IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 01-10219
BERTHA A. HARRIS; ET AL.,
Plaintiffs,
BERTHA A. HARRIS; BARRIE E. KIGER-NOGY;
LEE M. SCHAFFER,
Plaintiffs-Appellees,
v.
PARKER COLLEGE OF CHIROPRACTIC,
Defendant-Appellant.
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Appeal from the United States District Court
for the Northern District of Texas
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March 25, 2002
Before EMILIO M. GARZA, BENAVIDES and STEWART, Circuit Judges.
BENAVIDES, Circuit Judge:
The defendant-appellant, Parker College of Chiropractic
(“Parker”), appeals the district court’s final judgment, which
confirms and adopts the arbitrator’s award in favor of the
plaintiffs-appellees for violations of Title VII of the Civil
Rights Act and the Texas Commission on Human Rights Act.
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FACTUAL AND PROCEDURAL BACKGROUND
The plaintiffs-appellees, Bertha A. Harris (“Harris”), Barrie
E. Kiger-Nogy (“Kiger-Nogy”), and Lee M. Shaffer (“Shaffer”) were
employees of the defendant-appellant, Parker. Shaffer was an
instructor and one of three department heads within the Center for
Chiropractic Sciences at Parker. Harris was the office manager for
the Post-Graduate Department at Parker, and Kiger-Nogy worked under
the direct supervision of Harris.
In January 1999, Leander Eckard (“Eckard”) took charge of the
Post-Graduate Department at Parker, becoming Harris’ direct
supervisor. Starting at that time, and until Eckard voluntarily
left the department in April 1999, Harris and Kiger-Nogy allege
that Eckard created a sexually and racially hostile environment.
In addition, Harris and Kiger-Nogy allege that despite numerous
complaints about Eckard’s conduct, Parker failed to correct the
situation. Harris and Kiger-Nogy eventually resigned. Shaffer, who
witnessed Eckard’s allegedly harassing behavior, assisted Harris
and Kiger-Nogy in their complaints. Shortly after assisting them,
Shaffer was informed that his yearly contract to work at Parker had
expired and, for the first time in ten years, would not be renewed.
The plaintiffs-appellees filed suit in Texas state court,
alleging that Eckard had created and maintained a racially and
sexually hostile environment in the workplace, that they had
repeatedly reported Eckard’s conduct to the administration of
Parker without satisfactory results, that Shaffer was terminated
2
from his employment in retaliation because he assisted Harris and
Kiger-Nogy in their complaints, and that Harris and Kiger-Nogy were
constructively discharged by Parker.
The suit was removed to federal court and later submitted to
arbitration under the Texas Arbitration Act, in accordance with an
arbitration agreement between Parker and the plaintiffs-appellees.
The arbitrator rendered a decision in favor of the plaintiffs-
appellees, awarding them damages for lost wages and benefits, and
mental anguish, as well as punitive damages. Claims by a fourth
plaintiff, Dana Cypret, were denied, as were Kiger-Nogy’s and
Shaffer’s claims for intentional infliction of emotional distress.
The award was confirmed by the district court. This appeal ensued.
DISCUSSION
I. Standard of Review
The central question on appeal is what standard of review this
Court should employ. This Court reviews a district court's
decision refusing to vacate an arbitration award under the same
standard as any other district court decision: we accept findings
of fact that are not clearly erroneous and decide questions of law
de novo. See Hughes Training v. Cook, 254 F.3d 588, 592 (5th Cir.
2001). Usually, the district court's "review of an arbitration
award is extraordinarily narrow." Antwine v. Prudential Bache
Securities, Inc., 899 F.2d 410, 413 (5th Cir.1990). Under the
Federal Arbitration Act (“FAA”), a district court may vacate an
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award only if: (1) the award was procured by corruption, fraud, or
undue means; (2) there is evidence of partiality or corruption
among the arbitrators; (3) the arbitrators were guilty of
misconduct which prejudiced the rights of one of the parties; or
(4) the arbitrators exceeded their powers. 9 U.S.C. § 10(a). An
additional ground for vacating an arbitration award is that in
making the award the arbitrator acted with "manifest disregard for
the law." Williams v. Cigna Fin. Advisors, Inc., 197 F.3d 752, 761
(5th Cir.1999).1
However, in this case the parties modified the standard of
review through a provision in their arbitration agreement.
Specifically, the agreement provides that “[t]he Award of the
Arbitrator shall be binding on the parties hereto, although each
party shall retain his right to appeal any questions of law, and
judgment may be entered thereon in any court having jurisdiction.”
We have previously held that parties may contractually modify the
standard of review of an arbitration award. See Gateway Techs.,
Inc. v. MCI Telecomms. Corp., 64 F.3d 993, 996 (5th Cir. 1995)
(“Such a contractual modification is acceptable because, as the
1
This Court applied the following test to determine whether the arbitrators acted with manifest disregard
for the law:
“First, where on the basis of the information available to the court it is not manifest that the arbitrators
acted contrary to the applicable law, the award should be upheld.
Second, where on the basis of the information available to the court it is manifest that the arbitrators acted
contrary to the applicable law, the award should be upheld unless it would result in significant injustice, taking into
account all the circumstances of the case, including powers of arbitrators to judge norms appropriate to the
relations between the parties.”
Id. at 762.
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Supreme Court has emphasized, arbitration is a creature of contract
and the FAA’s pro-arbitration policy does not operate without
regard to the wishes of the contracting parties.”). Moreover, we
have held that a provision that was substantively identical2 to the
one at issue here “supplement[ed] the FAA's default standard of
review and allow[ed] for de novo review of issues of law embodied
in the arbitration award.” Id. Thus, in this case, we must apply
a de novo standard of review to questions of law.
The difficulty in this case arises from the fact that the
parties have not specified the meaning of “questions of law.”
According to the defendant-appellant, “questions of law” should be
interpreted to encompass all of the issues it raises on appeal,
including the sufficiency of the evidence to support the
arbitrator’s findings of hostile work environment and retaliation.
The plaintiffs-appellees contend that de novo review should apply
only to “pure legal conclusions” and that to allow de novo review
of the sufficiency of the evidence will result in retrial of the
facts. Moreover, plaintiffs-appellees point out that if “questions
of law” is construed to encompass sufficiency of the evidence, then
the exception allowing review of questions of law will swallow up
the arbitration agreement’s rule that “the Award of the Arbitrator
shall be binding.”
2
The provision at issue in Gateway stated that “[s]pecifically, their contract details that "[t]he arbitration
decision shall be final and binding on both parties, except that errors of law shall be subject to appeal." Id.
5
In diversity cases, federal courts apply state law rules of
contract construction. Harken Exploration Co. v. Sphere Drake Ins.
PLC, 261 F.3d 466, 471 n.3 (5th Cir. 2001). Thus, Texas law
applies to the interpretation of the arbitration agreement at issue
here. In construing contracts, Texas requires that courts
ascertain and give effect to the parties' intentions as expressed
in the document. See Lopez v. Munoz, Hokema & Reed, LLP., 22
S.W.3d 857, 861 (Tex. 2000). “[W]here an ambiguity exists in a
contract, the contract language will be construed strictly against
the party who drafted it since the drafter is responsible for the
language used.” Gonzales v. Mission American Ins. Co., 795 S.W.2d
734, 737 (Tex. 1990) (citation omitted). “Ambiguity does not arise
simply because the parties advance conflicting interpretations of
the contract; rather, for an ambiguity to exist, both
interpretations must be reasonable.” Lopez, 22 S.W.3d at 861
(citation omitted).
In the present case, the phrase “questions of law” is ambiguous
because the parties have presented at least two reasonable and
conflicting interpretations of the phrase.3 The phrase could
reasonably be interpreted to encompass solely “pure” questions of
law, or it could be read broadly, to encompass mixed questions of
3
The issue of the ambiguity of “questions of law” was not directly addressed by the Gateway decision, as
the appellants in that case were not seeking review of the sufficiency of the evidence, but only of pure questions of
law: the proper standard for imposition of punitive damages under Virginia law; and whether the contract between
the parties created a fiduciary relationship . In any case, the parties in Gateway had not raised the question of
whether the issues appealed fell within the scope of de novo review.
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law and fact. Given that Parker drafted the agreement, the phrase
should be construed against Parker. Thus, “questions of law”
should be read narrowly, to encompass only pure questions of law.
The latter interpretation is also compelled by another Texas
rule of contract interpretation: “We must... attempt to give effect
to all contract provisions so that none will be rendered
meaningless.” Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980
S.W.2d 462, 464 (Tex. 1998). In the present case, the arbitrator’s
legal determinations are intimately bound up with the facts, in
such a manner that, if all mixed questions of fact and law were
reviewed de novo, none of the arbitrator’s findings would be final.
If the phrase “questions of law” were read broadly, to encompass
mixed questions of law and fact, then the provision that the
arbitrator’s award should be binding would become meaningless.
Thus, to give effect to this provision, the phrase “questions of
law” must be construed as referring only to “pure” questions of
law.
Finally, it is worth mentioning that parties that wish to
provide for more extensive review of an arbitrator’s award may do
so by specifying the standard of review in the arbitration
agreement. See Hughes Training, 254 F.3d 588 (holding that the
standard of review was contractually modified by a provision in the
arbitration agreement that stated that arbitration would be
governed by a set of procedural rules, one of which was that “in
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actions seeking to vacate an award, the standard of review to be
applied to the arbitrator's findings of fact and conclusions of law
will be the same as that applied by an appellate court reviewing a
decision of a trial court sitting without a jury”). In the present
case, the arbitration agreement simply did not specify that the
standard of review for anything other than pure questions of law
had been altered.
In conclusion, the standard of review to be applied is de novo
with respect to pure questions of law. With respect to questions
of fact and mixed questions of law and fact, we apply the default
standard of review, vacating only for manifest disregard of the
law, or on the grounds listed in the FAA.
II. Sufficiency of the Evidence
Defendant-appellant challenges the sufficiency of the evidence
to support the arbitrator’s determinations that there was a
racially hostile work environment at Parker with respect to Harris
and a sexually hostile work environment with respect to Kiger-Nogy,
that both Harris and Kiger-Nogy were constructively discharged,
that Shaffer suffered retaliation, and that the plaintiffs-
appellees were entitled to damages for mental anguish and punitive
damages. Challenges to a district court’s finding of hostile work
environment and constructive discharge are typically treated as
factual questions, subject to a “clearly erroneous” standard of
review. See, e.g., Cortes v. Maxus Exploration Co., 977 F.2d 195
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(5th Cir. 1992). And in general, challenges to the sufficiency of
the evidence to support a district court’s findings amount to mixed
questions of law and fact, because they address the application of
law to facts. See Townsend v. Sain, 372 U.S. 293, 310 n.6, 83
S.Ct. 745, 756 (1963)(“So-called mixed questions of fact and law...
require the application of a legal standard to... historical-fact
determinations”). Thus, all of these challenges are reviewed only
under the default standard for vacating an arbitral award.
The defendant-appellant has not shown that the arbitrator
acted with manifest disregard for the law in making the award
because, on the basis of the information available to us, it is not
manifest that the arbitrator acted contrary to the applicable law.
Indeed, the arbitrator’s award with respect to each plaintiff can
be reasonably supported on the basis of the evidence and law. None
of the other bases listed in the FAA for vacating an award is
present. Hence, the district court did not err in confirming the
arbitrator’s award with respect to these challenges.
III. Constructive Discharge
The defendant-appellant does raise one pure legal question on
appeal, which we review de novo. Parker argues that Harris and
Kiger-Nogy could not assert constructive discharge in their legal
complaint because they did not raise it in their original EEOC
charge. However, no authority supports this proposition. In this
circuit, a claimant is not required to assert all legal claims in
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the EEOC charge; rather, it is sufficient if in the EEOC charge the
claimant asserts the facts that are the basis for the legal claims.
See Sanchez v. Standard Brands, 431 F.2d 455, 462 (5th Cir. 1970)
(“In the context of a statute like Title VII it is inconceivable
that a charging party's rights should be cut off merely because he
fails to articulate correctly the legal conclusion emanating from
his factual allegations. Surely the only procedural requirement
which should confront a Title VII complainant is the requirement
that he state, within the ninety-day period, facts sufficient to
trigger a Commission investigation.”). In the present case, the
claims for constructive discharge were premised on the same facts
as the claims for discrimination in employment, which were
described in the EEOC complaint. Consequently, it was proper for
the arbitrator to consider the constructive discharge claims.
CONCLUSION
The arbitrator’s award in this case does not indicate that she
acted with manifest disregard for the law, and the arbitrator did
not err in considering the plaintiffs-appellees’ claims for
constructive discharge. Therefore, we AFFIRM the district court’s
judgment confirming the arbitrator’s award.
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