
arbitration in certain circumstances. App., infra, 
46a (citing provisions of South Carolina law applicable 
specifically to arbitration agreements). Moreover, 

5 In the absence of the FAA, there is no other federal law that 
would appear to govern arbitration clauses in individual employ- 
ment contracts. Cf. Wright v. Universal Maritime Service Corp., 
525 U.S. 70, 77-78 & n.1 (1998) (noting “presumption of arbitrabil- 
ity” applicable to collective bargaining agreements under 29 U.S.C. 
185). 

21 

there would be a substantial question whether state 
laws that require enforcement of arbitration clauses in 
employment contracts were sufficient to override Con- 
gress’s provision of a federal judicial forum for those 
bringing employment-related claims under the federal 
antidiscrimination laws. 

Depending on the resolution of those issues, both the 
legal analysis of the question presented in this case 
(which, in the Fourth Circuit’s view, turned on the 
FAA’s policy favoring arbitration) and its practical sig- 
nificance (which would be lessened if federal anti- 
discrimination claims were not subject to arbitration 
clauses in employment agreements) could be substan- 
tially affected. Accordingly, the Court may wish to hold 
this petition pending disposition of the Circuit City 
cases. 

CONCLUSION 

The petition for a writ of certiorari should be 
granted. 

Respectfully submitted. 

C. GREGORY STEWART 

General Counsel 

PHILIP B. SKLOVER 

Associate General Counsel 

LORRAINE C. DAVIS 

Assistant General Counsel 

ROBERT J. GREGORY 

Senior Attorney 
Equal Employment 

Opportunity Commission 
SETH P. WAXMAN 

Solicitor General 

BARBARA D. UNDERWOOD 

Deputy Solicitor General 

JAMES A. FELDMAN 

Assistant to the Solicitor 

General 

MAY 2000 

APPENDIX A 

UNITED STATES COURT OF APPEALS 

FOURTH CIRCUIT 

No. 98-1502 

EQUAL EMPLOYMENT OPPORTUNITY 
COMMISSION, PLAINTIFF-APPELLEE 

v. 

WAFFLE HOUSE, INCORPORATED, 
DEFENDANT-APPELLANT 

Argued March 1, 1999 
Decided Oct. 6, 1999 

Before NIEMEYER and KING, Circuit Judges, and 
LEE, United States District Judge for the Eastern 
District of Virginia, sitting by designation. 

Affirmed in part, reversed in part, and remanded by 
published opinion. Judge NIEMEYER wrote the opinion, 
in which Judge LEE joined. Judge KING wrote a 
dissenting opinion. 

OPINION 

NIEMEYER, Circuit Judge: 

This appeal presents the question of first impression 
in this circuit whether and to what extent the Equal 
Employment Opportunity Commission (“EEOC”), in 
prosecuting a suit in its own name, is bound by a 

(1a) 

2a 

private arbitration agreement between the charging 
party and his employer. Other circuits are split on the 
proper response to this question. Compare EEOC v. 
Kidder, Peabody & Co., 156 F.3d 298 (2d Cir. 1998) 
(holding that an arbitration agreement between a 
charging party and an employer precludes the EEOC 
from seeking purely monetary relief in federal court on 
behalf of the charging party but not from seeking broad 
injunctive relief ), with EEOC v. Frank’s Nursery & 
Crafts, Inc., 177 F.3d 448 (6th Cir. 1999) (holding that a 
private arbitration agreement does not affect the scope 
of the EEOC’s federal court suit at all). 

Recognizing that the EEOC is vested with enforce- 
ment authority both to seek broad-based injunctive 
relief in the public interest and to seek “make-whole” 
relief on behalf of a charging party, we conclude (1) that 
the EEOC cannot be compelled, by reason of an arbitra- 
tion agreement between the charging party and his 
employer, to arbitrate its claims, but (2) that, to the 
extent that the EEOC seeks to obtain “make-whole” 
relief on behalf of a charging party who is subject to an 
arbitration agreement, it is precluded from seeking 
such relief in a judicial forum. Accordingly, we affirm 
the district court’s decision to deny Waffle House’s 
petition to compel arbitration generally and remand to 
the district court for consideration of the EEOC’s 
claims in light of this opinion. 

I 

On June 23, 1994, Eric Baker, who was seeking 
employment, entered the Waffle House facility located 
at exit 113 of Interstate 26 in Columbia, South Carolina, 
and proceeded to fill out and sign an application for 
employment with Waffle House, Inc. He left blank the 

3a 

space on the application asking what position he sought. 
The application included a provision requiring the 
applicant to submit to binding arbitration “any dispute 
or claim concerning Applicant’s employment with 
Waffle House, Inc., or any subsidiary or Franchisee of 
Waffle House, Inc., or the terms, conditions or benefits 
of such employment.” Although the manager at that 
Waffle House facility, Lee Motlow, asked Baker 
whether he wanted the job there, Baker declined and 
instead, called the manager of a nearby Waffle House 
facility located at exit 110 of Interstate 26 in West 
Columbia, to whom Motlow had referred Baker.6 The 
West Columbia Waffle House manager interviewed 
Baker and hired him to begin work two weeks later. 
Baker did not fill in another application and began work 
in the West Columbia facility on August 10, 1994, as a 
grill operator. 

At his home, approximately two weeks later, Baker 
suffered a seizure, ostensibly caused by a change in the 
medication he was taking to control a seizure disorder 
that had developed as a result of a 1992 automobile 
accident. The next day, just after arriving for work, 
Baker suffered another seizure. Waffle House dis- 
charged Baker on September 5, 1994, stating in the 
separation notice that “We decided that for [Baker’s] 

6 In its answers to interrogatories, the EEOC stated more 
particularly: “Shortly after he had spoken with Motlow, Baker 
called the Manager at the Waffle House to which Motlow had 
referred him. The Manager interviewed Baker and hired him to 
work in another nearby Waffle House, Unit # 446 in West 
Columbia. Baker visited Unit # 446 and spoke with the Manager, 
Mike Bradley. They agreed that Baker would start two weeks 
later.” J.A. at 13. 

4a 

benefit and safety and Waffle House it would be best he 
not work any more.” 

Baker filed a charge with the EEOC, complaining 
that his discharge violated the Americans With Dis- 
abilities Act of 1990 (“ADA”), and on September 9, 
1996, the EEOC filed this enforcement action in its own 
name against Waffle House pursuant to § 107(a) of the 
ADA, 42 U.S.C. § 12117(a), and § 102 of the Civil Rights 
Act of 1991, 42 U.S.C. § 1981a, alleging that Waffle 
House had engaged in “unlawful employment practices 
at its West Columbia, South Carolina, facility.” The 
EEOC stated in its complaint that its purpose for filing 
the suit was “to correct unlawful employment practices 
on the basis of disability and to provide appropriate 
relief to Eric Scott Baker, who was adversely affected 
by such practices.” It sought as relief (1) a permanent 
injunction barring Waffle House from engaging in 
employment practices that discriminate on the basis of 
disability; (2) an order that Waffle House institute and 
carry out antidiscrimination policies, practices, and 
programs to create opportunities and to eradicate the 
effects of past and present discrimination on the basis 
of disability; (3) backpay and reinstatement for Baker; 
(4) compensation for pecuniary and non-pecuniary 
losses suffered by Baker; and (5) punitive damages. 

In response to the complaint, Waffle House filed a 
petition under the Federal Arbitration Act (“FAA”), 9 
U.S.C. § 1 et seq., to compel arbitration and to stay the 
litigation and, alternatively, to dismiss the action under 
Federal Rule of Civil Procedure 12(b)(6). The motion 
was referred to a magistrate judge who—relying on the 
undisputed record consisting of the complaint, answers 
to interrogatories, and affidavits filed in connection 

5a 

with the motion to compel arbitration—recommended 
to the district court that it conclude that Baker had 
entered into an arbitration agreement with Waffle 
House and that the EEOC was required to arbitrate 
the claims it filed on behalf of Baker. The district court, 
relying on the facts “extrapolated from the pleadings,” 
disagreed with the magistrate judge’s recommenda- 
tions and denied each of Waffle House’s motions, 
concluding that the arbitration provision contained in 
Baker’s employment application was inapplicable be- 
cause the West Columbia Waffle House facility, which 
ultimately hired Baker, had not hired him pursuant to 
his earlier application submitted at the Columbia 
Waffle House facility. 

Waffle House filed this interlocutory appeal challeng- 
ing the district court’s denial of its petition to compel 
arbitration and to stay proceedings. See 9 U.S.C. 
§ 16(a)(1). On appeal, it argues that (1) contrary to the 
district court’s holding, a valid, enforceable arbitration 
agreement existed between Baker and Waffle House 
and (2) its motion to compel arbitration under § 4 of the 
FAA should be granted because the arbitration agree- 
ment between Baker and Waffle House binds the 
EEOC to “assert Baker’s claim in an arbitral forum.” 

II 

Because arbitration is a matter of contract, we must 
first determine whether an enforceable arbitration 
agreement governed Baker’s employment with Waffle 
House. See Johnson v. Circuit City Stores, Inc., 148 
F.3d 373, 377 (4th Cir. 1998). The district court con- 
cluded that the arbitration agreement in Baker’s em- 
ployment application did not govern his employment 
relationship with Waffle House because it was sub- 

6a 

mitted to the Waffle House facility at exit 113 of Inter- 
state 26 in Columbia, and Baker was not ultimately 
employed at that facility. When Baker later went to 
the Waffle House facility at exit 110 of Interstate 26 in 
West Columbia, he was given a job there without sub- 
mitting another application. The court thus concluded, 
“it does not appear that Baker’s acceptance of employ- 
ment at the West Columbia Waffle House was made 
pursuant to the written application which included the 
agreement to arbitrate.” 

We disagree with the district court’s analysis because 
it assumes that the two Waffle House facilities were 
legally distinct entities in this context. The employ- 
ment application Baker completed was the standard 
form application for employment with the corporation 
Waffle House, Inc., and not with an individual Waffle 
House facility. Indeed, the manager at the Columbia 
Waffle House facility referred Baker to the manager at 
the West Columbia Waffle House facility. In filling out 
the application, Baker left blank the space provided on 
the form for listing specific positions applied for, and he 
specified no intent to limit the application to a particu- 
lar location. Moreover, when Baker did begin work at 
the West Columbia facility, he did not fill out another 
application. It cannot be assumed that a national corpo- 
ration like Waffle House hired an individual without 
gathering any of the requisite information, such as his 
proper name, address, social security number, age and 
other personal data, qualifications, and references, all of 
which were contained in the application Baker origi- 
nally submitted at the Waffle House facility in 
Columbia. 

7a 

Accordingly, the fact that Baker was ultimately 
employed at a different facility than the one at which he 
was physically present when he completed the applica- 
tion is immaterial to the applicability of the arbitration 
agreement. The generic, corporation-wide employment 
application completed and signed by Baker, and the 
arbitration provision it contained, followed Baker to 
whichever facility of Waffle House hired him. We thus 
conclude that Baker’s application, when accepted by 
Waffle House, did form a binding arbitration agreement 
between Baker and Waffle House. 

Having reached that conclusion, however, we must 
still determine what effect, if any, the binding arbitra- 
tion agreement between Baker and Waffle House has 
on the EEOC, which filed this action in its own name 
both in the public interest and on behalf of Baker. 

III 

In its motion to compel arbitration, Waffle House 
sought “to enforce the arbitration agreement between 
Waffle House and Baker and compel the EEOC, on 
behalf of Baker, to submit Baker’s employment related 
dispute with Waffle House to arbitration.” On appeal, 
it continues to maintain that “[i]t is of no consequence 
under the FAA that the EEOC is bringing this action 
on behalf of Baker rather than Baker bringing this 
action directly” because the EEOC is “bound by 
Baker’s arbitration agreement with Waffle House.” 
The EEOC characterizes Waffle House’s argument as 
“an astounding proposition.” It argues that not only did 
it “never agree[ ] to arbitrate its statutory claim,” but 
also that the EEOC “has independent statutory author- 
ity to bring suit in any federal district court where 
venue is proper.” We agree with the EEOC. 

8a 

In enforcing the federal antidiscrimination laws, the 
EEOC does not act merely as a proxy for the charging 
party but rather seeks to “advance the public interest 
in preventing and remedying employment discrimina- 
tion.” General Tel. Co. of the Northwest, Inc. v. EEOC, 
446 U.S. 318, 331, 100 S. Ct. 1698, 64 L.Ed.2d 319 (1980). 
The EEOC’s independent authority to enforce the ADA 
is clear. 

In enacting the ADA, Congress chose to incorporate 
the enforcement “powers, remedies, and procedures” of 
Title VII of the Civil Rights Act of 1964. 42 U.S.C. § 
12117(a) (incorporating by reference 42 U.S.C. §§ 
2000e-4, -5, -6, -8, -9). These Title VII mechanisms vest 
the EEOC with broad authority to enforce, in federal 
court, the statute’s ban on disability-based discrimina- 
tion. See 42 U.S.C. § 2000e-5(f )(1), (f )(3). Under Title 
VII as originally enacted, the EEOC’s powers were 
limited to investigation and conciliation, and Congress 
relied exclusively on private parties’ suits for enforce- 
ment. In 1972, however, seeking to remedy widespread 
noncompliance under this enforcement system, Con- 
gress amended Title VII, according the EEOC the 
right to file suit in federal court in its own name to 
eradicate discriminatory employment practices. See 
General Tel., 446 U.S. at 325-26, 100 S. Ct. 1698. 
Although the amendments created a dual system of 
private and government enforcement, we have long 
recognized that “it was clear that Congress intended by 
these [1972] Amendments to place primary reliance 
upon the powers of enforcement to be conferred upon 
the Commission . . . and not upon private law suits, to 
achieve equal employment opportunity.” EEOC v. 
General Elec. Co., 532 F.2d 359, 373 (4th Cir. 1976) 
(internal quotation marks and citation omitted). 

9a 

Because of this public mission, the EEOC cannot be 
viewed as merely an institutional surrogate for individ- 
ual victims of discrimination. See General Tel., 446 U.S. 
at 326, 100 S. Ct. 1698 (holding that “the EEOC’s en- 
forcement suits should not be considered representa- 
tive actions subject to Rule 23”). “[U]nlike the individ- 
ual charging party, the EEOC [sues] ‘to vindicate the 
public interest’ as expressed in the Congressional 
purpose of eliminating employment discrimination as a 
national evil rather than for the redress of the strictly 
private interests of the complaining party.” General 
Elec., 532 F.2d at 373 (quoting EEOC v. Kimberly- 
Clark Corp., 511 F.2d 1352, 1361 (6th Cir. 1975)); see 
also EEOC v. Harris Chernin, Inc., 10 F.3d 1286, 1291 
(7th Cir. 1993) (concluding that because the EEOC’s 
“interests are broader than those of the individuals 
injured by discrimination . . . private litigants cannot 
adequately represent the government’s interest in 
enforcing the prohibitions of federal statutes” (citations 
omitted)); EEOC v. U.S. Steel Corp., 921 F.2d 489, 496 
(3d Cir. 1990) (observing that “[p]rivate litigation in 
which the EEOC is not a party cannot preclude the 
EEOC from maintaining its own action because private 
litigants are not vested with the authority to represent 
the EEOC” (citations omitted)); EEOC v. United 
Parcel Serv., 860 F.2d 372 (10th Cir. 1988); EEOC v. 
Goodyear Aerospace Corp., 813 F.2d 1539 (9th Cir. 
1987). 

The statutory structure of Title VII’s enforcement 
remedies (and therefore those of the ADA) reflects the 
notion that the scope of the public interest exceeds that 
of the individual’s interest. In order to preserve the 
EEOC’s authority to litigate selectively those cases 
which it believes will have the most significant public 

10a 

impact, a charging party “may not proceed to federal 
district court until . . . the EEOC has made its own 
determination as to the validity of complainant’s claim 
and issued a right-to-sue letter.” Davis v. North 
Carolina Dep’t of Correction, 48 F.3d 134, 138 (4th Cir. 
1995). And if the EEOC chooses to file suit, the 
charging party may not bring his own suit; his right is 
then limited to intervening in the EEOC’s suit. See 42 
U.S.C. § 2000e-5(f )(1). In a similar vein, when a private 
individual brings suit, the court may, under certain cir- 
cumstances, permit the EEOC to intervene to protect 
the national interest. See id. In addition, once the 
EEOC decides to sue in its own name, it is not limited 
to the facts presented in the charge. Rather, the EEOC 
may sue based on “[a]ny violations that [it] ascertains in 
the course of a reasonable investigation of the charging 
party’s complaint.” General Tel., 446 U.S. at 331, 100 
S.Ct. 1698; see also General Elec., 532 F.2d at 370. 
Finally, the EEOC’s independent interest is also re- 
flected in the fact that a charging party may not with- 
draw his charge without the consent of the EEOC. See 
29 C.F.R. § 1601.10. 

Even while empowering the EEOC to sue on a 
charge independently, Congress preserved the individ- 
ual’s private remedies under Title VII, indicating that 
private suits are still appropriate to redress individuals’ 
grievances. And even when the EEOC has determined 
to bring suit in its own name, the charging party retains 
“the right to intervene in a civil action brought by the 
Commission” if the individual believes that the EEOC 
will not adequately represent his interests as it pursues 
its public objectives. See 42 U.S.C. § 2000e-5(f )(1); com- 
pare 29 U.S.C. § 626(c)(1) (terminating an individual’s 
right to sue under the ADEA upon the EEOC’s com- 

11a 

mencement of an action to enforce that individual’s 
rights).7 Congress anticipated that the EEOC would 
not always be able to achieve the best possible result 
for each individual while at the same time pursuing its 
mission to vindicate the public interest. See General 
Tel., 446 U.S. at 331, 100 S. Ct. 1698 (noting that the 
EEOC “is authorized to . . . obtain the most 
satisfactory overall relief even though competing 
interests are involved” and that it must make “the hard 
choices where conflicts of interest exist”). 

In short, under the 1972 amendments to Title VII, 
which are incorporated into the ADA, Congress has 
created a dual enforcement system, reflecting the 
notion that the EEOC and the charging party are not 
interchangeable plaintiffs. Each has its own distinct, 
albeit overlapping, interests for which overlapping 
remedies are provided. Thus, in pursuing the inquiry 
into whether the EEOC can be compelled to arbitrate 
on the basis of an arbitration agreement binding the 
charging party, we do not take the EEOC as a surro- 
gate for the charging party, subrogated to his interest. 
Rather, we examine the related, but independent, 
interests of both the EEOC and the charging party to 
determine how an arbitration agreement signed by the 
charging party affects the prosecution of a claim by the 
EEOC. 

7 In concluding that this “distinctive enforcement scheme of the 
ADEA” illustrates the EEOC’s “representative responsibilities 
when it initiates litigation to enforce an employee’s rights,” the 
Third Circuit expressly noted that the enforcement scheme of Title 
VII “from which the framers of the ADEA consciously departed 

. . . has no similar feature.” U.S. Steel, 921 F.2d at 494 & n.4. 

12a 

First, we must recognize that neither the ADA nor 
Title VII as incorporated therein requires the EEOC to 
arbitrate. On the contrary, as demonstrated above, the 
1972 amendments to Title VII clearly show that Con- 
gress intended that the EEOC vindicate the public 
interest by conciliation and then by suit in federal court. 
We must also recognize that in this case the EEOC is 
not a party to any arbitration agreement. See AT & T 
Technologies, Inc. v. Communications Workers of Am., 
475 U.S. 643, 648-49, 106 S. Ct. 1415, 89 L.Ed.2d 648 
(1986); Arrants v. Buck, 130 F.3d 636, 640 (4th Cir. 
1997) (explaining that “[e]ven though arbitration has a 
favored place, there still must be an underlying agree- 
ment between the parties to arbitrate” (citation 
omitted)). Thus, the only argument Waffle House could 
advance to require the EEOC to arbitrate is that the 
EEOC’s interest in enforcing the ADA is derivative of 
Baker’s interest. This argument, however, disregards 
the EEOC’s independent statutory role as we have 
outlined it. 

In addition, contrary to Waffle House’s claims, 
neither of the other two circuits that have addressed 
the question of the impact of a private arbitration 
agreement on the EEOC’s ability to sue in its own 
name have concluded that such an agreement permits a 
court to force the EEOC into arbitration under the 
FAA. See Frank’s Nursery, 177 F.3d at 462 (observing 
that “courts may not treat the agreement of a private 
party to arbitrate her action as the agreement of the 
EEOC to arbitrate its action”); Kidder, Peabody, 156 
F.3d at 301-02 (upholding the district court’s grant of 
the employer’s motion to dismiss the EEOC’s ADEA 
suit seeking solely monetary damages but not address- 

13a 

ing the issue of compelling the EEOC to arbitrate 
because the employer did not seek to do so). 

Moreover, the Supreme Court has recognized implic- 
itly that the EEOC, acting in its public role, is not 
bound by private arbitration agreements. See Gilmer 

v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S. 
Ct. 1647, 114 L.Ed.2d 26 (1991) (holding that an em- 
ployee’s private arbitration agreement with her em- 
ployer precluded her from filing suit against the 
employer under the ADEA). Although a private arbi- 
tration agreement does bar an individual ADEA claim- 
ant from asserting her claim in court, it does not 
prevent her from filing a charge with the EEOC. See 
id. at 28, 111 S. Ct. 1647. This rule demonstrates the 
Court’s recognition that the EEOC’s suit can accom- 
plish aims—namely, combating discrimination on a 
societal level—that an individual’s suit is not equipped, 
nor perhaps intended, to accomplish. The court also 
emphasized, in refuting the argument that enforcing 
arbitration agreements would undercut the statutory 
scheme, that “it should be remembered that arbitration 
agreements will not preclude the EEOC from bringing 
actions seeking class-wide and equitable relief.” Id. at 
32, 111 S. Ct. 1647. Thus, it is apparent that the Court 
did not intend that when an individual who is subject to 
an arbitration agreement files a charge, the EEOC can 
only pursue relief in an arbitral forum. To the contrary, 
the Court appears to have contemplated that arbitra- 
tion agreements between charging parties and their 
employers would not infringe on the EEOC’s statutory 
duty to enforce the antidiscrimination laws in court. 

Accordingly, we conclude that Waffle House cannot 
succeed on its motion to compel the EEOC to arbitrate. 

14a 

IV 

While we have thus observed that the important role 
of the EEOC in vindicating the public interest in pre- 
venting and eradicating workplace discrimination is not 
to be restricted by arbitration agreements to which it is 
not a party, its role in vindicating in federal court the 
individual interests of the charging party implicates the 
competing federal policy favoring the enforcement of 
arbitration agreements. 

When an individual and an employer agree to submit 
employment disputes to arbitration, it is the federal 
policy to give that contract effect in order to favor the 
arbitration mechanism for dispute resolution. See 9 
U.S.C. § 2; Moses H. Cone Mem’l. Hosp. v. Mercury 
Constr. Corp., 460 U.S. 1, 24, 103 S. Ct. 927, 74 L.Ed.2d 
765 (1983). To permit the EEOC to prosecute in court 
Baker’s individual claim—the resolution of which he 
had earlier committed by contract to the arbitral 
forum—would significantly trample this strong policy 
favoring arbitration. Because Baker’s own suit in court 
to enforce his ADA claim would be barred by his 
contract and by the federal policy embodied in the 
FAA, only a stronger, competing policy could justify 
allowing the EEOC to do for Baker what Baker could 
not have done himself. The EEOC’s public mission to 
eradicate and to prevent discrimination may be such a 
policy in certain contexts, see Gilmer, 500 U.S. at 28, 
111 S. Ct. 1647, but, as we conclude herein, it cannot 
outweigh the policy favoring arbitration when the 
EEOC seeks relief specific to the charging party who 
assented to arbitrate his claims. Although the EEOC 
acts in the public interest, even when enforcing only the 
charging party’s claim, cf. Albemarle Paper Co. v. 

15a 

Moody, 422 U.S. 405, 417-18, 95 S. Ct. 2362, 45 L.Ed.2d 
280 (1975), the public interest aspect of such a claim is 
less significant than an EEOC suit seeking large-scale 
injunctive relief to attack discrimination more 
generally. 

Recognizing these competing policies, we agree with 
the balance struck by the Second Circuit, which held 
that although the EEOC “may seek injunctive relief in 
the federal forum for employees even when those 
employees have entered into binding arbitration agree- 
ments,” it may not pursue relief in court—in that case, 
monetary relief—specific to individuals who have 
waived their right to a judicial forum by signing an 
arbitration agreement. Kidder, Peabody, 156 F.3d at 
302-03; but see Frank’s Nursery, 177 F.3d at 459-67 
(holding that neither the FAA nor principles of 
preclusion or waiver could operate to bar the EEOC 
from seeking monetary relief on behalf of aggrieved 
individuals). When the EEOC seeks “make-whole” 
relief for a charging party, the federal policy favoring 
enforcement of private arbitration agreements out- 
weighs the EEOC’s right to proceed in federal court 
because in that circumstance, the EEOC’s public 
interest is minimal, as the EEOC seeks primarily to 
vindicate private, rather than public, interests. On the 
other hand, when the EEOC is pursuing large-scale 
injunctive relief, the balance tips in favor of EEOC 
enforcement efforts in federal court because the public 
interest dominates the EEOC’s action. 

Thus, we hold that to the extent that the EEOC 
seeks “a permanent injunction enjoining [Waffle House] 
from discharging individuals and engaging in any other 
employment practice which discriminates on the basis 

16a 

of disability” and an order to Waffle House “to institute 
and carry out policies, practices, and programs which 
provide equal employment opportunities for qualified 
individuals with disabilities, and which eradicate the 
effects of its past and present unlawful employment 
practices,” the EEOC is pursuing the public interest in 
a discrimination-free workplace, and it must be allowed 
to do so in federal court, as authorized by the ADA, 
notwithstanding the charging party’s agreement to 
arbitrate. In seeking to “vindicate rights belonging to 
the United States as sovereign,” EEOC v. Goodyear 
Aerospace Corp., 813 F.2d 1539, 1543 (9th Cir. 1987) 
(internal quotation marks and citation omitted), which 
are not necessarily identical to the interests of the indi- 
vidual charging party, the EEOC’s course of conduct 
should not be affected by the actions of an individual in 
entering into a private arbitration agreement. See Part 
III, supra. In similar contexts where charging parties 
have been deprived of their right to sue either by 
settling their claims or having their claims dismissed, 
courts have nevertheless permitted the EEOC to 
maintain a suit for injunctive relief. See, e.g., EEOC v. 
Massey Yardley Chrysler Plymouth, Inc., 117 F.3d 
1244, 1253 (11th Cir. 1997) (noting that “there would be 
little point in [the EEOC] having the independent 
power to sue if it could not obtain relief beyond that 
fashioned for the individual claimant”); EEOC v. Harris 
Chernin, Inc., 10 F.3d 1286, 1291-92 (7th Cir. 1993); 
Goodyear Aerospace, 813 F.2d at 1542-45. 

Conversely, however, in these same contexts some of 
the same courts have recognized that a charging party’s 
actions that impede his own right to sue can also 
circumscribe the contours of the EEOC’s suit in its own 
name to the extent that it acts on behalf of the charging 

17a 

party. See, e.g., Goodyear Aerospace, 813 F.2d at 1543 
(holding that the charging party’s acceptance of a 
personal settlement of her claims rendered moot the 
EEOC’s claims for backpay on her behalf); EEOC v. 
U.S. Steel Corp., 921 F.2d 489, 496 (3d Cir. 1990) (hold- 
ing that the doctrine of res judicata barred the EEOC 
from seeking “individualized benefits” under the ADEA 
on behalf of individuals whose own suits were unsuc- 
cessful because the EEOC was “in privity” with those 
individuals); Harris Chernin, 10 F.3d at 1291 (following 
U.S. Steel’s reasoning with regard to the EEOC’s claim 
for backpay, liquidated damages, and reinstatement for 
an individual whose suit was dismissed as barred by the 
statute of limitations). 

Similarly, we also hold that when the EEOC enforces 
the individual rights of Baker by seeking backpay, 
reinstatement, and compensatory and punitive dam- 
ages, it must recognize Baker’s prior agreement to 
adjudicate those rights in the arbitral forum. Because 
the EEOC maintains that it “has no intention” of pursu- 
ing a claim in arbitration, we do not reach the question 
of whether the EEOC is authorized to do so. But it 
cannot pursue Baker’s individual remedies in court, 
although it may seek broad injunctive relief in its public 
enforcement role. 

Accordingly, we affirm the district court’s order to 
the extent that it denied Waffle House’s motions to 
compel the EEOC to arbitrate and to dismiss this 
action. We reverse its ruling that the EEOC may pro- 
secute Baker’s individual claims in court. And we 
remand with instructions to the district court to dis- 
miss, without prejudice, the EEOC’s claims asserted on 

18a 

behalf of Baker individually and to permit the EEOC to 
move forward on its claims for broad injunctive relief.8 

AFFIRMED IN PART, REVERSED IN PART, AND 

REMANDED 

KING, Circuit Judge, dissenting: 

Because I agree with the district court that there 
was no agreement to arbitrate in this case, I must 
respectfully dissent. I would, therefore, without reach- 
ing the issue of the authority of the EEOC to seek 
injunctive and “make-whole” relief for Mr. Baker on his 
ADA claim, simply affirm the decision of the district 
court. 

I. 

On June 23, 1994, Mr. Baker completed an employ- 
ment application at a Waffle House restaurant in 
Columbia, South Carolina (“Columbia Waffle House” or 
“CWH”).9 The district court found that the manager of 

8 Waffle House argues that the EEOC is not entitled to broad 
injunctive relief because its claim relies exclusively on the incident 
involving Baker. We leave to the district court the question of 
whether the EEOC has pled sufficient facts to warrant the equit- 
able relief it seeks. See 42 U.S.C. § 2000e-5(g)(1). 

9 The employment application completed by Mr. Baker contains 
a mandatory arbitration provision, which is comprised of four lines 
of single-spaced text located at the bottom of the first page of a 

two-page application. It states in full: 

The parties agree that any dispute or claim concerning appli- 
cant’s employment with Waffle House, Inc., or any subsidiary 
or Franchisee of Waffle House, Inc., or the terms, conditions or 
benefits of such employment, including whether such dispute 
or claim is arbitrable, will be settled by binding arbitration. 

19a 

the CWH offered Mr. Baker a job on that occasion, 
which Mr. Baker did not accept. 

Approximately three weeks later, Mr. Baker 
traveled to a different Waffle House restaurant, one 
located in West Columbia, South Carolina (“West 
Columbia Waffle House” or “WCWH”), where, the 
district court found, Mr. Baker “orally applied for a job 
and was orally given a job which he accepted.” J.A. 137. 
Mr. Baker did not execute a written employment appli- 
cation at the WCWH. Indeed, there is no evidence that 
the terms of the employment application that Mr. 
Baker completed at the CWH were discussed or 
adopted by Mr. Baker and Mike Bradley, the WCWH 
manager who hired Mr. Baker. Since there was no 
evidence on the point, the district court found that it 
did not appear that the “management [of WCWH] knew 
of or had the benefit of the application form which 
Baker had previously signed.” J.A. 137-38. 

The arbitration proceedings shall be conducted under the 
Commercial Arbitration Rules of the American Arbitration 
Association in effect at the time a demand for arbitration is 
made. A decision and award of the arbitrator made under the 
said rules shall be exclusive, final and binding on both parties, 
their heirs, executors, administrators, successors and assigns. 
The costs and expenses of the arbitration shall be borne evenly 
by the parties. 

This provision, printed in seven-point font, occupies merely 5/16 of 
an inch of a page that is eleven inches long. No other clause in the 
employment application is printed in as small a font size. 

20a 

The district court made no findings connecting the 
WCWH offer to the CWH offer that Baker had 
rejected. 

10 Further, the district court’s affirmative 
rejection of the magistrate judge’s findings, see supra 
note 2, is, in itself, a factual finding that requires our 
deference. The district court’s “[f]indings of fact, 
whether based on oral or documentary evidence, shall 
not be set aside [on appeal] unless clearly erroneous.” 
Fed.R.Civ.P. 52(a). Findings of fact may be overturned 
only if we are “left with the definite and firm conviction 
that a mistake has been committed.” Anderson v. City 

10 In its written opinion of March 20, 1998, from which this 
appeal is taken, the district court found and concluded as follows: 

[T]his Court sua sponte inquired concerning the existence of 

evidence that Baker and Waffle House made an agreement to 
arbitrate with respect to the job he accepted. The facts stated 
by the Magistrate Judge which are extrapolated from the 
pleadings do not suggest that an employment agreement came 
into being following Baker’s signing of the application form on 
June 23, 1994. Baker left the Columbia Waffle House without 
accepting employment. It does not appear from the statement 
of facts relied upon by the Magistrate Judge that when Baker 
went to the West Columbia, South Carolina Waffle House, the 
management there knew of or had the benefit of the applica- 
tion form which Baker had previously signed. Instead, it 
appears that Baker orally applied for and was orally given a 
job which he accepted. That being the case, it does not appear 
that Baker’s acceptance of employment at the West Columbia 
Waffle House was made pursuant to the written application 
which included the agreement to arbitrate. For that reason, I 
am unable to agree with that portion of the Magistrate Judge’s 
conclusions. 

J.A. 137-38. Significantly, the district court expressly rejected the 
magistrate judge’s conclusion that Baker “appear[ed] to have as- 
sented to be bound by the prior agreement, that if employed he 
would submit his claim to arbitration,” by Baker’s subsequent 
acceptance of employment at the WCWH. 

21a 

of Bessemer City, N.C., 470 U.S. 564, 573-74, 105 S. Ct. 
1504, 84 L.Ed.2d 518 (1985). 

11 The majority wrongly 
implies that an appellate court may consider and adopt 
facts found by a magistrate judge—facts already ex- 
pressly rejected by the district court—without finding 
such facts to be clearly erroneous. 

12 

Based on its factual findings, the district court con- 
cluded that Mr. Baker and Waffle House had not made 
an agreement to arbitrate with respect to the job that 
he ultimately accepted—the position of grill operator at 
the West Columbia Waffle House. Consequently, the 
district court denied Waffle House’s motion to compel 
arbitration and its motion to dismiss. 

11 See also Fed.R.Civ.P. 52 advisory committee’s note (1985) 
(public interest recognizes the trial court, not the appellate tribu- 
nal, as the fact-finder, to promote stability and judicial economy). 
When a court of appeals actively engages in the fact-finding func- 
tion, it undermines the legitimacy of the district courts. Id. 

12 While the majority asserts that the EEOC interrogatory 
answers support its factual scenario, see ante p. [3a] note 1, these 
answers are legally irrelevant for at least three reasons: (1) they 
are invalid because they were not made under oath (as required by 
Rule 33(b) of the Federal Rules of Civil Procedure); (2) they are 
signed by counsel only (not by Baker, who had the requisite per- 
sonal knowledge); and (3) their evidentiary value was repudiated 
by the EEOC at oral argument. Bracey v. Grenoble, 494 F.2d 566, 
570 n. 7 (3rd Cir. 1974). Accordingly, these answers could not and 
cannot be properly relied on in this case. See id. Most importantly, 
subsequently filed affidavits (properly sworn) do not contain the 
information relied upon by the majority, see J.A. 12, 28, and that 
information is contrary to the findings of the district court. See 
supra note 2. As I have noted, the majority has not determined 
the factual findings of the district court to be clearly erroneous. 

22a 

The district court’s findings of fact are not clearly 
erroneous, and its conclusion that there was no agree- 
ment to arbitrate follows perforce from its findings. 
Accordingly, I would affirm the district court’s order 
denying Waffle House’s motions to dismiss and compel 
arbitration, thereby enabling the EEOC to pursue 
injunctive and “make-whole” relief on behalf of Mr. 
Baker. 

II. 

A. 

The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1, et 
seq., which governs here, represents “a liberal federal 
policy favoring arbitration agreements.” Moses H. 
Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 
1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). Where there 
is a valid agreement to arbitrate that covers the matter 
in dispute, the FAA requires federal courts to stay any 
ongoing judicial proceedings and compel arbitration. 
See Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 937 
(4th Cir. 1999) (citing the FAA, 9 U.S.C. §§ 3, 4). 

But the mandate and policy concerns of the FAA 
come into play only if the claims at issue are arbitrable 
in the first instance, and if there is a valid agreement to 
arbitrate. See Phillips, 173 F.3d at 937-38. This court 
has held that a claim such as Baker’s is arbitrable; the 
ADA does not prohibit arbitration of a claim arising 
under that statute. See Austin v. Owens-Brockway 
Glass Container, Inc., 78 F.3d 875, 881 (4th Cir. 1996) 
(“The language of the [ADA] could not be any more 
clear in showing Congressional favor towards arbitra- 
tion.”); see also Phillips, 173 F.3d at 937. However, the 
question remains whether Mr. Baker and Waffle House 

23a 

entered into an agreement to arbitrate that would 
require Mr. Baker to arbitrate any ADA claim arising 
from his employment at the WCWH. 

Whether a contract to arbitrate exists is “an issue for 
judicial determination to be decided as a matter of 
contract.” Johnson v. Circuit City Stores, 148 F.3d 373, 
377 (4th Cir. 1998) (citing AT & T Techs., Inc. v. Com- 
munications Workers of Am., 475 U.S. 643, 648-49, 106 
S. Ct. 1415, 89 L.Ed.2d 648 (1986)). In deciding this 
issue, we should apply “ordinary state-law principles 
that govern the formation of contracts.” Johnson, 148 
F.3d at 377 (quoting First Options of Chicago, Inc. v. 
Kaplan, 514 U.S. 938, 944, 115 S. Ct. 1920, 131 L.Ed.2d 
985 (1995)). 

South Carolina law supports the district court’s con- 
clusion here. In recognition of the fact that Mr. Baker 
did not accept the offer of employment at the CWH, the 
district court held that “no employment agreement 
came into being following Baker’s signing of the appli- 
cation form on June 23, 1994.” The formation of con- 
tracts under South Carolina law “is governed by well- 
settled principles.” Carolina Amusement Co. v. Con- 
necticut Nat’l Life Ins. Co., 313 S.C. 215, 437 S.E.2d 
122, 125 (1993). 

Quite simply, [a] contract exists where there is an 
agreement between two or more persons upon suffi- 
cient consideration either to do or not to do a par- 
ticular act. Stated another way, there must be an 
offer and an acceptance accompanied by valuable 
consideration. 

Id. (internal citations and quotation marks omitted). 

24a 

When the manager at the Columbia Waffle House 
offered Mr. Baker a job, the terms of that offer included 
the provisions of the employment application, which 
Mr. Baker had completed in the restaurant on June 23, 
1994, while the restaurant manager was sitting next to 
him. Those terms were part of the “bargained-for ex- 
change” offered by the manager of the CWH. 

13 “An 
offer is the manifestation of willingness to enter into a 
bargain, so made as to justify another person in under- 
standing that his assent to that bargain is invited and 
will conclude it.” Restatement (Second) of Contracts 
§ 24 (1981); see also Prescott v. Farmers Tel. Coop., 335 
S. C. 330, 516 S.E.2d 923, 926 (1999). “The offer identi- 
fies the bargained for exchange and creates a power of 
acceptance in the offeree.” Carolina Amusement, 437 
S.E.2d at 125 (citations omitted). Without an acceptance 
of an offer, there can be no contract. Id.; see also 
Restatement (Second) of Contracts § 35 cmt. c. 

Because Mr. Baker declined to accept the job offered 
on June 23, 1994, by the manager of the CWH, no 
employment agreement was formed. Id. Under settled 
legal principles, the terms of the rejected offer, 
including the provisions of the employment application, 

13 Indeed, at the top of the application in large, bold, capital 
letters, Waffle House states the following requirement: 

MUST BE COMPLETED IN THE RESTAURANT 

J.A. 26. The choice of the definite article “the” is telling. Which 
restaurant must the application form be completed in? The answer 
is obvious—the Waffle House restaurant to which the job applicant 
is applying. 

In Mr. Baker’s case, he did just what the form required—he 
completed the employment application in the Columbia Waffle 
House—the restaurant to which he was applying when he filled out 
the application. 

25a 

did not survive the rejection of the offer. Mr. Baker’s 
power of acceptance of that offer was terminated by his 
rejection of it. See Restatement (Second) of Contracts 
§§ 36, 38 (when offeree rejects offer, his power of 
acceptance is terminated). 

When Mr. Baker, three weeks later, traveled to the 
West Columbia Waffle House and orally applied for a 
job there, its manager, Mr. Bradley, made Mr. Baker an 
offer for a job as a grill operator at $5.50 an hour. Mr. 
Baker accepted Mr. Bradley’s offer on the spot. There 
is no evidence that the provisions of the June 23, 1994 
employment application were adopted, or even dis- 
cussed, as part of the employment agreement that came 
into being three weeks later at the West Columbia 
Waffle House. See Player v. Chandler, 299 S.C. 101, 
382 S.E.2d 891, 893 (1989) (a valid and enforceable 
contract requires “a meeting of the minds between the 
parties with regard to the essential and material terms 
of the agreement”). Thus, there is no basis for the 
majority’s conclusion that Mr. Baker agreed to arbi- 
trate claims arising from his employment at the West 
Columbia Waffle House. 

14 

B. 

In its opinion, the majority simply relies on its own 
assumptions about corporate practices, as if those are 
somehow dispositive of the question whether an agree- 
ment to arbitrate has been formed, while ignoring the 

14 It is undisputed that when Mr. Baker spoke with Mr. Bradley 
about a job at the WCWH, Mr. Bradley mentioned neither arbitra- 
tion nor anything else about the way disputes were settled be- 
tween Waffle House and its employees. 

26a 

15 The majority’s hold- 
ing— that the “generic, corporation-wide employment 
application completed and signed by Baker, and the 
arbitration provision it contained, followed Baker to 
whichever facility of Waffle House hired him,” ante at 
[7a]—creates an unprecedented rule that has disturbing 
implications beyond the injustice done to Mr. Baker. 

Under the rule the majority creates today, the terms 
contained in an employment application submitted to 
one facility in a restaurant chain, or any other business 
chain, become binding on the job applicant if she is 
subsequently hired by another facility in the same 
chain. In effect, the terms contained in the employment 
application, including the mandatory arbitration provi- 
sion, become free-floating, ready to bind the unsuspect- 
ing job applicant whenever and wherever she might 
obtain employment with the same chain. It is not 
surprising that the majority fails to cite any authority 
to support its conclusion. As explained above, the 
majority’s holding is untenable under fundamental 
principles of contract law. 

district court’s factual findings. 

16 

15 Indeed, the majority substitutes its assumptions for the 
district court’s findings, and fails to review or analyze the district 

court’s findings for clear error. See Section I. 

16 In addition, I believe that even under the majority’s theory— 
that the employment application “followed” Mr. Baker to the West 
Columbia Waffle House—the arbitration provision would be 
unenforceable. 

First, the arbitration provision mandates that the employee pay 
one-half of the costs and expenses of arbitration, see supra note 1 
(“The costs and expenses of the arbitration shall be borne evenly 
by the parties”). At least three of our sister circuits have held that 
a mandatory arbitration agreement that requires an employee to 
pay a portion of the arbitrator’s fees is unenforceable under the 

27a 

The majority’s rule has no temporal or geographical 
limits. For example, suppose a student submits an 
employment application to a McDonald’s in North 

Federal Arbitration Act. See Shankle v. B-G Maintenance Mgmt. 
of Colorado, Inc., 163 F.3d 1230 (10th Cir. 1999); Paladino v. Avnet 
Computer Techs., Inc., 134 F.3d 1054 (11th Cir. 1998); Cole v. 
Burns Int’l Sec. Servs., 105 F.3d 1465 (D.C. Cir. 1997). These 
courts reasoned that if an employer requires an employee to agree 
to mandatory arbitration as a condition to obtaining or continuing 
employment, thereby prohibiting the employee from using the 
judicial forum to vindicate his rights, then the employer must pro- 
vide an accessible alternative forum. See, e.g., Shankle, 163 F.3d at 
1235. If an arbitration agreement requires the employee to pay a 
portion of the arbitrators’ fees—which often may amount to thou- 
sands of dollars—an accessible forum is, in effect, unavailable, 
because of the disincentive to arbitrate created by such fees. Id. 
Under these circumstances, an employee like Mr. Baker is unlikely 
to pursue his statutory claims. See Cole, 105 F.3d at 1484 (noting 
that arbitration fees “are unlike anything that [employee] would 
have to pay to pursue his statutory claims in court”). As the Tenth 
Circuit reasoned, “[s]uch a result clearly undermines the remedial 
and deterrent functions of the federal anti-discrimination laws.” 
Shankle, 163 F.3d at 1235 (citations omitted). 

Second, the mandatory arbitration provision would be unen- 
forceable because it is so inconspicuous that it failed, as a matter of 
law, to provide Mr. Baker with sufficient notice that he was waiv- 
ing his right to a judicial forum for his statutory claims. See 
Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 170 
F.3d 1, 20-21 (1st Cir. 1999). In Rosenberg, the First Circuit inter- 
preted the Supreme Court’s decision in Wright v. Universal 
Maritime Serv. Corp., 525 U.S. 70, 119 S. Ct. 391, 142 L.Ed.2d 361 
(1998), and a provision of the 1991 Civil Rights Act (which is also 
included in the ADA), as requiring that “there be some minimum 
level of notice to the employee [who is a party to a private arbitra- 
tion agreement] that statutory claims are subject to arbitration”. 
Rosenberg, 170 F.3d at 20-21. With its buried arbitration provi- 
sion, Waffle House failed, as a matter of law, to provide such 
“minimum level of notice” to Mr. Baker that he was required to 
arbitrate his ADA claim. See Rosenberg, 170 F.3d at 20. 

28a 

Carolina, and is offered but declines a position there. 
Then, months or years later, she seeks and obtains 
employment at a McDonald’s in Maryland without sub- 
mitting another written employment application. Un- 
der the majority’s rule, she would be bound by the 
terms of the employment application submitted earlier 
in North Carolina. 

Moreover, if a job applicant wishes to escape the 
stranglehold of the “generic, corporation-wide employ- 
ment application,” he must specify his “intent to limit 
the application to a particular location.” Ante at [6a-7a]. 
The Waffle House application, however, does not re- 
quest the applicant to specify which Waffle House 
locations he is applying for. And the application form 
itself clearly assumes that the job seeker is applying for 
a position at the restaurant where he obtained and 
completed the application. Yet the majority would 
nonetheless require the job applicant—rather than the 
corporation that drafted the terms of the employment 
application—to specify his intent, which is not asked 
for, to limit the application to a particular location. To 
place such a duty on job applicants is patently unfair 
and unwarranted. 

Common sense tells us that a person who physically 
goes to the Wal-Mart in Lewisburg, West Virginia, is 
applying for a job at that Wal-Mart, not one in Rich- 
mond, Virginia, or Charlotte, North Carolina, absent 
express negotiations to the contrary. He would not 
reasonably expect that the employment application 
submitted to the Lewisburg Wal-Mart would be con- 
sidered an application to work in Richmond or 
Charlotte. The majority sets a trap for the unwary job 

29a 

applicant by the counterintuitive rule that it has 
created today. 

III. 

Because I agree with the district court that there 
was no agreement to arbitrate between Waffle House 
and Mr. Baker, I would affirm its ruling and permit the 
EEOC to pursue both injunctive and “make-whole” 
relief on behalf of Mr. Baker. 

I respectfully dissent. 

30a 

APPENDIX B 

IN THE UNITED STATES DISTRICT COURT FOR 

THE DISTRICT OF SOUTH CAROLINA COLUMBIA 

DIVISION 

Civil Action NO. 3:96-2739-0 

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, 
PLAINTIFF 

v. 

WAFFLE HOUSE, INC., DEFENDANT 

[Filed: Mar. 23, 1998 
Entered: Mar. 24, 1998] 

ORDER 

This case is before the Court pursuant to a report 
and recommendation submitted by United States Mag- 
istrate Judge Joseph R. McCrorey, to whom it was 
referred for review under 28 U.S.C. § 636 and this 
Court’s local rules. The plaintiff Equal Employment 
Opportunity Commission (EEOC) commenced this 
action against the defendant Waffle House, Inc. pur- 
suant to the Americans with Disability Act (ADA), 42 
U.S.C. § 12117(a) and Title VII of the Civil Rights Law 
of 1964, 42 U.S.C. § 2000e-5(s)(1) and (3) and pursuant 
to the Civil Rights Act of 1991, 42 U.S.C. § 1981a to 
correct alleged unlawful employment practices based on 
disability and to provide appropriate relief to Eric Scott 

31a 

who, EEOC alleges, was adversely affected by such 
practice. Defendant Waffle House has filed a motion to 
dismiss and a petition to stay the proceedings and 
compel arbitration. Waffle House requests that arbi- 
tration be compelled pursuant to § 4 of the Federal 
Arbitration Act (FAA) 9 U.S.C. § 4 and that, because 
the claims must be arbitrated that the action be dis- 
missed for failure to state a claim pursuant to Rule 
12(b)(6) of the Federal Rules of Civil Procedure. 

Upon review, the Magistrate Judge observes that on 
June 23, 1994 Baker went to the Waffle House restau- 
rant in Columbia, South Carolina and signed an Appli- 
cation for employment while sitting in a booth in the 
restaurant with the restaurant manager. At the 
bottom of the first page of the employment application 
is the following statement: 

The Parties agree that any dispute or claim con- 
cerning Applicant’s employment with Waffle House, 
Inc., or any subsidiary or Franchisee of Waffle 
House, Inc., or the terms, conditions or benefits of 
such employment, including whether such dispute or 
claim is arbitrable, will be settled by binding arbi- 
tration. The arbitration proceedings shall be con- 
ducted under the Commercial Arbitration Rules of 
the American Arbitration Association in effect at 
the time a demand for arbitration is made. 

Baker was offered a job by the manager of the 
Columbia Waffle House, Inc. which he did not accept. 

Approximately three weeks later, Baker sought and 
was offered employment at the Waffle House Restaur- 
ant in West Columbia, South Carolina, which he 
accepted. On August 26, after he arrived at work but 

32a 

before beginning work, Baker felt he was going to have 
a seizure. After sitting down in a back room of the 
restaurant, he had a seizure which lasted approximately 
thirty seconds and, thereafter, he went home for the 
day. When Baker returned to Waffle House, the 
manager told him he could not return to work because 
of his seizures. Thereafter, on September 5, 1994, 
Baker’s employment was terminated. 

Baker filed a charge of discrimination with the 
EEOC in which he alleged that his discharge consti- 
tuted a violation of the ADA. The matter was initially 
referred to the South Carolina Humans Affair Com- 
mission for investigation which thereafter failed to find 
reasonable cause to conclude that Baker’s charge was 
discriminatory. The matter was then referred back to 
EEOC for review. After conducting its own investiga- 
tion, EEOC concluded that there is reasonable cause to 
believe that Baker’s charge violated the ADA. 

Following his thorough review and correct statement 
of applicable legal authorities, the Magistrate Judge 
observes that, under the FAA, parties can petition 
federal courts to enforce arbitration agreements and he 
correctly observes that, in determining whether to 
compel arbitration or that employment dispute, the 
court must consider (1) whether the parties have made 
an agreement to arbitrate; (2) the scope of the agree- 
ment; and (3) whether the federal statutory claims are 
arbitrable. Mitsubishi v. Solar Chrysler-Plymouth, 
Inc., 473 U.S. 614, 626-27 (1985). EEOC argues that 
Baker did not voluntarily or knowingly agree to arbi- 
trate his ADA claims because (1) Baker never signed a 
job application pertaining to the job for which he was 
employed; (2) a reasonable person would not have seen 

33a 

and understood the arbitration provision; and (3) 
Baker’s bargaining position was substantially inferior 
to that of Waffle House. Rejecting EEOC’s contention 
that Baker never signed a job application pertaining to 
the job for which he was employed, the Magistrate 
Judge concluded that the June 23, 1994 application form 
which Baker signed at the Columbia Waffle House 
“appears to be a general job application and did not 
restrict application to a certain position at Waffle 
House” and that by subsequently accepting employ- 
ment at the West Columbia Waffle House, Baker 
“appears to have assented to be bound by the prior 
agreement, that if employed he would submit his claim 
to arbitration.” Accordingly, the Magistrate Judge 
concluded that an arbitration agreement exists between 
Baker and Waffle House and he recommends that the 
Waffle House petition to compel arbitration and stay 
proceedings be granted. He also recommends that 
Waffle House’s motion to dismiss be denied. 

EEOC objects to the recommendation upon several 
grounds which will not at this time be discussed. 
Instead, this Court has sua sponte inquired concerning 
the existence of evidence that Baker and Waffle House 
made an agreement to arbitrate with respect to the job 
that he accepted. The facts stated by the Magistrate 
Judge which are extrapolated from the pleadings do not 
suggest that an employment agreement came into 
being following Baker’s signing of the application form 
on June 23, 1994. Baker left the Columbia Waffle 
House without accepting employment. It does not 
appear from the statement of facts relied upon the 
Magistrate Judge that when Baker went to the West 
Columbia, South Carolina Waffle House, the manage- 
ment there knew of or had the benefit of the application 

34a 

form which Baker had previously signed. Instead, it 
appears that Baker orally applied for and was orally 
given a job which he accepted. That being the case, it 
does not appear that Baker’s acceptance of employment 
at the West Columbia Waffle House was made pursuant 
to the written application which included the agree- 
ment to arbitrate. For that reason, I am unable to 
agree with that portion of the Magistrate Judge’s 
conclusions. Upon consideration, I am of the opinion 
that the motion to dismiss and the motion to compel 
arbitration should be and they are hereby DENIED. 

IT IS SO ORDERED. 

/s/ MATTHEW J. PERRY 

MATTHEW J. PERRY 

SENIOR UNITED STATES 

DISTRICT JUDGE 

Columbia, South Carolina, 
March 20, 1998 

35a 

APPENDIX C 

UNITED STATES COURT OF APPEALSFOR THE 
FOURTH CIRCUIT 

No. 98-1502 
CA-96-2739-3-10BC 

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, 
PLAINTIFF-APPELLEE 

v. 

WAFFLE HOUSE, INC., DEFENDANT-APPELLANT 

[Filed: Jan. 14, 2000] 

On Petition for Rehearing and Rehearing En Banc 

Appellee filed a petition for rehearing and rehearing 
en banc. 

Judge Niemeyer and District Judge Lee voted to 
deny the petition. Judge King voted to grant the peti- 
tion for rehearing. 

A member of the Court requested a poll on the 
petition for rehearing en banc. The poll failed to pro- 
duce a majority of judges in active service in favor of 
rehearing en banc. 

36a 

Chief Judge Wilkinson and Judges Widener, Wilkins, 
Niemeyer, Luttig, Williams and Traxler voted against 
rehearing en banc and Judges Murnaghan, Michael, 
Motz and King voted to hear the case en banc. 

The Court denies the petition for rehearing and 
rehearing en banc. 

Entered at the direction of Judge Niemeyer for the 
Court. 

For the Court, 

/s/ PATRICIA S. CONNOR 

CLERK 

37a 

APPENDIX D 

IN THE DISTRICT COURT OF THE UNITED STATES 

FOR THE DISTRICT OF SOUTH CAROLINA 

COLUMBIA DIVISION 

Civil Action No. 3:96-2739-10BC 

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, 
PLAINTIFF 

VS. 

WAFFLE HOUSE, INC., DEFENDANT 

[FILED: May 9, 1997 
ENTERED: May 12, 1997] 

MAGISTRATE JUDGE’S 
REPORT AND RECOMMENDATION 

The plaintiff, Equal Employment Opportunity Com- 
mission (“EEOC”), filed its complaint in this court on 
September 9, 1996. The defendant is Waffle House, Inc. 
(“Waffle House”). EEOC brings this discrimination 
action pursuant to Section 107(a) of under [sic] the 
Americans with Disabilities Act (“ADA”), 42 U.S.C. § 
12117(a), including reference to § § 706(f)(1) and (3) of 
Title VII of the Civil Rights Act of 1964 (“Title VII”), 
42 U.S.C. § 2000e-5(f)(1) and (3) and pursuant to Section 
102 of the Civil Rights Act of 1991 (“CRA”), 42 U.S.C. § 
1981a. EEOC states that the action was brought to 

38a 

correct unlawful employment practices on the basis of 
disability and to provide appropriate relief to Eric Scott 
Baker (“Baker”), who was adversely affected by such 
practices. Complaint, at 1-2. On December 2, 1996, 
Waffle House filed a motion to dismiss and a petition to 
compel arbitration and stay proceedings. Waffle House 
requests, pursuant to § 4 of the Federal Arbitration Act 
(“FAA”), 9 U.S.C. § 4, that arbitration be compelled in 
the dispute brought by the EEOC on behalf of Baker 
and that, because the claims must be arbitrated, the 
action be dismissed for the failure to state a claim, Fed. 
R. Civ. P. 12(b)(6), or in the alternative, pursuant to § 3 
of the FAA, that the proceedings be stayed pending the 
outcome of arbitration. Waffle House argues that the 
plaintiff signed an employment application containing 
an arbitration agreement covered by the FAA and 
therefore that Baker’s dispute must be submitted to 
arbitration. On December 22, 1996, EEOC filed a 
memorandum in opposition to Waffle House’s motion 
(EEOC Opp. Mem.) to dismiss and petition to compel 
arbitration and stay proceedings, accompanied by 
affidavits from David R. Treeter, Golphin Hankinson, 
Joseph Doherty, and Baker. EEOC argues that Waffle 
House’s motion must be denied because: (1) EEOC is 
not subject to the arbitration provision at issue in this 
case; (2) claims filed under the Americans with Dis- 
abilities Act and the Civil Rights Act of 1991 are not 
subject to mandatory arbitration; and (3) Eric Scott 
Baker did not knowingly or voluntarily enter into an 
agreement to arbitrate claims relating to his employ- 
ment. Waffle House filed a memorandum in reply to 
EEOC’s opposition memorandum on January 13, 1997. 
On April 30, 1997, Waffle House filed a supplemental 
memorandum in support of its motion to dismiss and 
petition to compel arbitration and stay proceedings. 

39a 

FACTS 

Eric Scott Baker, who was twenty years old at the 
time of the alleged incidents, is a high school graduate. 
He has a seizure disorder which is generally controlled 
by medication. On June 23, 1994, Baker went to a 
Waffle House in Columbia, South Carolina and com- 
pleted and signed a Waffle House application for 
employment. He completed the form while sitting in a 
booth at the restaurant with the restaurant manager. 
At the bottom of the first page of the employment ap- 
plication are four lines of small print which read: 

The parties agree that any dispute or claim concern- 
ing Applicant’s employment with Waffle House, 
Inc., or any subsidiary or Franchisee of Waffle 
House, Inc., or the terms, conditions or benefits of 
such employment, including whether such dispute 
or claim is arbitrable, will be settled by binding 
arbitration. The arbitration proceedings shall be 
conducted under the Commercial Arbitration Rules 
of the American Arbitration Association in effect at 
the time a demand for arbitration is made. 

Upton Aff., Ex. A. The manager offered Baker a posi- 
tion, which Baker declined. Approximately three weeks 
later, Baker spoke with Mike Bradley, manager of a 
Waffle House in West Columbia. Bradley offered 
Baker the position of grill operator, at a salary of $5.50 
an hour. Baker started working for Waffle House on 
August 10, 1994. On August 26, after Baker arrived at 
work, but before beginning work he felt that he was 
going to have a seizure. After sitting down in the back 
room of the restaurant, he had a seizure that lasted 
about thirty seconds. He then went home for the day. 
Baker states that he called Waffle House about his 

40a 

work schedule and was told that he could not return to 
work until Bradley returned from vacation the next 
week. Baker states that when he went back to Waffle 
House, Bradley told him that he could not return to 
work because of his seizures. Waffle House discharged 
Baker on or about September 5, 1994. Baker filed a 
charge of discrimination with the EEOC in which he 
alleged that his discharge constituted a violation of the 
ADA. Baker’s charge was initially deferred to the 
South Carolina Human Affairs Commission (“SCHAC”) 
for investigation. SCHAC ultimately concluded that 
there did not appear to be reasonable cause to find that 
Baker’s discharge was discriminatory. The matter was 
then referred to EEOC for review. EEOC conducted 
its own investigation of Baker’s claim, issued its con- 
clusion that there did appear to be reasonable cause to 
believe that Baker’s discharge violated the ADA, and 
attempted conciliation. 

DISCUSSION 

1. FAA 

The FAA was reenacted and codified in 1947 for the 
purposes of reversing the “longstanding judicial hos- 
tility” to arbitration agreements and placing arbitration 
agreement[s] on par with other contracts. Gilmer v. 
Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991). 
The primary substantive portion of the FAA provides 
that “[a] written provision in any maritime transaction 
or a contract evidencing a transaction involving com- 
merce 

17 to settle by arbitration a controversy thereafter 

17 Waffle House argues, and EEOC does not appear to dispute, 
that the “involving commerce” provision is satisfied because Waf- 
fle House operates a multi-state restaurant chain which is heavily 

41a 

arising out of such contract or transaction...shall be 
valid, irrevocable, and enforceable . . .” 9 U.S.C. § 2. 
The Supreme Court has explained that in general, the 
FAA establishes a “liberal federal policy favoring 
arbitration agreements.” Moses H. Cone Mem’l Hosp. 

v. Mercury Constr. Corp., 460 U.S. 1 (1983). 

EEOC argues that Baker falls into the exception of 
the FCC that excludes “contracts of employment of 
seamen, railroad employees, or any other class of 
workers engaged in foreign or interstate commerce.” 9 
U.S.C. § 1 (emphasis added). In Gilmer, the Supreme 
Court explicitly declined to decide whether this 
language excludes from coverage all contracts of 
employment. See Gilmer, 500 U.S. at 25 n. 2. Most 
courts addressing the issue, however, have read this 
language very narrowly, applying it only to seamen, 
railroad workers, and other workers personally 
engaged in moving goods through interstate commerce, 
see e.g., Rojas v. TK Communications, Inc., 87 F.3d 
745, 747-48 (5th Cir. 1996); Asplundh Tree Expert Co. v. 
Bates, 71 F.3d 592, 601 (6th Cir. 1995); Miller Brewing 
Co. v. Brewery Workers Local Union No. 9, 739 F.2d 
1159, 1162 (7th Cir. 1984), cert. denied, 469 U.S. 1160 
(1985); Erving v. Virginia Squires Basketball Club, 468 
F.2d 1064, 1069 (2d Cir. 1972); Dickstein v. DuPont, 443 
F.2d 783, 785 (1st Cir. 1971); Tenney Eng’g Inc. v. 
United Elec. Radio & Mach. Workers, 207 F.2d 450, 453 
(3d Cir. 1953), although the Third, Sixth, and Ninth 
Circuits have in dicta cast some doubt on this 

involved in interstate commerce for the procurement of its food 
products, advertising, and other operating services and supplies. 
See Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 115 S.Ct. 
834, 839 (1995) (involving commerce language satisfied if the 
transaction remotely involved interstate commerce). 

42a 

interpretation. See Pritzker v. Merrill Lynch, Pierce, 
Fenner & Smith, Inc., 7 F.3d 1110, 1112 n. 1, 1119-20 
(3d Cir. 1993); Mago v. Shearson Lehman Hutton, Inc., 
956 F.2d 932, 934 (9th Cir. 1992); Willis v. Dean Witter 
Reynolds, Inc., 948 F.2d 305, 310-311 (6th Cir. 1991) 
(explicitly adopting a broad reading of § 1). 

The Fourth Circuit alluded to this issue over forty 
years ago. In United Electrical, Radio, & Mach. Work- 
ers v. Miller Metal Products, Inc., 215 F.2d 221 (4th 
Cir. 1954), the Fourth Circuit wrote: 

[T]he arbitration clause in the collective bargaining 
agreement here does not cover the matter of 
damages arising out of violation of the no-strike 
clause and that the provisions of the United States 
Arbitration Act may not be relied on to stay pro- 
ceedings in a suit brought on a collective bargaining 
agreement entered into by workers engaged in 
interstate commerce as those here were engaged. 

Id. at 224. The Court continued, however, 

It appears that the exclusion of the Arbitration Act 
was introduced into the statute to meet an objection 
of the Seafarers International Union; and certainly 
such objection was directed at including collective 
bargaining agreements rather than individual con- 
tracts of employment under the provisions of the 
statute . . . No one would have serious objection to 
submitting to arbitration the matters covered by 
the individual contracts of hiring divorced from the 
provisions grafted on them by collective bargaining 
agreements. 

43a 

Id. (emphasis added). Thus, it does not appear that 
Miller Metal indicates that the Fourth Circuit would 
read § 1 of the FAA to exclude broadly all individual 
employment contracts from FAA coverage. The Su- 
preme Court, in Gilmer, which held enforceable an 
arbitration provision compelling arbitration of an al- 
leged Age Discrimination in Employment Act (ADEA) 
violation, simply affirmed the result and reasoning 
reached by the Fourth Circuit in that same case. See 
Gilmer v. Interstate/Johnson Lane Corp., 895 F.2d 195 
(4th Cir. 1990). Further, other Fourth Circuit and 
District Court opinions support such a view. See 
Austin v. Owens-Brockway Glass Container, Inc., 78 
F.3d 875 (4th Cir. 1996) (extending Gilmer to the 
collective bargaining context); see also Reeves v. 
Commercial Credit Corp., 955 F. Supp. 567, 569 (D.S.C. 
1997) (the exclusion contained in 9 U.S.C. § 1 “should be 
narrowly interpreted to apply only to those employees 
actually engaged in the transportation industry”); 
Rudolph v. Alamo Rent A Car, Inc., 952 F. Supp. 311, 
314 (E.D. Va. 1997) (holding that the FAA applied to an 
employment contract, notwithstanding the narrow ex- 
clusionary clause contained in 9 U.S.C. § 1); and 
Kropfelder v. Snap-On Tools Corp., 859 F. Supp. 952, 
958 (D. Md. 1994) (“this Court is of the view that the 
Fourth Circuit would not, as of this date, apply the 
words used in Miller Metal so as to exclude § 1’s 
application in all non-collective bargaining contexts, and 
would instead apply the views expressed by a majority 
of courts that as to non-collective bargaining contracts 
the FAA excludes only those workers involved in the 
interstate transportation of goods.”). Further, in a 
recent case similar to Baker’s, the District Court for the 
Northern District of Illinois determined that an em- 
ployment application qualified as a valid contract to ar- 

44a 

bitrate. Sheller v. Frank’s Nursery & Crafts, Inc., 957 
F. Supp. 150 (N.D. Ill. 1997). 

Under the FAA, parties can petition the federal 
courts to enforce arbitration agreements. 9 U.S.C. § 4. 
If the court finds the issue arbitrable, it must stay the 
claim. 9 U.S.C. § 3; Cherry v. Wertheim Schroder and 
Co., Inc., 868 F. Supp. 830, 836 (D.S.C. 1994). In 
determining whether to compel arbitration of an em- 
ployment dispute, the court must consider: (1) whether 
the parties have made an agreement to arbitrate; (2) 
the scope of the agreement; and (3) whether the federal 
statutory claims are arbitrable. See Topf v. Warnaco, 
Inc., 942 F. Supp. 762, 765 (D. Conn. 1996) (citing 
Genesco, Inc. v. Kakiuchi & Co., Ltd., 815 F.2d 840, 844 
(2d Cir. 1987); see also Mitsubishi v. Soler Chrysler- 
Plymouth, Inc., 473 U.S. 614, 626-27 (1985). 

2. Agreement to Arbitrate 

Waffle House argues that the arbitration clause con- 
tained in Baker’s employment application is a valid 
agreement to arbitrate. EEOC argues that the arbi- 
tration agreement should not be enforced because he 
did not knowingly and voluntarily enter into an agree- 
ment to arbitrate employment claims. EEOC further 
argues that it should not be subjected to arbitration, 
because it was not a party to the arbitration provision 
and because it requests additional relief on behalf of 
other Waffle House employees. 

45a 

a. Baker’s Arbitration Agreement 

EEOC argues that Baker did not voluntarily or 
knowingly 

18 agree to arbitrate his ADA claims because: 
(1) Baker never signed a job application pertaining to 
his job, (2) a reasonable person would not have seen and 
understood the arbitration provision, and (3) Baker’s 
bargaining position was substantially inferior to that of 
Waffle House. Waffle House contends that the job ap- 
plication which Baker signed did not contain language 
limiting its effectiveness to a specific job or limited 
period of time, and that Baker knowingly and volun- 
tarily executed the arbitration agreement. 

EEOC cannot show that Baker did not voluntarily 
or knowingly agree to arbitrate his claims relating to 
employment on the theory that Baker never signed a 
job application pertaining to the job he held. Baker 
completed and signed a Waffle House job application 
form on June 23, 1994. Baker declined the first position 
he was offered, but accepted another position with 
Waffle House and began working for Waffle House on 
August 10, 1994. The application appears to be a 
general job application and did not restrict the 
application to a certain position with Waffle House. 
Baker did not complete the “job applied for” question. 
Upton Aff., Ex. A. Further, by accepting employment, 
Baker appears to have assented to be bound by the 
prior agreement, that if employed, he would submit his 

18 The EEOC argues that under South Carolina state law and 
public policy, as well as under the FAA as interpreted in Austin 
and Prudential Ins. Co. of America v. Lai, 42 F.3d 1299, 1304 (9th 
Cir. 1994) cert. denied, ____U.S.____, 116 S.Ct. 61 (1995), an 
arbitration agreement is only valid if it was entered voluntarily 
and knowingly. 

46a 

claim to arbitration. EEOC next argues that Baker did 
not knowingly and voluntarily execute the arbitration 
agreement because a reasonable person would not have 
seen and understood the arbitration provision because 
it did not comply with the notice provisions of the South 
Carolina Arbitration Act. See S.C. Code Ann. § 15-48- 
10 (providing that a notice that a contract is subject to 
arbitration under the South Carolina statute must be 
clearly distinguishable, with the notice typed in under- 
lined capital letters, or prominently stamped on the 
first page of the contract). The South Carolina Arbitra- 
tion statute does not have to be met for the provision to 
be valid in this case because the FAA preempts state 
statutes in agreements covered by the FAA. See 
Doctor’s Associates, Inc. v. Casarotto, ____U.S. ____, 
116 S. Ct. 1652, 1656 (1996) (courts may not invalidate 
arbitration agreements under state laws applicable only 
to arbitration provisions); Soil Remediation Co. v. Nu- 
Way Environmental, Inc., 476 S.E.2d 149 (S.C. 1996) 
(FAA preempts the notice provision of the South 
Carolina Arbitration Act where the presence of 
interstate commerce makes the FAA applicable). 

Finally, EEOC alleges that the arbitration provision 
was not valid because Baker did not read the provision, 
because the provision was not explained to him, and 
Baker’s bargaining position was substantially inferior 
to that of Waffle House. “Generally applicable contract 
defenses, such as fraud, duress, or unconscionability 
may be applied to invalidate arbitration agreements 
without contravening § 2 [of the FAA].” Soil Remedia- 
tion, 476 S.E.2d at 151. Here, however, EEOC has not 
alleged that the provision was executed under any of 
those conditions. Baker is a high school graduate. 
EEOC has not alleged that he is unable to read and 

47a 

understand. “One who is capable of reading and under- 
standing but fails to read a contract before signing is 
bound by the terms thereof.” Sims v. Tyler, 281 S.E.2d 
229, 230 (S.C. 1981). Further, “[m]ere inequality in 
bargaining power, however, is not a sufficient reason to 
hold that arbitration agreements are never enforceable 
in the employment context.” Gilmer 500 U.S. at 32; see 
also Johnson v. Hubbard Broadcasting, Inc., 940 F. 
Supp. 1447, 1450 (D. Minn. 1996) (holding that agree- 
ment to arbitrate contained in an “agreement of hire” 
was enforceable; employer’s failure to explain pro- 
visions of arbitration clause coupled with superior 
bargaining power it enjoyed as an employer within the 
marketplace did not invalidate the agreement). 

b. EEOC 

The EEOC argues that it should not be subjected to 
arbitration, because it did not sign the employment ap- 
plication and because, although it seeks individual relief 
for Baker, it requests that the Court enjoin Waffle 
House from engaging in discriminatory employment 
practices and order that Waffle House institute and 
carry out policies, practices, and programs which pro- 
vide equal employment opportunities and eradicate the 
effects of its unlawful employment practices. EEOC 
Opp. Mem. at 5, Complaint, 3-4. EEOC argues that its 
right of action is independent of Baker’s private action 
right. Waffle House argues that the EEOC has made it 
clear that it is suing on Baker’s behalf and that any 
issue regarding the availability of injunctive relief could 
be accommodated by the retention of jurisdiction for 
the purpose of weighing the need for injunctive relief if 
the arbitrator determines that Baker was the victim of 
unlawful discrimination. 

48a 

EEOC cannot show that it may bring claims on 
behalf of Baker so that Baker can avoid the arbitration 
agreement. See, e.g., EEOC v. Goodyear Aerospace 
Corp., 813 F.2d 1539 (9th Cir. 1987) (concluding that an 
individual’s settlement of her personal claims renders 
those personal claims moot). With regard to Baker’s 
claims, EEOC appears to be bringing suit on Baker’s 
behalf or “standing in his shoes.” As noted before, 
EEOC stated in the complaint that it brings this action 
to provide relief to Baker and EEOC requests mone- 
tary relief for Baker. See Complaint at 1, 4. Further 
the EEOC’s response to the interrogatories required 
by Local rule 7.04 DSC reveal that this action is 
brought on Baker’s behalf. 

19 Finally, EEOC does not 
make any allegations of ADA or CRA violations in- 
dependent of the action set forth on behalf of Baker. 

EEOC does seek additional injunctive relief, 
however, “to correct unlawful employment practices on 

19 The EEOC, in response to interrogatory number five, writes: 

The Commission brings this action on behalf of Eric Scott 

Baker. Based on the information currently available to the 
Commission, the Commission will seek damages for Mr. Baker 
as follows: 

a. back pay in an amount sufficient to compensate Mr. 

Baker for the period from September 4, 1994, the date that 
Mr. Baker was terminated, through the date of trial, less 
amount earned in mitigation; 

b. prejudgment interest; 

c. compensatory damages for out-of-pocket expenses, 

emotional distress, mental anguish and loss of self-esteem, 
in an amount to be determined at the time of trial; 

d. punitive damages in an amount to be determined at the 
time of trial. 

49a 

the basis of disability.” Complaint, at 1. “Arbitration 
agreements do not preclude EEOC from seeking class- 
wide and equitable relief.” Gilmer, 500 U.S. at 212. 
EEOC has standing, by itself, to challenge ongoing dis- 
criminatory practice even if the employee has settled 
his claims. See EEOC v. United Parcel Service, 860 
F.2d 372, 375 (10th Cir. 1988). The settlement of an em- 
ployee’s claim “does not moot the EEOC’s right of 
action seeking injunctive relief to protect employees as 
a class and to deter the employer from discrimination.” 
EEOC v. Goodyear Aerospace Corp., 813 F.2d at 1543. 
EEOC may have a cause of action, separate from 
Baker’s claims for injunctive relief. Thus, the under- 
signed concludes that EEOC’s claims for injunctive 
relief should not be dismissed, but rather should be 
stayed pending the outcome of the arbitration process. 

3. Scope of the Agreement 

EEOC appears to argue that Baker’s ADA claims 
are not within the scope of the arbitration clause. 
Waffle House argues that the arbitration agreement 
clearly identifies the issues subject to arbitration. 
EEOC argues that the Ninth Circuit found that an ar- 
bitration provision that “did not even refer to employ- 
ment disputes” is invalid, see Lai, 42 F.3d 1305, and ap- 
pears to argue that the arbitration clause must specifi- 
cally identify the type of dispute covered by the 
agreement. The arbitration clause in Baker’s employ- 
ment application, however, specifically includes “any 
dispute or claim concerning applicant’s employment 
with Waffle House, Inc., or any subsidiary or 
Franchisee of Waffle House, Inc., or the terms, condi- 
tions or benefits of such employment, including whether 

50a 

such dispute or claim is arbitrable. . .” Upton Aff., Ex. 
A. 

Here, the scope of the arbitration clause is broad 
and thus encompasses the ADA and CRA claims. Any 
doubts concerning the scope of arbitrable issues should 
be resolved in favor of arbitration. Cherry, 868 F. Supp. 
at 834 (citing Dean Witter Reynolds, Inc. v. Byrd, 470 
U.S. 213, 218 (1985); see also Reese, 955 F. Supp. at 571. 

4. Applicability of Arbitration Policy 

EEOC argues that ADA and CRA claims should not 
be subject to arbitration because Baker did not volun- 
tarily agree to arbitrate these claims. Further, EEOC 
argues that the arbitration scheme is not sufficient to 
address the claims. 

Statutory claims may be the subject of an arbitration 
agreement, enforceable pursuant to the FAA. Gilmer, 
500 U.S. at 26. “By agreeing to arbitrate a statutory 
claim, a party does not forgo substantive rights 
afforded by the statute; it only submits to their resolu- 
tion in an arbitral, rather than a judicial forum.” 
Mitsubishi, 473 U.S. at 628. The FAA reflects a strong 
federal preference toward enforcing arbitration 
agreements. See Moses H. Cone Mem’l Hosp., 460 U.S. 
at 24. The Supreme Court has stated: 

“[H]aving made the bargain to arbitrate, the party 
should be held to it unless Congress itself has 
evinced an intention to preclude a waiver of 
judicial remedies for the statutory rights at issue.” 

. . . If such an intention exists, it will be dis- 
coverable in the text of the [statute], its legislative 

51a 

history, or an “inherent conflict” between arbitra- 
tion and the [statute’s] underlying purposes. 

Gilmer, 500 U.S. at 26 (quoting Mitsubishi, 473 U.S. at 
628). 

Although EEOC agrees that both the ADA and the 
CRA favor alternative dispute resolution, it argues that 
the legislative history of both statutes makes clear that 
the alternative dispute resolution must be voluntary 
and that it is not voluntary in this case. The ADA 
provides that “[w]here appropriate and to the extent 
authorized by law, the use of alternative means of 
dispute resolution, including . . . arbitration, is 
encouraged to resolve disputes arising under this 
chapter.” 42 U.S.C. § 12212. The Fourth Circuit, in 
Austin found that mandatory arbitration agreements 
signed as a condition of employment were appropriate 
and consistent with both the ADA and the CRA. 
Austin, 78 F.3d at 881 (“The meaning of this [ADA] 
language is plain–Congress is in favor of arbitration.”); 
see also McRea v. Drs. Copeland, Hyman & Shackman, 
945 F. Supp. 879 (D. Md. 1996) (holding that arbitration 
provision in employment contract was enforceable with 
respect to claims under the Civil Rights Act of 1866 and 
Title VII of the Civil Rights Act of 1964). A recent 
amendment to Title VII includes a specific expression 
of Congressional support for arbitration: 

Where appropriate and to the extent authorized 
by law, the use of alternative means of dispute re- 
solution, including . . . arbitration, is encouraged 
to resolve disputes arising under the Acts or pro- 
visions of Federal law amended by this title. 

52a 

Civil Rights Act of 1991, Pub. L. No. 102-166, § 118, 105 
Stat. 1071, 1081. Court have consistently found that 
Title VII claims are arbitrable. See e.g., Mago, 956 F.2d 
at 935 (rejecting argument that Title VII evinces con- 
gressional intent to preclude arbitration in the context 
of privately negotiated employment contracts). 

Although EEOC argues that Baker did not volun- 
tarily agree to arbitration, there is not an assertion that 
Baker could not read or understand, or that the arbitra- 
tion agreement was the result of fraud, coercion, or du- 
ress. The EEOC cannot show such an agreement was 
not voluntary. See Austin, 78 F.2d at 885 (arbitration 
agreements executed by registered brokers as a condi- 
tion of employment were sufficiently voluntary to be 
enforceable). 

The EEOC also argues that the arbitration scheme 
is not sufficient to address Baker’s claims because it is 
not clear what remedies are available in arbitration, 
strict rules of evidence are not followed, the right to 
judicial de novo trial is lost, and arbitration is financially 
burdensome. Waffle House argues that the Supreme 
Court has flatly rejected the EEOC’s argument that ar- 
bitration is inadequate to address Baker’s ADA claim. 

The EEOC cannot show that arbitration is 
inadequate for Baker’s claims. The Supreme Court in 
Gilmer rejected arguments that arbitrators would be 
biased, did not issue written opinions, was inadequate 
in terms of relief, and provided limited discovery by 
stating: 

Such generalized attacks on arbitration “res[t] on 
suspicion of arbitration as a method of weakening 
the protections afforded in the substantive law to 

53a 

would-be complaints,” and as such, they are “far 
out of step with our current strong endorsement of 
the federal statutes favoring this method of re- 
solving disputes.” 

* * * * * 

Although those procedures [used in arbitration] 
might not be as extensive as in the federal courts, 
by agreeing to arbitrate, a party “trades the 
procedures and opportunity for review of the 
courtroom for the simplicity, informality, and 
expedition of arbitration.” 

Gilmer, 500 U.S. at 30-31 (internal citations omitted). 
Further, “arbitrators do have the power to fashion eq- 
uitable relief.” Id. at 32. 

CONCLUSION 

An arbitration agreement exists between Baker and 
Waffle House; Baker’s claims under the ADA and CRA 
fall within the scope of the agreement; and the EEOC 
can show no express Congressional intent to preclude a 
waiver of judicial remedies for a violation of Baker’s 
rights under the ADA or the CRA. It is, therefore, 

RECOMMENDED that Waffle House’s motion to 
dismiss be denied and that, pursuant to 9 U.S.C. § 3, 
Waffle House’s petition to compel arbitration and stay 
proceedings be granted. 

Respectfully Submitted, 

/s/ JOSEPH R. McCROREY 
JOSEPH R. MCCROREY 

May 9, 1997 

Columbia, South Carolina 

54a 

APPENDIX E 

1. Section 1981a(1) and (2), (b) and (d) of Title 42 of 
the United States Code provides: 

§ 1981a. Damages in cases of intentional discrimi- 
nation in employment 

(a) Right of recovery 

(1) Civil rights 

In an action brought by a complaining party under 
section 706 or 717 of the Civil Rights Act of 1964 [42 
U.S.C. 2000e-5, 2000e-16] against a respondent who en- 
gaged in unlawful intentional discrimination (not an em- 
ployment practice that is unlawful because of its dispa- 
rate impact) prohibited under section 703, 704, or 717 of 
the Act [42 U.S.C. 2000e-2, 2000e-3, 2000e-16], and 
provided that the complaining party cannot recover 
under section 1981 of this title, the complaining party 
may recover compensatory and punitive damages as al- 
lowed in subsection (b) of this section, in addition to any 
relief authorized by section 706(g) of the Civil Rights 
Act of 1964, from the respondent. 

(2) Disability 

In an action brought by a complaining party under 
the powers, remedies, and procedures set forth in sec- 
tion 706 or 717 of the Civil Rights Act of 1964 [42 U.S.C. 
2000e-5, 2000e-16] (as provided in section 107(a) of the 
Americans with Disabilities Act of 1990 (42 U.S.C. 
12117(a)), and section 794a(a)(1) of title 29, respectively) 
against a respondent who engaged in unlawful inten- 
tional discrimination (not an employment practice that 
is unlawful because of its disparate impact) under sec- 

55a 

tion 791 of title 29 and the regulations implementing 
section 791 of title 29, or who violated the requirements 
of section 791 of title 29 or the regulations implement- 
ing section 791 of title 29 concerning the provision of a 
reasonable accommodation, or section 102 of the Ameri- 
cans with Disabilities Act of 1990 (42 U.S.C. 12112), or 
committed a violation of section 102(b)(5) of the Act, 
against an individual, the complaining party may re- 
cover compensatory and punitive damages as allowed in 
subsection (b) of this section, in addition to any relief 
authorized by section 706(g) of the Civil Rights Act of 
1964, from the respondent. 

* * * * * 

(b) Compensatory and punitive damages 

(1) Determination of punitive damages 

A complaining party may recover punitive damages 
under this section against a respondent (other than a 
government, government agency or political subdivi- 
sion) if the complaining party demonstrates that the re- 
spondent engaged in a discriminatory practice or dis- 
criminatory practices with malice or with reckless indif- 
ference to the federally protected rights of an ag- 
grieved individual . 

(2) Exclusions from compensatory damages 

Compensatory damages awarded under this 
section shall not include backpay, interest on backpay, 
or any other type of relief authorized under section 
706(g) of the Civil Rights Act of 1964 [42 U.S.C. 2000e- 
5(g)]. 

56a 

(3) Limitations 

The sum of the amount of compensatory damages 
awarded under this section for future pecuniary losses, 
emotional pain, suffering, inconvenience, mental an- 
guish, loss of enjoyment of life, and other nonpecuniary 
losses, and the amount of punitive damages awarded 
under this section, shall not exceed, for each complain- 
ing party- 
(A) in the case of a respondent who has more than 14 
and fewer than 101 employees in each of 20 or more cal- 
endar weeks in the current or preceding calendar year, 
$50,000; 

(B) in the case of a respondent who has more than 
100 and fewer than 201 employees in each of 20 or more 
calendar weeks in the current or preceding calendar 
year, $100,000; and 

(C) in the case of a respondent who has more than 
200 and fewer than 501 employees in each of 20 or more 
calendar weeks in the current or preceding calendar 
year, $200,000; and 

(D) in the case of a respondent who has more than 
500 employees in each of 20 or more calendar weeks in 
the current or preceding calendar year, $300,000. 

(4) Construction 

Nothing in this section shall be construed to limit 
the scope of, or the relief available under, section 1981 
of this title. 

* * * * * 

57a 

(d) Definitions 

As used in this section: 

(1) Complaining party 

The term “complaining party” means- 

( A) in the case of a person seeking to bring an action 
under subsection (a)(1) of this section, the Equal Em- 
ployment Opportunity Commission, the Attorney Gen- 
eral, or a person who may bring an action or proceeding 
under title VII of the Civil Rights Act of 1964 (42 
U.S.C. 2000e et seq.); or 

(B) in the case of a person seeking to bring an action 
under subsection (a)(2) of this section, the Equal Em- 
ployment Opportunity Commission, the Attorney 
General, a person who may bring an action or 
proceeding under section 794a(a)(1) of title 29, or a 
person who may bring an action or proceeding under 
title I of the Americans with Disabilities Act of 1990 [42 
U.S.C. 12111 et seq.]. 

(2) Discriminatory practice 

The term “discriminatory practice” means the dis- 
crimination described in paragraph (1), or the discrimi- 
nation or the violation described in paragraph (2), of 
subsection (a) of this section. 

2. Section 2000e-5 of Title 42 of the United States 
Code provides in pertinent part: 

* * * * * 

(f) Civil action by Commission, Attorney General, 
or person aggrieved; preconditions; procedure; 

58a 

appointment of attorney; payment of fees, costs, 
or security; intervention; stay of Federal 
proceedings; action for appropriate temporary 
or preliminary relief pending final disposition of 
charge; jurisdiction and venue of United States 
courts; designation of judge to hear and deter- 
mine case; assignment of case for hearing; expe- 
dition of case; appointment of master. 

(1) If within thirty days after a charge is filed with 
the Commission or within thirty days after expiration 
of any period of reference under subsection (c) or (d) of 
this section, the Commission has been unable to secure 
from the respondent a conciliation agreement accept- 
able to the Commission, the Commission may bring a 
civil action against any respondent not a government, 
governmental agency, or political subdivision named in 
the charge. In the case of a respondent which is a gove- 
rnment, governmental agency, or political subdivision, 
if the Commission has been unable to secure from the 
respondent a conciliation agreement acceptable to the 
Commission, the Commission shall take no further ac- 
tion and shall refer the case to the Attorney General 
who may bring a civil action against such respondent in 
the appropriate United States district court. The per- 
son or persons aggrieved shall have the right to inter- 
vene in a civil action brought by the Commission or the 
Attorney General in a case involving a government, 
governmental agency, or political subdivision. If a 
charge filed with the Commission pursuant to subsec- 
tion (b) of this section, is dismissed by the Commission, 
or if within one hundred and eighty days from the filing 
of such charge or the expiration of any period of refer- 
ence under subsection (c) or (d) of this section, which- 
ever is later, the Commission has not filed a civil action 
under this section or the Attorney General has not filed 

59a 

a civil action in a case involving a government, govern- 
mental agency, or political subdivision, or the Commis- 
sion has not entered into a conciliation agreement to 
which the person aggrieved is a party, the Commission, 
or the Attorney General in a case involving a govern- 
ment, governmental agency, or political subdivision, 
shall so notify the person aggrieved and within ninety 
days after the giving of such notice a civil action may be 
brought against the respondent named in the charge 
(A) by the person claiming to be aggrieved or (B) if 
such charge was filed by a member of the Commission, 
by any person whom the charge alleges was aggrieved 
by the alleged unlawful employment practice. Upon 
application by the complainant and in such circum- 
stances as the court may deem just, the court may 
appoint an attorney for such complainant and may 
authorize the commencement of the action without the 
payment of fees, costs, or security. Upon timely appli- 
cation, the court may, in its discretion, permit the 
Commission, or the Attorney General in a case involv- 
ing a government, governmental agency, or political 
subdivision, to intervene in such civil action upon 
certification that the case is of general public impor- 
tance. Upon request, the court may, in its discretion, 
stay further proceedings for not more than sixty days 
pending the termination of State or local proceedings 
described in subsection (c) or (d) of this section or 
further efforts of the Commission to obtain voluntary 
compliance. 

(2) Whenever a charge is filed with the Commission 
and the Commission concludes on the basis of a 
preliminary investigation that prompt judicial action is 
necessary to carry out the purposes of this Act, the 
Commission, or the Attorney General in a case involv- 

60a 

ing a government, governmental agency, or political 
subdivision, may bring an action for appropriate 
temporary or preliminary relief pending final disposi- 
tion of such charge. Any temporary restraining order 
or other order granting preliminary or temporary relief 
shall be issued in accordance with rule 65 of the Federal 
Rules of Civil Procedure. It shall be the duty of a court 
having jurisdiction over proceedings under this section 
to assign cases for hearing at the earliest practicable 
date and to cause such cases to be in every way 
expedited. 

(3) Each United States district court and each United 
States court of a place subject to the jurisdiction of the 
United States shall have jurisdiction of actions brought 
under this subchapter. Such an action may be brought 
in any judicial district in the State in which the unlaw- 
ful employment practice is alleged to have been com- 
mitted, in the judicial district in which the employment 
records relevant to such practice are maintained and 
administered, or in the judicial district in which the 
aggrieved person would have worked but for the 
alleged unlawful employment practice, but if the re- 
spondent is not found within any such district, such an 
action may be brought within the judicial district in 
which the respondent has his principal office. For 
purposes of sections 1404 and 1406 of title 28, the judi- 
cial district in which the respondent has his principal of- 
fice shall in all cases be considered a district in which 
the action might have been brought. 

(4) It shall be the duty of the chief judge of the 
district (or in his absence, the acting chief judge) in 
which the case is pending immediately to designate a 
judge in such district to hear and determine the case. 

61a 

In the event that no judge in the district is available to 
hear and determine the case, the chief judge of the 
district, or the acting chief judge, as the case may be, 
shall certify this fact to the chief judge of the circuit (or 
in his absence, the acting chief judge) who shall then 
designate a district or circuit judge of the circuit to hear 
and determine the case. 

(5) It shall be the duty of the judge designated pur- 
suant to this subsection to assign the case for hearing at 
the earliest practicable date and to cause the case to be 
in every way expedited. If such judge has not sched- 
uled the case for trial within one hundred and twenty 
days after issue has been joined, that judge may ap- 
point a master pursuant to rule 53 of the Federal Rules 
of Civil Procedure. 

(g) Injunctions; appropriate affirmative action; eq- 
uitable relief; accrual of back pay; reduction of 
back pay; limitations on judicial orders 

(1) If the court finds that the respondent has inten- 
tionally engaged in or is intentionally engaging in an 
unlawful employment practice charged in the com- 
plaint, the court may enjoin the respondent from en- 
gaging in such unlawful employment practice, and order 
such affirmative action as may be appropriate, which 
may include, but is not limited to, reinstatement or 
hiring of employees, with or without back pay (payable 
by the employer, employment agency, or labor organi- 
zation, as the case may be, responsible for the unlawful 
employment practice), or any other equitable relief as 
the court deems appropriate. Back pay liability shall 
not accrue from a date more than two years prior to the 
filing of a charge with the Commission. Interim earn- 
ings or amounts earnable with reasonable diligence by 

62a 

the person or persons discriminated against shall 
operate to reduce the back pay otherwise allowable. 

3. Section 12117 of Title 42 of the United States 
Code provides in pertinent part: 

Enforcement 

(a) Powers, remedies, and procedures 

The powers, remedies, and procedures set forth in 
sections 2000e-4, 2000e-5, 2000e-6, 2000e-8, and 2000e-9 
of this title shall be the powers, remedies, and pro- 
cedures this subchapter provides to the Commission, to 
the Attorney General, or to any person alleging disc- 
rimination on the basis of disability in violation of any 
provision of this chapter, or regulations promulgated 
under section 12116 of this title, concerning employ- 
ment. 

4. Title 9 of the United States Code provides: 

§ 1. “Maritime transactions” and “commerce” defined; 
exceptions to operation of title 

“Maritime transactions”, as herein defined, means 
charter parties, bills of lading of water carriers, agree- 
ments relating to wharfage, supplies furnished vessels 
or repairs to vessels, collisions, or any other matters in 
foreign commerce which, if the subject of controversy, 
would be embraced within admiralty jurisdiction; “com- 
merce”, as herein defined, means commerce among the 
several States or with foreign nations, or in any Ter- 
ritory of the United States or in the District of Colum- 
bia, or between any such Territory and another, or 
between any such Territory and any State or foreign 
nation, or between the District of Columbia and any 

63a 

State or Territory or foreign nation, but nothing herein 
contained shall apply to contracts of employment of sea- 
men, railroad employees, or any other class of workers 
engaged in foreign or interstate commerce. 

§ 2. Validity, irrevocability, and enforcement of 
agreements to arbitrate 

A written provision in any maritime transaction or a 
contract evidencing a transaction involving commerce 
to settle by arbitration a controversy thereafter arising 
out of such contract or transaction, or the refusal to 
perform the whole or any part thereof, or an agreement 
in writing to submit to arbitration an existing contro- 
versy arising out of such a contract, transaction, or re- 
fusal, shall be valid, irrevocable, and enforceable, save 
upon such grounds as exist at law or in equity for the 
revocation of any contract.