Stephens & Co. Duffield v. Robertson

The critical language of the act is found in Section 118, which states that parties to Title VII disputes could, "[w]here appropriate and to the extent authorized by law," choose to pursue other methods of resolving them, including arbitration. Robertson Stephens argued that this language shows congressional intent to allow, even encourage, the kind of process represented by Form U-4. The firm also argued that by the time the Civil Rights Act of 1991 was passed, compulsory arbitration was already "authorized by law," namely, by the Gilmer case.

Judge Reinhardt remarked that this reading of Section 118 conflicts with Congress' directive to read Title VII broadly, and to choose the interpretation of the law which "most effectively advances" the underlying Congressional purpose. And when Congress "encourages" arbitration, we must read that word in the light of the "provisions of the whole law . . . [i]t would seem entirely disingenuous to fasten on that one word and conclude that Congress was boundlessly in favor of all forms of arbitration." Read in the light of Congress' objectives in the 1991 act, the words "where appropriate" point to whatever forum for dispute resolution the victims of discrimination find desirable, rather than to an unwanted forum forced on them.

Section 118's other critical statutory phrase, "to the extent authorized by law," most likely codifies the "law" as Congress understood it at the time-- and, Judge Reinhardt pointed out, the "overwhelming weight of the law" was that "compulsory agreements to arbitrate Title VII claims were unenforceable." Such agreements were not "authorized by law." As of the time Section 118 was reported out of the congressional committee which drafted the bill, circuit courts "without exception, had `widely interpreted' Title VII as prohibiting `any form of compulsory arbitration.'"