Santoro v. Accenture Federal Services, LLC, No. 12-2561 (4th Cir. 2014)
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Plaintiff filed suit in the Superior Court for the District of Columbia against his former employer, Accenture, alleging claims for age discrimination. Accenture moved to compel arbitration. While the motion to compel arbitration was pending with the Superior Court, plaintiff received a right-to-sue letter from the EEOC and filed an action in district court. Accenture moved to compel arbitration of these claims as well. On appeal, plaintiff contended that the district court erred in compelling arbitration. The court held that, where the plaintiff is not pursuing Dodd-Frank whistleblower claims, neither 7 U.S.C. 26(n)(2), nor 18 U.S.C. 1514A(e)(2) overrides the FAA's mandate that arbitration agreements are enforceable. Because plaintiff was not pursuing a "dispute under this section" Dodd-Frank did not bar arbitration of his federal claims. Accordingly, the court affirmed the judgment of the district court.
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PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 12-2561 ARMAND SANTORO, Plaintiff Appellant, v. ACCENTURE FEDERAL SERVICES, LLC; ACCENTURE LLP, Defendants Appellees. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Claude M. Hilton, Senior District Judge. (1:12-cv-00857-CMH-TCB) Argued: January 30, 2014 Decided: May 5, 2014 Before GREGORY, SHEDD, and KEENAN, Circuit Judges. Affirmed by published opinion. Judge Shedd wrote the opinion, in which Judge Gregory and Judge Keenan joined. ARGUED: Stephen Z. Chertkof, HELLER, HURON, CHERTKOF, LERNER, SIMON & SALZMAN, PLLC, Washington, D.C., for Appellant. Jonathan F. Cohn, SIDLEY AUSTIN LLP, Washington, D.C., for Appellees. ON BRIEF: Eric D. McArthur, Paul J. Ray, SIDLEY AUSTIN LLP, Washington, D.C., for Appellees. SHEDD, Circuit Judge: Dr. Armand granting the Santoro motion appeals by the Accenture (Accenture) to compel arbitration. district court that the district Federal court s order Services, LLC Because we agree with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) does not invalidate the arbitration agreement between Accenture and Santoro, we affirm. I. Santoro began his employment with Accenture in 1997 as a senior manager. program manager IRS.gov. From 1998 until 2007, Santoro served as the for the Internal Revenue Service s website, From 2007 until September 2011, Santoro served as the account lead for Accenture s Department of the Treasury account. In August 2005, Santoro entered into an employment contract with Accenture. The contract indicated that it would renew on September 1 of each subsequent year unless either party provided timely notice that the contract would not be extended. contract, among other provisions, included an arbitration clause: Any and all disputes arising out of, relating to or in connection with this Agreement or your employment by Accenture, including, but not limited to, disputes relating to the validity, negotiation, execution, interpretation, performance or non-performance of the Agreement . . . shall be finally settled by arbitration. . . . Arbitrable disputes include without 2 The limitation employment and employment termination claims and claims by you for employment discrimination, harassment, retaliation, wrongful termination, or violations under Title VII . . . the Age Discrimination in Employment Act. (J.A. 20). In 2010, Santoro was given a new supervisor, who, according to Santoro s complaint, instantly disliked him. (J.A. 11). In September 2011, Santoro was terminated from his employment as an account executive as part of a cost-cutting measure. Santoro, who was 66 years old at the time, was replaced by a younger male employee. In response to his termination, Santoro filed a complaint against Accenture Columbia, District compel in alleging of Superior claims Columbia arbitration; the for Human age Rights Santoro Court for the District of under the discrimination Act. Accenture opposed Accenture s moved to motion, contending that the clause was void under three whistleblower provisions of Dodd-Frank: 7 U.S.C. § 26(n)(2), 1514A(e)(2), and 12 U.S.C. § 5567(d)(2). 1 18 U.S.C. § The Superior Court rejected Santoro s argument and granted the motion. The court also stayed the case pending arbitration. 1 Santoro does not rely on 12 U.S.C. § 5567(d)(2) in this appeal. 3 While that motion to compel arbitration was pending with the Superior Court, Santoro received a right-to-sue letter from the Equal Employment Opportunity Commission and filed an action in the Eastern District of Virginia, alleging claims under the Age Discrimination in Employment Act (ADEA), the Family and Medical Leave Act (FMLA), and the Employee Retirement Income Security Act (ERISA). Accenture moved in the district court to compel arbitration of these federal claims as well. hearing, the district court granted the motion. bench, the district court concluded that Following a Ruling from the Dodd-Frank only applies to certain situations when whistleblowers are involved. (J.A. 92). the That is, Dodd-Frank s provisions appl[y] only in situations that [are] set out by the statute only applies to whistleblowers. statute, and (J.A. 90). the Thus, because Santoro did not bring a Dodd-Frank whistleblower claim, he could not use Dodd-Frank to invalidate an otherwise valid arbitration agreement. Santoro noted a timely appeal. II. On appeal, Santoro contends that the district court erred in compelling court s arbitration. judgment We compelling review de arbitration, novo as the well district as any questions of state contract law concerning the validity of the arbitration agreement. Muriithi v. Shuttle Express, Inc., 712 F.3d 173, 178 (4th Cir. 2013). In Santoro s view, Dodd-Frank 4 invalidates traded in toto companies 2 whistleblower all that claims, whistleblower. arbitration lack even a if agreements carve-out the by for plaintiff publiclyDodd-Frank is not a Accenture contends that Dodd-Frank s scope is limited to plaintiffs bringing whistleblower claims. 3 For the following reasons, we agree with Accenture s interpretation of the statute. A. This case involves the intersection of two statutes, the Federal Arbitration Act (FAA) and Dodd-Frank. interpreting statutes we start with the plain language. When U.S. Dep t of Labor v. N.C. Growers Ass n, 377 F.3d 345, 350 (4th Cir. 2004). language is It is well established that when the statute s plain, the sole function of the courts-at least where the disposition required by the text is not absurd-is to 2 As relevant here, Dodd-Frank applies only to arbitration agreements by an employer subject to the Commodity Futures Trading Commission, 7 U.S.C. § 26(h)(1)(A), or a publicly-traded company and its private subsidiaries, 18 U.S.C. § 1514A. Accenture does not dispute that it is covered by Dodd-Frank. For purposes of this opinion, the term employer refers to employers covered by these statutes. 3 Accenture asserts two additional grounds for affirmance that applying Dodd-Frank in this case amounts to an improper retroactive application of the Act and that Santoro is collaterally estopped by the Superior Court s order compelling arbitration. Because we agree with Accenture that Dodd-Frank s scope is limited to plaintiffs bringing whistleblower claims, we have no occasion to address these alternate contentions. 5 enforce it according to its terms. 526, 534 (2004) (internal Lamie v. U.S. Tr., 540 U.S. quotation marks omitted). [I]n looking to the plain meaning, we must consider the context in which the statutory words are used because [w]e do not . . . construe statutory phrases in isolation; we read statutes as a whole. Ayes v. U.S. Dep t of Veterans Affairs, 473 F.3d 104, 108 (4th Cir. 2006) (quoting United States v. Morton, 467 U.S. 822, 828 (1984)). 223, 233 (1993) See also Smith v. United States, 508 U.S. ( Just as a single word cannot be isolation, nor can a single provision of a statute. ). read in In sum, [w]hen determining whether or not statutory language is plain, we consider the language itself, the specific context in which that language is used, and the broader context of the statute as a whole. Lincoln v. Dir., Office of Workers Comp. Programs, - -- F.3d ---, 2014 WL 929367, at *2 (4th Cir. 2014) (internal quotation marks omitted). B. Congress enacted the FAA in 1925 in response to widespread judicial hostility to arbitration agreements. LLC v. Concepcion, 131 S.Ct. 1740, 1745 (2011). AT&T Mobility Section 2 of the FAA provides that arbitration agreements shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. § 2. 9 U.S.C. The FAA embodies the national policy favoring arbitration 6 and places arbitration other contracts. U.S. 440, 443 agreements on equal footing with all Buckeye Check Cashing, Inc. v. Cardegna, 546 (2006). It thus represents a broad federal policy favoring arbitration agreements, Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983), and courts must rigorously enforce arbitration agreements according to their terms, Am. Express Co. v. Italian Colors Rest., 133 S.Ct. 2304, 2309 (2013) (internal quotation marks omitted). Federal statutory claims may be the subject of arbitration agreement, enforceable pursuant to the FAA. an Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991). exception exists, however, if the FAA s mandate overridden by a contrary congressional command. has An been Italian Colors Rest., 133 S.Ct. at 2309 (internal quotation marks omitted). Even then, [t]he burden is on the party opposing arbitration . . . to show that Congress intended to preclude a waiver of judicial remedies for the statutory rights at issue. Shearson/Am. Express, Inc. v. McMahon, 482 U.S. 220, 227 (1987). Here, it is undisputed that (1) Santoro s employment contract had an arbitration agreement; and (2) Santoro s federal claims fall within the broad all disputes language of that agreement. Santoro, however, seeks limitations on pointing to recent Frank. In Santoro s view, Dodd-Frank represents a contrary 7 to avoid arbitration arbitration made by by Dodd- congressional command that overrides the otherwise valid arbitration clause in his employment contract. C. As relevant here, one of the goals of Dodd-Frank was to strengthen whistleblower protections for employees illegal or fraudulent activity by their employer. reporting To this end, Congress enacted 7 U.S.C. § 26, which amended the Commodities Exchange Act by adding a provision prohibiting retaliation by a covered employer § 26(h)(1)(A). against The a statute whistleblower. creates a cause 7 of U.S.C. action for whistleblowers, § 26(h)(1)(B)(i), and then protects the cause of action through § 26(n), which provides: (n) Nonenforceability rights and remedies disputes of certain provisions waiving or requiring arbitration of (1) Waiver of rights and remedies The rights and remedies provided for in this section may not be waived by any agreement, policy form, or condition of employment including by a predispute arbitration agreement. (2) Predispute arbitration agreements No predispute arbitration agreement shall be valid or enforceable, if the agreement requires arbitration of a dispute arising under this section. 7 U.S.C. § 26(n). In addition to this amendment to the Commodities Exchange Act, Dodd-Frank enacted as part amended of the 18 U.S.C. § 1514A, Sarbanes-Oxley 8 Act which of was 2002. first This provision is titled Civil Action to protect against retaliation in fraud cases, and the first subsection is expressly labeled Whistleblower companies. and protection for employees of publicly traded Subsections (b) and (c) create a cause of action remedies provision. for violations of the substantive whistleblower The final subsection, § 1514A(e), then mirrors the language of 7 U.S.C. § 26(n), providing: Nonenforceability of certain provisions waiving rights and remedies or requiring arbitration of disputes. (1) Waiver of rights and remedies. The rights and remedies provided for in this section may not be waived by any agreement, policy form, or condition of employment, including by a predispute arbitration agreement. (2) Predispute arbitration agreements. No predispute arbitration agreement shall be valid or enforceable, if the agreement requires arbitration of a dispute arising under this section. 18 U.S.C. § 1514A(e). Santoro predispute contends arbitration that these agreements provisions lacking a invalidate Dodd-Frank all carve- out, even for plaintiffs who are not pursuing any whistleblower claims. Under Santoro s reading of the statute, because his contract with Accenture does not carve out Dodd-Frank claims from arbitration and thus requires arbitration of such claims, the entire arbitration agreement is not valid or enforceable. 9 D. Initially, it is clear that Dodd-Frank prohibits predispute agreements to arbitrate whistleblower claims. The Supreme Court in dicta has pointed to Congress s language in Dodd-Frank as a model of clarity CompuCredit Corp. Dodd-Frank works for v. to limiting Greenwood, render arbitration, 132 S.Ct. and 665, 672 nonenforceabl[e] provisions that require arbitration of disputes section. we agree. (2012). certain under this Thus, an agreement to arbitrate whistleblower claims is not valid or enforceable. This language represents a clear Congressional command that Dodd-Frank whistleblower claims are not subject to predispute arbitration. It does not follow, however, that Dodd-Frank likewise prohibits the arbitration of non-whistleblower claims simply because an arbitration agreement does not carve-out Dodd-Frank whistleblower claims. Instead, we think the language, context, and enactment of the statute lead to the opposite conclusion. To begin, the statute s language does not support Santoro s reading. Subsections 4 (1) and (2) both focus on the rights and remedies in this and under this section, i.e., whistleblower claims, and the prohibition of any provision that 4 Citations to subsections (1) and (2) refer to both 7 U.S.C. § 26(n) and 18 U.S.C. § 1514A(e). 10 would waive or limit judicial resolution of those claims, not of the many variety of claims that may arise during an employment relationship. Subsection (1) specifies that the rights under the statute the whistleblower cause of action cannot be waived by predispute arbitration. Subsection (2) simply reiterates that whistleblowers cannot waive their right to a civil action in a judicial forum by agreeing to arbitrate. requiring Santoro to arbitrate section; rather, it is a claim requiring him Accenture is not arising to under arbitrate this claims arising under other federal statutes pursuant to an otherwise valid arbitration agreement. Under Dodd-Frank, Congress has protected the right to bring a whistleblower cause of action in a judicial forum, nothing more. Santoro seeks to unmoor subsection (2) from its placement in Dodd-Frank and instead apply it as a broad, free-standing right, creating a windfall for non-whistleblowing employees. doing so, subsection he overlooks (2) and the both the broader limiting context of language the By within statute, in violation of the cardinal rule, that the statute is to be read as a whole since the meaning of statutory language, plain or not, depends on context. King v. St. Vincent s Hosp., 502 U.S. 215, 221 (1991) (citations omitted). we assume that the ordinary meaning To that end, even if of the phrase [n]o predispute arbitration agreement shall be valid is expansive, 11 its application is limited [§ 1514A] as a whole. by the broader context of Country Vintner of N.C., LLC v. E & J Gallo Winery, Inc., 718 F.3d 249, 259 (4th Cir. 2013) (quoting In re Total Realty Mgmt., LLC, 706 F.3d 245, 251 (4th Cir. 2013)). Dodd-Frank created causes of action for whistleblowers and then protected those causes of action by barring their waiver in predispute arbitration agreements. Nothing in Dodd-Frank suggests that Congress sought to bar arbitration of every claim if the arbitration agreement in question did not exempt DoddFrank claims. 5 Nothing in Dodd-Frank even refers to arbitration apart from this limited reference in these statutory provisions that are otherwise concerned solely with the creation of a cause of action for whistleblowing employees. To conclude otherwise would be to forget that Congress . . . does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions it does not one might say, hide elephants 5 Santoro notes that Congress has used more circumscribed language in other statutes that bar claims from being arbitrated to support his reading of Dodd-Frank. See, e.g., 12 U.S.C. § 5567(d)(2) (provision of the Consumer Financial Protection Act that prohibits arbitration agreements only to the extent that [they require] arbitration of a dispute arising under this section ). The fact that Congress used alternate language in another statutory context does not persuade us that Congress intended Dodd-Frank to be as expansive as Santoro suggests, nor does it mean that Congress cannot make the same point using different language. 12 in mouseholes. Gonzales v. Oregon, 546 U.S. 243, 267 (2006) (internal quotation marks omitted). But that is exactly what Santoro this requests concluding essentially grafted a new that in section onto mousehole, the FAA by Congress requiring every employer s arbitration agreement to carve out an exception for whistleblowers. Santoro cannot represents a meet Given the statute s language and context, his contrary burden of congressional showing command that Dodd-Frank overriding the validity of arbitration clauses as to non-whistleblower claims. Our conclusion is further buttressed surrounding the enactment of Dodd-Frank. enacted these provisions of Dodd-Frank by the context At the time Congress it against two background pieces of information. was legislating First, courts had consistently held that whistleblower claims under Sarbanes-Oxley were subject to arbitration. See Guyden v. Aetna, Inc., 544 F.3d 376, 383-84 (2d. Cir. 2008). 6 In addition, the Supreme Court had noted in dicta that non-waiver of rights provisions like § 26(n)(1) and § 1514A(e)(1) did not explicitly preclude 6 In fact, the first case reaching this conclusion was decided only a year after Congress enacted Sarbanes-Oxley. Boss v. Salomon Smith Barney Inc., 263 F.Supp.2d 684 (S.D.N.Y. 2003). 13 arbitration or other nonjudicial resolution of claims. Gilmer, 500 U.S. at 29. 7 Congress is presumed to act with awareness of a judicial interpretation of a statute. Sayyed v. Wolpoff & Abramson, 485 F.3d 226, 231 (4th Cir. 2007). Thus, in enacting Dodd-Frank, Congress would have been aware that Sarbanes-Oxley whistleblower claims were subject to arbitration and that non-waiver of rights provisions like § 26(n)(1) and § 1514A(e)(1) may not, standing alone, override the FAA. conclusion clear by that Dodd-Frank supporting the This background further supports the simply overrules non-waiver of Guyden rights and makes language of subsection (1) with the explicit language of subsection (2) that whistleblower claims cannot be subject to predispute agreements to arbitrate. Accordingly, pursuing we Dodd-Frank § 26(n)(2), nor 18 hold that, whistleblower U.S.C. where the claims, § 1514A(e)(2) plaintiff neither overrides mandate that arbitration agreements are enforceable. 8 is not 7 U.S.C. the FAA s Because 7 In CompuCredit, the Court reiterated that [i]t takes a considerable stretch to regard [a] nonwaiver provision as a congressional command that the FAA shall not apply. CompuCredit, 132 S.Ct. at 671. 8 In reaching this conclusion, we find ourselves in accord with the Fifth Circuit. See Holmes v. Air Liquide USA, LLC, 498 Fed. App x 405, 407 (5th Cir. 2012) (enforcing arbitration agreement where [plaintiff] brings no Dodd-Frank claims, and (Continued) 14 Santoro is not pursuing a dispute under this section DoddFrank does not bar arbitration of Santoro s federal claims. III. For the foregoing reasons, we affirm the district court s order compelling arbitration of Santoro s federal claims. AFFIRMED the Agreement does not require arbitration of a dispute arising under Dodd-Frank). Our conclusion likewise comports with several district courts to have considered the issue, see Yegin v. BBVA Compass, 2013 WL 622565, *2 (N.D. Ala. Feb. 19, 2013); Rodriguez v. Charles Schwab Corp., 2013 WL 911959, *5 (W.D. Tenn. Jan. 29, 2013), and is consistent with those decisions concluding that Dodd-Frank does bar arbitration of covered whistleblower claims, see Wong v. CKX, Inc., 890 F.Supp.2d 411, 421 (S.D.N.Y. 2012) (noting whistleblower claims are no longer arbitrable ); Pezza v. Investors Capital Corp., 767 F.Supp.2d 225, 227 (D. Mass. 2011) (noting Dodd-Frank Act enacted a bar to predispute arbitration agreements for whistleblower claims ). 15
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