S. HRG. 111–396 ‘‘WORKPLACE FAIRNESS: HAS THE SUPREME COURT BEEN MISINTERPRETING LAWS DE- SIGNED TO PROTECT AMERICAN WORKERS FROM DISCRIMINATION?’’ HEARING BEFORE THE COMMITTEE ON THE JUDICIARY UNITED STATES SENATE ONE HUNDRED ELEVENTH CONGRESS FIRST SESSION OCTOBER 7, 2009 Serial No. J–111–55 Printed for the use of the Committee on the Judiciary ( U.S. GOVERNMENT PRINTING OFFICE 56–089 PDF WASHINGTON : 2010 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 07:39 May 11, 2010 Jkt 056089 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\GPO\HEARINGS\56089.TXT SJUD1 PsN: CMORC COMMITTEE ON THE JUDICIARY PATRICK J. LEAHY, Vermont, Chairman HERB KOHL, Wisconsin JEFF SESSIONS, Alabama DIANNE FEINSTEIN, California ORRIN G. HATCH, Utah RUSSELL D. FEINGOLD, Wisconsin CHARLES E. GRASSLEY, Iowa CHARLES E. SCHUMER, New York JON KYL, Arizona RICHARD J. DURBIN, Illinois LINDSEY GRAHAM, South Carolina BENJAMIN L. CARDIN, Maryland JOHN CORNYN, Texas SHELDON WHITEHOUSE, Rhode Island TOM COBURN, Oklahoma AMY KLOBUCHAR, Minnesota EDWARD E. KAUFMAN, Delaware ARLEN SPECTER, Pennsylvania AL FRANKEN, Minnesota BRUCE A. COHEN, Chief Counsel and Staff Director MATT MINER, Republican Chief Counsel (II) VerDate Nov 24 2008 07:39 May 11, 2010 Jkt 056089 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\GPO\HEARINGS\56089.TXT SJUD1 PsN: CMORC C O N T E N T S STATEMENTS OF COMMITTEE MEMBERS Page Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont .................... 1 prepared statement .......................................................................................... 185 Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama .......................... 3 WITNESSES de Bernardo, Mark A., Partner, Jackson Lewis, LLP, Washington, DC ............. 8 Foreman, Michael, Professor & Director, Civil Rights Appellate Clinic, Dickin- son Section of Law, Pennsylvania State University, University Park, Penn- sylvania ................................................................................................................. 12 Fox, Michael W., Shareholder, Ogletree, Deakins, Nash, Smoak & Steward, P.C., Austin, Texas ............................................................................................... 10 Gross, Jack, Des Moines, Iowa ............................................................................... 7 Jones, Jamie Leigh, Founder/Chief Executive Officer, The Jamie Leigh Foun- dation, Spring, Texas ........................................................................................... 5 QUESTIONS AND ANSWERS Responses of Mark A. de Bernardo to questions submitted by Senator Ses- sions ...................................................................................................................... 28 Responses of Michael W. Fox to questions submitted by Senator Sessions ....... 42 SUBMISSIONS FOR THE RECORD Coleman, Francis T., Waffling Circuits, article ..................................................... 46 Davis, Daniel J., Gibson, Dunn & Crutcher, LLP, Washington, DC, article ...... 53 de Bernardo, Mark A., Partner, Jackson Lewis, LLP, Washington, DC ............. 59 Foreman, Michael, Professor & Director, Civil Rights Appellate Clinic, Dickin- son Section of Law, Pennsylvania State University, University Park, Penn- sylvania ................................................................................................................. 81 Fox, Michael W., Shareholder, Ogletree, Deakins, Nash, Smoak & Steward, P.C., Austin, Texas ............................................................................................... 95 Gross, Jack, Des Moines, Iowa ............................................................................... 136 Hill, Elizabeth, Dispute Resolution Journal, May/July 2003, article .................. 142 JAMS, Washington, DC: June 26, 2009, article 150 August 2002, article 153 July 15, 2009, article 156 Jones, Jamie Leigh, Founder/Chief Executive Officer, The Jamie Leigh Foun- dation, Spring, Texas ........................................................................................... 176 LexisNexis, New York University Law Review, Albany, New York: Estreicher, Samuel, December 1997, article .................................................. 187 Maltby, Lewis L., Fall 1998, article ................................................................ 213 Mogilnicki, Eric J. and Kirk D. Jensen, Spring 2003, article .............................. 237 Townsend, John M., U.S. Chamber Institute for Legal Reform, Washington, DC, October 2006, agreements ............................................................................ 257 U.S. District Court, Judicial Case load Profile, report ......................................... 286 Westlaw, Dianne LaRocca, report .......................................................................... 287 (III) VerDate Nov 24 2008 07:39 May 11, 2010 Jkt 056089 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\GPO\HEARINGS\56089.TXT SJUD1 PsN: CMORC VerDate Nov 24 2008 07:39 May 11, 2010 Jkt 056089 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\GPO\HEARINGS\56089.TXT SJUD1 PsN: CMORC ‘‘WORKPLACE FAIRNESS: HAS THE SUPREME COURT BEEN MISINTERPRETING LAWS DE- SIGNED TO PROTECT AMERICAN WORKERS FROM DISCRIMINATION?’’ WEDNESDAY, OCTOBER 7, 2009 U.S. SENATE, COMMITTEE ON THE JUDICIARY, Washington, DC. The Committee met, Pursuant to notice, at 10 a.m., in room SD– 226, Dirksen Senate Office Building, Hon. Patrick J. Leahy, Chair- man of the Committee, presiding. Present: Senators Specter, Franken, Sessions, and Grassley. OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM THE STATE OF VERMONT Chairman LEAHY. Good morning. This week the U.S. Supreme Court met to officially begin its new term. While I talked about this yesterday at another Committee I thought we would have this hearing to highlight how decisions of the Supreme Court affect the everyday lives of Americans. And what we see on the headlines about a U.S. Supreme Court decision may look one way, but with the average Americans it can have quite an effect. Our hearing will focus on how a bare majority of the Supreme Court has overridden statutory protections to make it more difficult to prove age discrimination in the workplace. In two narrowly di- vided 5/4 decisions the conservative majority of the court threatens to eliminate more of America’s civil rights in the workplace. Just as it eliminated Lilly Ledbetter’s claim to equal pay, basically said a woman does not have to be paid the same as a man until Con- gress stepped in to set the law right. It is difficult that we have these laws on the books. For some time it worked very well to protect Americans and then time and time again, the very, very activist, Supreme Court, overturns them. Their recent decisions make it more difficult for victims of employ- ment discrimination to seek relief in court, more difficult for those victims to get their day in court to vindicate their rights. For anyone that doubts that there is this activism in our courts and the effect it is having, they need to look no further than the decisions that are affecting two of our witnesses, Jamie Leigh Jones and Jack Gross. The Supreme Court’s misinterpretation of the Federal Arbitra- tion Act in the Circuit City case threatens to undermine the effec- tive enforcement of our Civil Rights laws. (1) VerDate Nov 24 2008 07:39 May 11, 2010 Jkt 056089 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\56089.TXT SJUD1 PsN: CMORC 2 When Congress passed the Arbitration Act, passed by a bipar- tisan majority, it intended to provide sophisticated businesses an alternative venue to resolve their disputes. That is what was in- tended. I know what was not intended. Congress never intended the law to become a hammer for corporations to use against their employ- ees. But in Circuit City the Supreme Court allowed for just that. Now, after the Circuit City decision, employers are able to unilat- erally strip their employees of their Civil Rights by including arbi- tration clauses in every employment contract they draft. Some have estimated that at least 30 million workers have unknowingly waived their constitutional and guaranteed right to have Civil Rights claims resolved by a jury by accepting employment which necessarily meant signing a contract that included such a clause in the fine print. There is no rule of law in arbitration. There are no juries, there are no independent judges in the arbitration industry. There is no appellate review. There is no transparency. And we are going to hear from Jamie Leigh Jones today, there is no justice. We will also hear from Mr. Gross. His case shows that for those employees who are able to preliminary open the courtroom doors, the Supreme Court then placed additional obstacles on the path to justice. Let me just tell you a little bit about it. After spending 32 years working for an Iowa subsidiary of a major financial company, Jack Gross was demoted, and his job duties were reassigned to a young- er worker who was significantly less qualified. In his lawsuit under the Age Discrimination Act, a jury con- cluded that age had been the motivating factor in his demotion and they awarded him nearly $50,000 in lost compensation. But a slim, activist, conservative majority of the Supreme Court overturned the jury verdict and decided to rewrite the law. The five justices adopted