KETLER BOSSÉ, Plaintiff, Appellee, v. NEW YORK LIFE INSURANCE COMPANY; NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION; NEW YORK LIFE INSURANCE COMPANY OF ARIZONA, Defendants, Appellants.
No. 19-2240
United States Court of Appeals For the First Circuit
March 30, 2021
Before Howard, Chief Judge, Lynch and Barron, Circuit Judges.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE [Hon. Steven J. McAuliffe, U.S. District Judge]
Michael L. Banks, with whom David C. Dziengowski and Morgan, Lewis & Bockius LLP were on brief, for appellants.
Robert M. Fojo, with whom Fojo Law, P.L.L.C. was on brief, for appellee.
* Judge Torruella heard oral argument in this matter and participated in the semble, but he did not participate in the issuance of the panel‘s opinion in this case. Chief Judge Howard was substituted for Judge Torruella on the panel pursuant to Internal Operating Procedure VII(D)(4). Chief Judge Howard read the briefs, reviewed the record, and listened to the audio recording of oral argument.
Bossé had a continuous business relationship with New York Life for about fifteen years, during which time he worked both as an independent contractor and, from 2004 to 2005, as an employee. In 2016, New York Life terminated its business relationship with Bossé.
Bossé brought this action in federal court alleging race discrimination by New York Life in violation of
The district court refused to do either. We hold that the district court‘s reasoning contravened the holdings in Supreme Court decisions. The clause delegating all disputes about arbitrability is clear, unmistakable, and unambiguous. It should have been enforced on those terms. And even if there were any ambiguity, and we see none, the presumption in favor of arbitrability would lead to the same result. Reversal is required under the Federal Arbitration Act (“FAA“) and Supreme Court opinions interpreting the FAA, and none of Bossé‘s other arguments would permit affirmance.
I.
A. Facts
Because this appeal arises from an order on a motion to stay proceedings and to compel arbitration in connection with a
1. Bossé Is Hired as an Agent
Bossé began his business relationship with New York Life in 2001 when he was hired as an agent. Bossé believes he was the first black agent hired by New York Life in New Hampshire and remained the only black agent working in New Hampshire as late as 2012.
Under the terms of the Agent‘s Contract, which he executed with New York Life on November 15, 2001, Bossé was authorized to solicit applications for various life and health insurance and annuity policies, for which he earned commissions. He, however, did not remain an agent but was promoted.
2. The Partner‘s Employment Agreement
On March 25, 2004, Bossé entered into a Partner‘s Employment Agreement (“the Employment Agreement” or “the Agreement“) with New York Life.1 It is the terms of this Employment Agreement that are at issue. The first line in the Employment Agreement specifically identifies “KETLER BOSSE” as “PARTNER,” and below that the Agreement states “NEW YORK LIFE INSURANCE COMPANY hereby authorizes the employment of the person named above as Partner.” The signature line at the end of the Agreement, on which Bossé signed, is designated as “Partner Signature.” It is undisputed that when Bossé entered the Employment Agreement, he was a Partner. Under that Agreement, Bossé was paid a salary and given the responsibility to recruit, to train, and to supervise agents under the direction of a Managing Partner.
The Employment Agreement included an arbitration clause, which specifies that
[t]he Partner and New York Life agree that any dispute, claim or controversy arising between them, including those alleging employment discrimination (including sexual harassment and age and race discrimination) in violation of a statute (hereinafter “the Claim“), as well as any dispute as to whether such Claim is arbitrable, shall be resolved by an arbitration proceeding administered by the [National Association of Securities Dealers (“NASD“)] in accordance with its arbitration rules.
The arbitration clause also provides that
[i]n the event that the NASD refuses to arbitrate the Claim, the Partner and New York Life agree that the Claim, as well as any dispute as to whether such Claim is arbitrable, shall be resolved by an arbitration proceeding administered by the American Arbitration Association [(“AAA“)] in accordance with its National Rules for the Resolution of Employment Disputes [(“NRRED“)].
As specified in the text, such disputes must be resolved under certain specified rules. We highlight those rules. The NASD referenced in the arbitration clause has been succeeded by the Financial Industry Regulatory Authority (“FINRA“) and it is undisputed that the reference to the NASD rules should be read as incorporating the FINRA rules. FINRA Rule 13413 provides that “[t]he panel has the authority to interpret and determine the applicability
Finally, the Agreement contains a “Survival” clause, which provides that various provisions of the contract “shall survive termination of this . . . Employment Agreement by either party for any reason.” The arbitration clause is one of those provisions the parties expressly provided would survive termination of the Agreement.
3. Bossé‘s Subsequent Work as an Agent and District Agent and the Alleged Race Discrimination
At some point in 2005, Bossé transitioned back to working as a contractor with New York Life under the Agent‘s Contract. That contract did not contain an arbitration clause. He worked with New York Life in that capacity until 2013, when he became a District Agent.
Under the District Agent Agreement, Bossé was authorized to establish his own firm separate from New York Life‘s general office, at his own expense, and to hire his own agents, and he had other responsibilities in addition to his normal duties as an agent. The District Agent Agreement explicitly stated that District Agents are “independent contractor[s] for all purposes” and that it “does not and will not be construed to create the relationship of employer and employee between New York Life and [the] District Agent.” The District Agent Agreement did not contain an arbitration clause.
On January 15, 2016, Bossé was terminated from his business relationship with New York Life pursuant to the at-will employment provision in his Agent‘s Contract. He alleges he was told he was being terminated because he had provided false or inaccurate information in processing an electronic life insurance application for his ex-wife. Bossé denies any such misconduct and asserts that the purported reason for his termination was pretextual and that the real reason for his termination was his race.
Generally, Bossé contends that New York Life and specific employees undermined his relationships with his customers and his agents in various ways. Bossé claims that he complained of this misconduct to New York Life employees on several occasions from 2013 to 2015, but that no action was taken to address it. He asserts that white agents were not subject to this mistreatment and that it constituted a pattern and practice of discrimination because of his race and because he had recruited many minority agents to his unit.
B. Procedural History
On February 12, 2016, Bossé filed a charge of racial discrimination and retaliation with the New Hampshire Commission for Human Rights (“the Commission“). New York Life defended that charge by producing to the Commission a copy of the Agent‘s Contract, which established that Bossé was an independent contractor, rather than an employee, at the time of the alleged misconduct. The Commission thus dismissed the charge for lack of jurisdiction. New York Life did not argue to the Commission that the charge of discrimination was subject to binding arbitration and should have been dismissed on that basis.
On January 7, 2019, Bossé filed a complaint against New York Life Insurance Company, New York Life Insurance and Annuity Corporation, and New York Life Insurance Company of Arizona (collectively “New York Life“) in federal court in New Hampshire. He brought claims for race discrimination and retaliation under
On April 9, 2019, New York Life filed a motion to dismiss or, in the alternative, to stay proceedings and to compel arbitration pursuant to Sections 3 and 4 of the FAA.4
the Employment Agreement and that Bossé‘s claims fell within the scope of the broad arbitration clauses. We refer to the arbitration clauses rather than a single clause because under the “Arbitration” heading in the Agreement there are separate provisions in separate paragraphs. New York Life argued that under the clauses, any disputes about the scope of the agreement to arbitrate were explicitly assigned to the arbitrator to determine.
Bossé opposed New York Life‘s motion.
On November 13, 2019, the district court denied New York Life‘s motion to stay proceedings and to compel arbitration. Bossé v. N.Y. Life Ins. Co., No. 19-cv-016-SM, 2019 WL 5967204, at *6 (D.N.H. Nov. 13, 2019). The district court determined that the question of whether these disputes fell within the arbitration clauses was for it to resolve and not the arbitrator. See id. at *4-5. It concluded that the language of the arbitration agreement presented an issue of contract formation under New York state law. See id. It also held that Section 2 of the FAA “itself requires that an arbitration clause have some relationship to, some connection with, the agreement or contract, as a condition of federal enforcement.” Id. at *5. Finding no such relationship between the Employment Agreement and Bossé‘s claims here, the district court refused to enforce the arbitration clauses.5 Id. at *6.
New York Life timely appealed.
We have jurisdiction over an interlocutory appeal of a denial of a motion to stay proceedings or to compel arbitration. Marie v. Allied Home Mortg. Corp., 402 F.3d 1, 6 (1st Cir. 2005) (citing
A. The District Court Erred in Not Referring Disputes as to the Arbitrability of the Claims to the Arbitrator
1. Disputes as to the Arbitrability of the Claims Are Clearly, Unmistakably, and Unambiguously Delegated to the Arbitrator
It is well-settled that arbitration is a matter of contract.6 See, e.g., Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1415-16 (2019); Granite Rock Co. v. Int‘l Brotherhood of Teamsters, 561 U.S. 287, 296-97, 299 (2010); First Options, 514 U.S. at 943. The Supreme Court has made clear that where the parties have agreed to arbitrate, the FAA requires “courts [to] ‘rigorously enforce’ arbitration agreements according to their terms.” Am. Express Co. v. Italian Colors Rest., 570 U.S. 228, 233 (2013) (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 221 (1985)); see also Lamps Plus, 139 S. Ct. at 1412, 1416.
That applies to the enforcement of delegation clauses.7 In Henry Schein, the Supreme Court emphasized that where the
parties “by clear and unmistakable evidence” delegate issues of arbitrability to the arbitrator, “the courts must respect the parties’ decision as embodied in the contract” and send the issue to the arbitrator to decide. 139 S. Ct. at 528, 530 (internal quotation marks omitted) (quoting First Options, 514 U.S. at 944); see also AT & T Techs., Inc. v. Commc‘ns Workers of Am., 475 U.S. 643, 649 (1986). It held that a court cannot decide the
Henry Schein builds on the Supreme Court‘s earlier decisions, which reinforce this rule. “[C]ourts should order arbitration of a dispute only where the court is satisfied that neither [(1)] the formation of the parties’ arbitration agreement nor [(2)] (absent a valid provision specifically committing such disputes to an arbitrator) its enforceability or applicability to the dispute is in issue.” Granite Rock, 561 U.S. at 299 (second emphasis added) (citing First Options, 514 U.S. at 943); see also id. at 301, 303.
Bossé does not argue that the arbitration agreement was invalidly formed. Nor does he challenge the validity or formation of the delegation clause specifically.9 Rather, he asserts that the arbitration agreement and the delegation clause do not apply to his particular claims. The district court reasoned that the issue was for it, not the arbitrator, to decide and then determined the issue, in agreement with Bossé.10 See Bossé, 2019 WL 5967204, at *4-5.
We hold that the text of the parties’ agreement clearly, unmistakably, and unambiguously delegates the arbitrability dispute at issue here to the arbitrator. The district court erred in not enforcing that agreement according to its own language and in not referring the dispute about whether Bossé‘s claims are arbitrable to the arbitrator.
First, the text of the arbitration agreement contains an express delegation clause. The arbitration agreement states
Moreover, the situation in Wexler is quite different from that here. Unlike the customers who “check[ed] a box accepting the ‘terms and conditions’ necessary to obtain cell phone service,” id. at 504, Bossé is a sophisticated party who had an ongoing business relationship with New York Life and who submitted no evidence that he did not understand the terms of the arbitration agreement, the delegation clause, or the survival clause.
particular type of claim or dispute. It is not the role of the court to rewrite the parties’ contract. See Lamps Plus, 139 S. Ct. at 1412, 1416; Italian Colors Rest., 570 U.S. at 233.
Second, the Employment Agreement also contains other text indicating the parties’ clear and unmistakable intent in addition to the text of the express delegation clause. The arbitration clauses provide that “[t]he Partner and New York Life agree that any dispute, claim or controversy arising between them, . . . as well as any dispute as to whether such Claim is arbitrable, shall be resolved by an arbitration proceeding administered by the NASD in accordance with its arbitration rules” and that “[i]n the event that the NASD refuses to arbitrate the Claim, the Partner and New York Life agree that the Claim, as well as any dispute as to whether such Claim is arbitrable, shall be resolved by an arbitration proceeding administered by the [AAA] in accordance with its [arbitration rules].” Rule 6(a) of the AAA Employment Arbitration Rules and Mediation Procedures explicitly gives the issue of whether claims are arbitrable to the arbitrator to decide. That rules states that “[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement.” This Court is clear that incorporation of the AAA arbitration rules constitutes clear and unmistakable evidence of the parties’ intent to delegate arbitrability issues to the arbitrator. Awuah v. Coverall N. Am., Inc., 554 F.3d 7, 11-12 (1st Cir. 2009).
Other text in the Employment Agreement mandates our result. The survival clause reinforces the parties’ intent that issues of arbitrability be decided by an arbitrator even after that Agreement was terminated. See Breda v. Cellco P‘ship, 934 F.3d 1, 7 (1st Cir. 2019); see also Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 205-06 (1991). Bossé largely ignores the survival clause in his briefing, instead arguing that the clause is “irrelevant.” The clause is not irrelevant.11
The cases which Bossé cites in support of his argument that there is no clear and unmistakable evidence of delegation of the
Bossé also argues that the court must assess whether the particular dispute falls within the scope of the arbitration agreement to determine whether the arbitrability of that dispute was delegated to the arbitrator. He argues the question of the scope of the delegation clause is distinct from but related to the scope of the arbitration agreement. His attempted atomization of the arbitrability question is prohibited by the Supreme Court‘s reasoning in Henry Schein. The question of the scope of the delegation clause cannot be separated from the question of the scope of the arbitration agreement as a whole here. His argument has it backwards.
The delegation clause uses the term “such Claim,” which is a defined term that refers to “any dispute, claim or controversy arising between them.” That term also establishes the scope of the arbitration agreement as a whole. Because of the incorporation of this defined term into the delegation clause, any decision as to whether a dispute falls within the scope of the delegation clause necessarily decides whether it falls within the scope of the arbitration agreement. Bossé‘s reasoning is thus circular: it requires the court to consider for itself whether a particular claim falls within the scope of the arbitration agreement and delegation clause in order to determine whether the dispute should be submitted to the arbitrator to determine its arbitrability. At that point, the arbitrability question has already been answered by the court, and the delegation clause here is rendered
meaningless.13 This is precisely the type of “short-circuit[ing]
Finally, Bossé contends, and the district court determined, that Section 2 of the FAA requires that an arbitration clause have some relationship or connection to the underlying contract to be enforceable, which the clauses purportedly lacked with respect to Bossé‘s claims here.14 We have found no Supreme Court or circuit case law -- and Bossé has not directed us to any -- which supports his contention regarding the “arising out of” language in Section 2 of the FAA.15
2. Even Were There Some Purported Ambiguity, the Presumption in Favor of Arbitrability Also Requires that This Dispute as to the Arbitrability of the Claims Be Referred to the Arbitrator to Decide
The FAA reflects a “liberal federal policy favoring arbitration agreements,” Oliveira v. New Prime, Inc., 857 F.3d 7, 12 (1st Cir. 2017) (quoting Moses H. Cone Mem‘l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)), in which there is a presumption that “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration,” Moses H. Cone Mem‘l Hosp., 460 U.S. at 24-25; see also Granite Rock, 561 U.S. at 301-03; First Options, 514 U.S. at 944-45. The Supreme Court in First Options made clear that where an agreement to arbitrate some issues exists, and there is a dispute over the scope of the arbitration agreement, the law requires that those matters be presumed to be arbitrable “unless it is clear that the arbitration clause has not included them.” 514 U.S. at 945 (internal quotation marks omitted) (quoting G. Wilner, 1 Domke on Commercial Arbitration § 12.02, at 156 (rev. ed. Supp. 1993)).
Even if there were some ambiguity, under First Options we apply the presumption in favor of arbitrability in determining the scope of the delegation clause. Given the broad language of the arbitration
B. New York Life Did Not Forfeit Its Rights Under Either the Doctrine of Judicial Estoppel or Waiver
Bossé also asserts that New York Life forfeited its right to arbitrate his claims as a result of both judicial estoppel and waiver. The district court did not address these arguments. We address them because they are quintessentially legal issues and no further development of the record is needed to resolve them. See United States v. Kin-Hong, 110 F.3d 103, 116 (1st Cir. 1997). We find neither argument persuasive.
Bossé argues that New York Life should be judicially estopped from and that it has waived any ability to compel arbitration because it did not assert its right to arbitrate during the proceedings before the New Hampshire Commission for Human Rights. New York Life defended those proceedings by submitting a copy of Bossé‘s Agent‘s Contract to support its argument that he was not an employee at the time of the alleged misconduct and the Commission lacked jurisdiction over his claims.
“[T]he doctrine of judicial estoppel prevents a litigant from pressing a claim that is inconsistent with a position taken by that litigant either in a prior legal proceeding or in an earlier phase of the same legal proceeding.” InterGen N.V. v. Grina, 344 F.3d 134, 144 (1st Cir. 2003) (citing Pegram v. Herdrich, 530 U.S. 211, 227 n.8 (2000)). It “is designed to ensure that parties proceed in a fair and aboveboard manner, without making improper use of the court system.” Id. (citing New Hampshire v. Maine, 532 U.S. 742, 749-50 (2001)). There are two elements to a claim of implied waiver of the right to arbitrate through inaction: (1) “undue delay” and (2) “a modicum of prejudice to the other side.” Rankin v. Allstate Ins. Co., 336 F.3d 8, 12 (1st Cir. 2003); see also Marie, 402 F.3d at 15.
There is no inconsistency and no undue delay from New York Life asserting the jurisdictional defense to the Commission, rather than invoking the arbitration agreement. The Commission was a third party not bound by the terms of the arbitration agreement. See Marie, 402 F.3d at 15. There is no issue before us as to whether the Commission had jurisdiction, and it certainly was not unfair or improper for New York Life to assert this jurisdictional defense.
III.
On remand, the district court must enter an order compelling arbitration and issue a stay upon sending the matter to the arbitrator pursuant to
Reversed and remanded. No costs are awarded.
-Dissenting Opinion Follows-
If the Employment Agreement said nothing more than what I have just quoted from it, then it would be clear that the parties had left the answer to that question about the meaning of “the Claim” -- and, thus, about the scope of the arbitration agreement that they had reached -- to a court to resolve. But, the majority points out, the Employment Agreement also contains what is known as a delegation clause, which operates as an ancillary agreement to arbitrate certain specified matters concerning arbitrability. See Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 529 (2019). And, that delegation clause provides that “[t]he Partner and New York Life agree that . . . any dispute as to whether such Claim is arbitrable[] shall be resolved by [] arbitration.”
The majority holds that the inclusion of this delegation clause in the Employment Agreement is dispositive of this appeal, because that clause is best construed to delegate to an arbitrator the question of the meaning of “Claim” in the arbitration agreement itself and thus the question of whether that term covers the race discrimination suit that Ketler Bossé brings. Thus, the majority concludes that the District Court erred in construing the scope of the arbitration agreement not to encompass Bossé‘s suit, because the question of whether the arbitration agreement encompasses that suit was for an arbitrator and not for the District Court to decide.
I cannot agree with that conclusion. It derives from a superficially plausible but, in my view, ultimately textually untenable construction of the delegation clause. Nor can I agree with New York Life‘s contention that, even if the parties to the Employment Agreement did not agree to delegate the question regarding the scope of the arbitration agreement to an arbitrator to resolve, the District Court erred in resolving that question as it did. I thus write separately to explain why I would affirm the District Court‘s ruling.
I.
There is no doubt that it would have been possible for Bossé and New York Life to have drafted an employment contract back in 2004 that would have contained both a delegation clause and an arbitration agreement that would have, in combination, sought to ensure that an arbitrator rather than a court would decide whether any future lawsuit between them -- no matter how far in the future the actionable conduct on which it would be based would have first occurred -- was the type of lawsuit that they had agreed to resolve through arbitration. But, the Employment Agreement that they actually wrote does not contain a delegation clause that assigns such a question of the scope of the arbitration agreement to an arbitrator.
But, the words that the delegation clause actually uses are not the ones that the majority deploys in its shorthand account of what that clause “expressly require[s].” And, that shorthand account fails properly to account for the words “such Claim” that figure so prominently in the delegation clause.
That is not to say that the majority makes no attempt to account for those two words in explaining why its paraphrase of the delegation clause is accurate. It explains that the paraphrase is revealed to be accurate if one substitutes for the words “such Claim” in the delegation clause the definition of “the Claim” that the arbitration agreement sets forth: “any dispute, claim or controversy arising between them.” See id. at 16-17.
According to the majority, such a substitution produces a delegation clause that provides that “any dispute as to whether [any dispute, claim or controversy arising between them] is arbitrable, shall be resolved by [] arbitration.” Id. at 16. For that reason, the majority concludes, the plain text of the delegation clause ensures that “any dispute” between the parties to the Employment Agreement over the meaning of the scope of the arbitration agreement is for an arbitrator and not a court to decide. After all, the majority contends, a “dispute” over the meaning of “the Claim” in the arbitration agreement is itself obviously a “dispute” between the parties, such that the plain text of the delegation clause necessarily encompasses it once the substitution described above is made. See id.
But, this purportedly plain text reading of the delegation clause fails to grapple with the use in that clause of the word “such,” which modifies the key word “Claim.” This failure is of concern, because the word “such,” as a matter of grammar, ensures that the word in the delegation clause that it modifies -- “Claim” -- can be no more encompassing than the word “Claim” in the arbitration agreement to which the word “such” refers. See, e.g., United States v. Bowen, 100 U.S. 508, 512 (1879) (finding that “the qualifying word such . . . restricted” the referent to the “class” of individuals “described in the sentence which immediately precede[d] it“); Littlefield v. Mashpee Wampanoag Indian Tribe, 951 F.3d 30, 37 (1st Cir. 2020) (quoting Webster‘s New International Dictionary, according to which the word “such” means among other things “of the sort or degree previously indicated or contextually implied,” and concluding that “[n]ormal usage in the English language would read the word ‘such’ as referring to the entire antecedent phrase” (emphasis added)); United States v. Ahlers, 305 F.3d 54, 59-61 (1st Cir. 2002) (finding that the use of the word “such” in
Thus, the simple substitution that the majority makes, in which it swaps out the words “such Claim” in the delegation clause for the words that the arbitration
The arbitration agreement in using the words “any dispute, claim or controversy arising between them” to define “the Claim” is necessarily referring only to the class of “dispute[s], claim[s] or controvers[ies]” that the arbitration agreement itself encompasses. And, that is a class of “disputes” -- to use a shorthand for what it includes -- that obviously does not itself encompass disputes about the arbitrability of those disputes. Indeed, were that not the case, the delegation clause that is the majority‘s focus would be superfluous. Thus, that class does not itself encompass the particular dispute over arbitrability that is at issue here, which concerns the scope of that very class, because the arbitration agreement is not the place to look for an agreement to arbitrate about arbitrability -- only the delegation clause is, as the majority‘s own focus on that delegation clause to determine whether it encompasses this dispute over arbitrability implicitly acknowledges.
It is no objection to this more modest construction of the delegation clause‘s scope, in my view, that it limits the range of disputes about arbitrability that the clause encompasses to fewer than all possible disputes about arbitrability. A delegation clause need not delegate every issue of arbitrability, as the parties are free to decide between themselves which, if any, issues of arbitrability they wish for an arbitrator to resolve.
Nor is this a case in which a limited reading of the delegation clause renders that clause useless. Although the word “such” plainly limits the reach of the delegation clause for the reasons that I have explained, the clause still clearly and unmistakably assigns to an arbitrator the resolution of disputes over whether the class of “dispute[s], claim[s] or controvers[ies]” that the arbitration agreement covers -- whatever that class encompasses in terms of scope -- are “arbitrable.” And, those delegated questions of arbitrability are hardly trivial ones. They concern such potentially dispositive questions regarding the enforceability of the arbitration agreement as whether it is valid in the face of defenses like unconscionability or mutual mistake.
Thus, the supposedly plain text reading of the delegation clause that undergirds the majority‘s holding is in my view simply mistaken, because the text refutes it. Indeed, if, as the majority concludes, the parties had intended the question of the arbitration agreement‘s scope to be itself decided through arbitration, then the delegation clause would have had to provide for a delegation along the lines of: “The Partner and New York Life agree that any dispute as to whether such Claim is arbitrable as well as any dispute as to what constitutes ‘such Claim’ shall be resolved by arbitration.” Or it could have used the more economical phrasing that the majority‘s shorthand account of the delegation clause uses. But, of course, the delegation clause was not written in a manner that uses either formulation, and so does not expressly require that a dispute over the scope of “Claim” in the arbitration agreement be resolved by an arbitrator. Instead, it expressly requires only that “any dispute as to whether such Claim is arbitrable[] shall be resolved by [] arbitration.”
The majority does suggest that the more limited construction of the delegation clause that I conclude is required renders the arbitral provisions of the Employment Agreement hopelessly circular. See Maj. Op. at 20-21. But, I do not see how that is so.
The majority does also attempt to support its construction of the delegation clause by pointing to the fact that the Employment Agreement incorporates the American Arbitration Association‘s (“AAA‘s“) National Rules for the Resolution of Employment Disputes (“NRRED“). It contends that this incorporation “constitutes clear and unmistakable evidence of the parties’ intent to delegate arbitrability issues to the arbitrator.” Maj. Op. at 17-18. That is so, according to the majority, because Rule 6(a) of the NRRED provides that “[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement.” See id. at 17.
But, the Employment Agreement is clear that the AAA will only administer the arbitration proceeding “[i]n the event that the [Financial Industry Regulatory Authority (“FINRA“)] refuses to arbitrate the Claim,” and New York Life does not assert that this antecedent condition is met in this case. See id. at 6-7. Thus, for our purposes, the Employment Agreement incorporates only the FINRA rules and not the NRRED, and nothing in the FINRA rules purports to speak to the delegation question that we are facing. See id. For that reason, the Employment Agreement‘s reference to the NRRED does not indicate that a separate and broader delegation provision that would encompass the scope question is operative for our purposes. And, of course, the fact that the NRRED contemplate that such a broader delegation provision would be operative if a condition that has not been satisfied were satisfied cannot itself expand the scope of the only delegation clause that otherwise is in place.
The majority also invokes the Employment Agreement‘s survival provision to support its construction of the delegation clause. See id. at 18. But, here, too, I do not see how this provision is of help, as that provision is just as consistent with my construction of the delegation clause as it is with the majority‘s.
The survival provision states that the arbitration agreement and delegation clause “shall survive termination of this . . . Employment Agreement by either party for any reason.” It thus ensures that the arbitration that the parties have agreed to conduct -- whether with respect to the merits of a legal claim or its arbitrability -- remains the required process for them to use even after the Employment Agreement is terminated with respect to those “dispute[s], claim[s] or controvers[ies]” that the arbitral provisions encompass. But, the survival provision does not purport to address the scope of those arbitral provisions. It simply ensures that any dispute within their scope is still subject to arbitration after the Employment Agreement has terminated.
Thus, per the survival provision, the arbitration agreement and delegation clause would bind Bossé in a lawsuit in which he
For all these reasons, then, I would construe the delegation clause to mean just what it plainly says. And, thus, I would read it to delegate only issues of arbitrability about “such Claim” and not issues concerning what “Claim” means. Accordingly, I conclude that the interpretive dispute before us -- which regards the scope of the term “Claim” in the arbitration agreement -- is an interpretive dispute that the parties have left to a court and not an arbitrator to resolve.17
II.
Turning, then, to that dispute: Is Bossé‘s claim that he was discriminated against based on his race in his role as an independent contractor for New York Life -- and thus only after he was no longer employed by the company -- a “Claim” within the meaning of the arbitration agreement? I do not think it is, even presuming a broad construction of the arbitration agreement. See Granite Rock Co. v. Int‘l Brotherhood of Teamsters, 561 U.S. 287, 302 (2010).
New York Life itself concedes that the parties to the Employment Agreement could not reasonably be thought to have contemplated that the arbitration agreement would encompass even a lawsuit between them that involved an injury that Bossé suffered as a result of being hit by a New York Life vehicle only decades after he had stopped being a “Partner” or even a New York Life employee. Such a suit would not merely be accruing late. It would not arise from their employment relationship at all.
For that reason, there is force in my view to the District Court‘s observation that we ought to be wary of reading the arbitration agreement in the Employment Agreement to be so disconnected from the employment relationship that brought it about that it may be read to encompass literally “any . . . claim” (emphasis added) -- as those terms appear in a dictionary -
Of course, if the text of the arbitration agreement were plainly all-encompassing and thus irreconcilable with the more modest intention of the parties just described, then we would face the unenviable task of squaring the two. But, fortunately, the text of the Employment Agreement is comfortably read to spare us that exercise, as it readily supports a construction of the scope of the arbitration agreement that excludes disputes that even the party arguing for the broadest construction concedes could not have been intended.
Notably, and contrary to New York Life‘s assertion, the Employment Agreement does not define “Claim” in the arbitration agreement broadly to encompass “‘any dispute, claim or controversy arising between’ Mr. Bossé and New York Life.” (emphasis shifted). It refers instead to only disputes, claims, and controversies that “aris[e] between” “[t]he Partner and New York Life.” (emphasis added). That is significant, in my view, because Bossé was not a “Partner” when the alleged misconduct by New York Life that grounds his lawsuit against that company is claimed to have first occurred. Rather, Bossé contends that he was an independent contractor -- and so not an employee of New York Life at all -- at the time of the actionable legal conduct by that company for which he seeks recompense. In other words, his suit no more “aris[es]” out of an employment relationship with New York Life than do the hypothetical traffic accident and slip-and-fall suits that New York Life itself acknowledges were beyond the contemplation of the contracting parties precisely because they plainly do not arise out of that relationship.
To be sure, Bossé is the “Partner” to whom the contract means to refer. But, given that the contract is by its terms an “Employment Agreement” between a “Partner” and his employer, and given that the claim for liability at issue here does not concern Bossé‘s status as either a “Partner” or even an employee of New York Life any more than the hypothetical cases just mentioned do, there is nothing strange in concluding that Bossé‘s claim for liability arising solely out of that alleged post-employment mistreatment by New York Life is not a “dispute, claim or controversy” that has “aris[en] between” “[t]he Partner and New York Life.” (emphases added).18
By contrast, the specific reference to “employment discrimination” claims in the arbitration agreement is much less surprising if the contracting parties understood themselves to have been agreeing to arbitrate only legal claims for recovery by one against the other arising from their employment relationship. On that understanding, it makes sense that they would have wished to make clear that legal claims for recovery pertaining to discrimination arising out of that employment relationship would still be subject to arbitration, given that, unlike many types of employment-related claims for recovery, those seeking recovery for discrimination against a protected class are often statutorily based and so might raise a question as to whether they, too, were to be arbitrated like legal claims for recovery that are premised only on the breach of the Employment Agreement itself.
Moreover, this more modest reading of “Claim” in the arbitration agreement -- which construes that word to be limited by the employment context that gave rise to the Employment Agreement -- accords with the provision in the Employment Agreement that provides that “[i]n the event that the [FINRA] refuses to arbitrate the Claim, . . . the Claim . . . shall be resolved by an arbitration proceeding administered by the [AAA] in accordance with its National Rules for the Resolution of Employment Disputes.” (emphasis added). At the time at which the parties entered into the Employment Agreement, the NRRED characterized the “[t]ypes of [d]isputes” they “[c]overed” by stating that “[t]he dispute resolution procedures . . . can be inserted into an employee personnel manual, an employment application of an individual employment agreement, or can be used for a specific dispute.” Am. Arb. Ass‘n, National Rules for the Resolution of Employment Disputes 7 (2004), https://www.adr.org/sites/default/files/National%20Rules%20for%20the%20Resolution%20of%20Employment%20Disputes%20Jan%2001%2C%202004.pdf (emphases added). And, the NRRED further provided that “[t]hese rules have been developed for employers and employees who wish to use a private alternative to resolve their disputes.” Id. at 3 (emphases added). In fact, at the time at which the parties entered into the Employment Agreement, the NRRED made no reference to independent contractors, even though subsequent versions of those rules expanded their scope to apply to independent
I do realize that New York Life puts much weight on the Employment Agreement‘s inclusion of the survival provision in pressing for its all-encompassing reading of the arbitration agreement. But, just as the survival provision -- contrary to the majority‘s contention -- does not cut against the more limited construction of the delegation clause that I embrace, it also does not cut against the more limited reading of the arbitration agreement‘s scope.
The survival provision ensures that arbitration remains the required process for adjudicating “Claim[s]” that arise even after the Employment Agreement is terminated. But, as I have explained, claims arising out of the employment relationship between Bossé and New York Life could accrue or be brought after the termination of that relationship, for instance because they might concern the termination itself, involve late-discovered evidence, or simply have been brought post termination. Thus, the inclusion of the survival provision tells us nothing about the scope of “the Claim” in the arbitration agreement, as it concerns only questions of timing regarding the class of suits that “the Claim” encompasses. Thus, the survival provision continues to perform a perfectly useful clarifying function even under the more limited reading of the arbitration agreement‘s scope that the District Court adopted.
I recognize as well that New York Life advances the contention that, even if the hypothetical slip-and-fall and car accident suits noted above might lie outside the contemplation of the parties to the Employment Agreement, the legal claim for recovery at hand -- which concerns alleged mistreatment of Bossé in his role as an independent contractor for New York Life -- is somehow different. New York Life suggests that such a claim is more tethered to the employment relationship that gave birth to the Employment Agreement, because employees often become independent contractors for the company. And, on that basis, New York Life contends that such a claim should be understood to fall within the arbitration agreement‘s scope even if those other less work-related claims should not.
But, I cannot see any way to read the arbitration agreement to permit us to engage in such sorting among what, in the end, are all non-employment-based legal claims for recovery. For the reasons I have given, I can see a textual basis for construing the arbitration agreement to exclude from its scope suits that arise from conduct by New York Life toward Bossé that only occurred after he was no longer a Partner of New York Life. I can see no similar textual basis, however, for construing the arbitration agreement such that it would cover some such suits, including this one seeking recovery for race discrimination, and not others, such as one stemming from the hypothesized late occurring slip-and-fall or traffic accident. The word “Claim” may not be self-defining, but it is simply not capable of being read to encompass the former suit but not the latter two without importing into that word some hazy standard of relatedness that is fine for parties to ask courts to apply but that is hardly one that a court should try to conjure for them post hoc. See Paterson-Leitch Co. v. Mass. Mun. Wholesale Elec. Co., 840 F.2d 985, 991-92 (1st Cir. 1988) (calling on courts “no[t] . . . to rewrite contracts freely entered into between sophisticated business entities” (quoting RCI Ne. Servs. Div. v. Bos. Edison Co., 822 F.2d 199, 205 (1st Cir. 1987))).
Thus, given how unlikely it would be that -- as New York Life readily concedes
III.
The Supreme Court has made clear that the Federal Arbitration Act reflects a policy in favor of arbitration. See, e.g., Granite Rock, 561 U.S. at 302. But, courts have rightly stayed true to the usual principles of contractual interpretation even when construing arbitration agreements. See, e.g., Smith, 318 F.3d at 777-78; Bogen Commc‘ns, Inc. v. Tri-Signal Integration, Inc., 227 F. App‘x 159, 160-62 (3d Cir. 2007). Following their sensible approach in construing the arbitral provisions at hand, I conclude that the District Court correctly interpreted the arbitration agreement in this case. Accordingly, I respectfully dissent.
Because Bossé‘s argument is limited to the interpretive import of
Notes
[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.
This Court has also discussed the effect of