Miller v. Public Storage Management, Inc.

United States Court of Appeals,

Fifth Circuit.

No. 96-10670.

Janice Sue MILLER, Plaintiff-Appellant,

v.

PUBLIC STORAGE MANAGEMENT, INC., Storage Equities, Inc. and
Public Storage, Inc., Defendants-Appellees.

Sept. 9, 1997.

Appeal from the United States District Court for the Northern
District of Texas.

Before DAVIS, SMITH and DUHÉ, Circuit Judges.

DUHÉ, Circuit Judge:

Appellant Janice Sue Miller appeals the district court's Order

dismissing her case and compelling arbitration of her claims

against Appellee Public Storage, Inc. We find the arbitration

provision in Appellant's employment contract should be enforced

under the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-14, and

affirm the district court.

BACKGROUND

Janice Sue Miller worked for Public Storage as a property

manager. In August 1993, at a performance review, Public Storage

presented Miller with an employment contract containing an

arbitration clause providing any dispute arising over employment

termination would be resolved by binding arbitration.1 Although

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The arbitration agreement reads in part:

Arbitration. In the event Employee's employment and this
agreement are terminated, and Employee believes the
termination was wrongful and/or violated any of Employee's

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rights, Employee and Company agree to submit any dispute arising
out of the termination of Employee's employment, including but not
limited to claims of termination allegedly resulting from
discrimination on the basis of race, sex, age, national origin,
ancestry, color, religion, marital status, status of veteran of
Vietnam era, physical or mental disability, medical condition, or
any other basis prohibited by law, exclusively to final and binding
arbitration before a neutral arbitrator.

If Employee and Company are unable to agree upon a
neutral arbitrator, Company will obtain a list of arbitrators
from a state or federal arbitration service. Employee (first)
and then Company will alternately strike names from the list
until only one name remains; the remaining person shall be
the arbitrator. The arbitrator shall be bound by the
qualifications and disclosure provisions and the procedures
set forth in the 1989 Model Employment Arbitration Procedures
of the American Arbitration Association and shall order such
discovery as is appropriate to the nature of the claim and
necessary to the adjudication thereof.

Arbitration proceedings shall be held in the city or town
where Employee's employment services were performed, at the
Company headquarters or any other location mutually agreed
upon by Employee and Company. The arbitrator shall determine
the prevailing party in the arbitration and the cost of the
arbitration shall be paid by the nonprevailing party.

Employee and Company agree that this arbitration shall be
the exclusive means of resolving any dispute arising out of
Employee's termination and that no other action will be
brought by Employee in any court or other forum. ONLY THE
ARBITRATOR, NOT A JUDGE OR JURY, WILL DECIDE THE DISPUTE.

* * *

If Employee decides to dispute Employee's termination,
Employee agrees to deliver a written request for arbitration
to Company within one year of the date of Employee's
termination and to respond within 14 calendar days to each
communication regarding the selection of an arbitrator and the
scheduling of a hearing and other matters related to
arbitration proceedings. If Company does not receive a
written request for arbitration from Employee within one year
from the date of Employee's termination or if Employee does
not respond to any communication from Company about the
arbitration proceedings within 14 calendar days, Employee
agrees Employee will have waved any right to raise any claims
arising out the termination of Employee's employment with
Company in arbitration or in any court or other forum. Limitations

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she now claims she was given insufficient time to read the

contract, she initialed each page of the document and signed the

entire agreement.

In February 1995, Miller injured her arm at work and

eventually took a medical leave of absence. However, after eight

months of leave, she was still unable to return to work and was

fired. Miller filed a charge of disability discrimination with the

Equal Employment Opportunity Commission ("EEOC") and received a

Notice of Right to Sue. She then sued Public Storage alleging

violations of the Americans with Disabilities Act ("ADA"), 42

U.S.C. §§ 12101-12213, and retaliation under the Texas Labor Code,

§§ 451.001-.003.

Public Storage successfully moved to dismiss the suit and

compel arbitration. The district court found that under the FAA,

the arbitration agreement in Miller's employment contract was valid

and enforceable. Miller appeals.

DISCUSSION

Miller claims the district court erred in ordering

arbitration as her employment contract was outside the scope of the

FAA. She argues that the trial court misread the exclusion clause

set forth in this paragraph shall not be subject to tolling,
equitable or otherwise.

The arbitrator shall be permitted to award only those
remedies in law or equity which are requested by the parties,
appropriate for the claims and supported by credible, relevant
evidence. The provisions of this arbitration provision shall
survive the termination of this agreement and Employee's
employment and shall remain in full force and effect
thereafter.

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in 9 U.S.C. § 1 of the FAA by narrowly construing the effect of

that clause.

9 U.S.C. § 2 of the FAA makes arbitration agreements in

certain contracts enforceable: "A written provision in ... a

contract evidencing a transaction involving commerce to settle by

arbitration a controversy thereafter arising out of such contract

or transaction ... shall be valid, irrevocable and enforceable,

save upon such grounds as exist at law or in equity for the

revocation of any contract." Section 1 defines contractual

relationships excluded from the reach of the FAA. That section

states in part: "[N]othing herein contained shall apply to

contracts of employment of seaman, railroad employees, or any other

class of workers engaged in foreign or interstate commerce."

Miller argues that, despite this Court's decision in Rojas v.

TK Communications, Inc., 87 F.3d 745 (5th Cir.1996), arbitration

clauses in employment contracts for workers generally engaged in

interstate commerce are excluded from the scope of the FAA. Both

Miller and the EEOC2 claim Rojas conflicts with Lincoln Mills v.

Textile Workers Union, 230 F.2d 81 (5th Cir.1956), rev'd on other

grounds, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957).

In Rojas, an employee sued alleging sexual harassment and

retaliation under Title VII. Her employer sought to dismiss her

claims on the ground they were subject to mandatory arbitration

pursuant to an arbitration clause in her employment contract. The

employee, a radio disc jockey, argued for a broad reading of the

2
The EEOC filed an amicus brief on behalf of Miller.

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exclusion clause of the FAA, and maintained her claims were exempt

from arbitration as she was a worker "engaged in interstate

commerce." 87 F.3d at 747.

This Court disagreed, and specifically found the exclusion

clause does not release all employment contracts from the

constraints of the FAA. We found the exclusion applies only to

employees "actually engaged in the movement of goods in interstate

commerce in the same way that seamen and railroad workers are."

Id. at 748 (quoting Asplundh Tree Expert Co. v. Bates, 71 F.3d 592,

601 (6th Cir.1995)). Noting that the majority of courts addressing

this issue "have determined that the exclusionary language present

in § 1 is to be narrowly construed," we stated Congress's failure

to broaden the exclusion through statutory language persuaded us to

read the § 1 exclusion narrowly. Id. Any broader interpretation of

that clause would undermine its significance.

In Lincoln Mills, an earlier case than Rojas, an employer and

a union entered into a collective bargaining agreement that

provided for arbitration to resolve disagreements between the

parties. The union subsequently filed several grievances with the

employer, which the employer rejected after the collective

bargaining agreement expired. The employer then refused to grant

the union's request that the grievances be submitted to

arbitration; the union sued to enforce the arbitration clause.

This Court held the collective bargaining agreement was a

contract of employment within the meaning of the FAA, and excluded

from the FAA's application. Lincoln Mills, 230 F.2d at 86. We

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went on to state the FAA "does not authorize the judicial

enforcement of a contractual undertaking to submit to arbitration

grievances arising under a collective bargaining agreement." Id.

Rojas did not cite the holding in Lincoln Mills. However,

Lincoln Mills did not specifically address the issue raised in

Rojas and in this case: whether the § 1 exclusion exemption for

contracts of employment of "any other class of workers engaged in

... interstate commerce" should exclude all employment contracts

from the FAA's reach, or only those employment contracts of workers

directly engaged in transportation of goods in commerce (such as

railroad employees and seaman, the two classes of workers the FAA

mentions by name). Lincoln Mills instead focused on the

enforceability of an arbitration clause in a collective bargaining

agreement, a completely different situation than that presented

here.

The facts of Lincoln Mills demonstrate the differences between

that case and Rojas. Lincoln Mills raised concerns about how labor

unions and large corporations, functioning pursuant to a collective

bargaining agreement, could best resolve disputes about working

conditions. Whether the FAA applies in that situation presents

quite different issues from those raised by the FAA's application

in a conflict between an employer and an individual employee, when

that employee signed a contract agreeing to settle disputes through

arbitration. For these reasons, the holding in Lincoln Mills that

the FAA does not authorize arbitration in disputes arising under

collective bargaining agreements does not conflict with the Rojas

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holding that workers not directly involved in the transport of

goods in interstate commerce are subject to the requirements of the

FAA. We therefore find that, under Rojas, Miller is bound by the

arbitration clause in her employment contract.

Miller also contends the FAA does not apply to a claim

brought under the ADA. Miller claims the legislative history of the

ADA shows Congress did not intend for arbitration clauses to

prevent individuals from bringing suit for alleged ADA violations.

The explicit language of the ADA advocates the use of

alternative dispute resolution: "Where 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. This

language persuasively demonstrates Congress did not intend to

exclude the ADA from the scope of the FAA.

As well, both the Supreme Court and this Court have found

suits brought under the other anti-discrimination statutes are

subject to the FAA. The Supreme Court held in Gilmer v.

Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct. 1647, 114

L.Ed.2d 26 (1991), the FAA applies to claims brought under the Age

Discrimination in Employment Act. As we noted earlier, this Court

found in Rojas that claims brought under Title VII are also within

the boundaries of the FAA. Considering that the ADA is part of the

same broad remedial framework as the ADEA and Title VII, and that

all the anti-discrimination acts have been subjected to similar

analysis, Daigle v. Liberty Life Ins. Co., 70 F.3d 394, 396 (5th

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Cir.1995) (finding ADA claims subject to the same method of proof

as Title VII cases); Bodenheimer v. PPG Indus., Inc., 5 F.3d 955,

957 n. 4 (5th Cir.1993) (stating ADEA claims are also subject to

the same method of proof as Title VII cases), we disagree that

Congress intended to exempt the ADA from the requirements of the

FAA. Refusing to enforce arbitration agreements solely in the

context of the ADA would be an inconsistent departure from the

traditional treatment accorded the anti-discrimination statutory

scheme.

Miller next contends the circumstances surrounding her

signing the employment contract render that contract

unconscionable, and that the district court should have considered

her arguments to that effect. However, as the fraud Miller

alleges, fraud in the inducement, relates to the formation of her

contract as a whole and not merely to the making of the arbitration

agreement, under the FAA her claim is properly decided by an

arbitrator. R.M. Perez & Assocs., Inc. v. Welch, 960 F.2d 534, 538

(5th Cir.1992).

Finally, we disagree that Miller's state claims for

retaliation should have been heard by the district court, because

Texas state law does not favor arbitration for personal injury or

workers' compensation claims. The FAA preempts conflicting state

antiarbitration law. Southland Corp. v. Keating, 465 U.S. 1, 16,

104 S.Ct. 852, 861, 79 L.Ed.2d 1 (1984). The district court

properly found Miller's state law claims should go to arbitration.

For all the foregoing reasons, we AFFIRM the decision of the

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district court.

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