Plaintiff, Susan A. Desiderio, received an offer of employment from Florida’s Suntrust Bank (Suntrust or bank) to become a securities broker. Her employment was conditioned on registration with defendant National Association of Securities Dealers, Inc. (NASD). To register with the NASD, Desiderio was asked to sign Form U-4 that contained a provision making all employment related disputes subject to arbitration. Desiderio said she would sign the form only if the mandatory arbitration provision was strickеn from it. When the NASD refused to accept an altered form, the bank’s offer of employment to plaintiff was revoked.
In her complaint, Desiderio asserts that the mandatory arbitration provision in Form U-4 violates her statutory rights under Title VII, 42 U.S.C. §§ 2000e to e-17, her constitutional rights under the Fifth Amendment Due Process Clause to an Article III judicial forum, and her right to a jury trial under the Seventh Amendment. She seeks a declaratory judgment invalidating the mandatory arbitration provision in Form U-4, and also аsks for compensatory damages through her pendent state law tort claims.
*201 BACKGROUND
Defendant NASD is a self-regulatory private corporation registered with the Securities and Exchange Commission (SEC) as a national securities association. As an integral part of a comprehensive system of federal regulation of the securities industry, the NASD regulates the over-the-counter securities market, which includes securities firms and registered representatives who buy and sеll over-the-counter-securities. Its authority is exercised under the close supervision of the SEC, which must approve all the NASD’s rules and regulations. Among the rules that have been expressly approved by the SEC is the Form U-4 registration form. That form — the subject of this litigation — incorporates a provision for compulsory arbitration of all disputes between a securities representative and her employer, when required by the rules of the self-regulatory organization with which the securities representative seeks to become registered. Under NASD rules, all employees are compelled to arbitrate any employment-related dispute. In order to work in the securities industry, the SEC requires a securities broker to be registered with at least one self-regulatory organization, see 17 C.F.R. § 240.15b7-l (1998), and registration in such organization entails signing Form U-4.
The NASD operates an arbitration forum for the purpose of resolving disputes between securities brokers and their employers. Its Code of Arbitration Procedure regulates the composition of the arbitration panel, provides for the disclosure of information by arbitrators concerning potential conflicts of interest, and also provides for the subsequent removal of an arbitrator by means of a challenge. Under the procedure an arbitration award must be in writing.
On March 18, 1996 Desiderio, as noted, was hired as a registered representаtive by Suntrust, conditioned upon her signing a Form U-4 as required by both state and federal law. She signed the Form U-4, but struck out the mandatory arbitration provision. Suntrust had no objection to Desiderio’s modification of the form. But NASD did. An employee of NASD, in a telephone conversation, allegedly advised Suntrust that an altered Form U-4 was unacceptable for registration. Plaintiff refused to execute an unaltered one. Because Desiderio could not become registerеd, Suntrust revoked its offer of employment. The altered Form U-4 was never submitted to the NASD.
Plaintiff subsequently filed a complaint instituting the present action on January 15, 1997, naming both the NASD and the SEC as defendants. In a judgment entered on April 23, 1998, the United States District Court for the Southern District of New York (Leisure, J.) granted defendants’ motions to dismiss plaintiffs complaint for failure to state a claim pursuant to Rules 12(b)(6) and 12(b)(1) of the Federal Rules of Civil Procedure. Plaintiff appeals from that judgment. Her appeal against the SEC was stipulated to be withdrawn, leaving the NASD as the only ap-pellee. We affirm.
DISCUSSION
Mootness & Ripeness
We dispose first of the threshold question of whether this case is moot. On June 22, 1998 while this case was pending, the SEC approved a proposed rule change offered by the NASD that abolishes mandatory NASD arbitration of statutory employment discrimination claims. See Self Regulatory Organizations; National Association of Securities Dealers, Inc.; Order Granting Approval to Proposed Rule Change Relating to the Arbitration of Employment Discrimination Claims, 63 Fed. Reg. 35299, 35303 (1998) (Order Granting Approval). The rule change became effective on January 1, 1999. See id. As a result, the NASD argues that many of Desiderio’s claims have become moot.
*202
As a general rule, in a case involving an allegation that defendant has engaged in illegal activity, a court’s power to hear and decide the matter is not terminated when defendant voluntarily ceases its illegal conduсt. That is, such cessation does not necessarily make a case moot.
See County of Los Angeles v. Davis,
The NASD amended its rales voluntarily.
See
Order Granting Approval, 63 Fed. Reg. 35299, 35300. In light of proof that the rale change was partially prompted by political concerns such as letters from members of Congress,
see id.
at 35300, the NASD has not met its burden of showing that there is no reasonable expectation that this rule will ever be reinstated,
see Davis,
The NASD further urges that Desiderio’s claims are not ripe because she never actually submitted her Form U-4 to the NASD. However, “[w]e will not require ... a futile gesture as a prerequisite for adjudication in federal court.”
Williams v. Lambert,
Standard of Review
We review dismissal of a cause of action under the Federal Rules of Civil Procedure 12(b)(6)
de novo. See Jaghory v. New York State Dep’t of Educ.,
*203 I Statutory Rights Under Title VII
A. Views of Other Circuits
Whether a pre-dispute agreement requiring compulsory arbitration, such as Form U-4, is enforceable with regard to Title VII claims is an issue that has divided the circuits and is one of first impression in this Court. Practically every circuit that has addressed the question has held that the arbitration clause in Form U-4 validly applies to Title VII claims.
See Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
In a notable exception to this unanimity, the Ninth Circuit has ruled that the Form U-4 compulsory arbitration clause is unenforceable with regard to Title VII claims.
See Duffield v. Robertson Stephens & Co.,
The circuit conflict stems from varying interpretations of
Gilmer v. Interstate/Johnson Lane Corp.,
B. Applicability of Gilmer and the FAA
The Civil Rights Act of 1991(Act) added a provision on arbitration to Title VII stating that “[w]here appropriate and to the еxtent authorized by law, the use of ... arbitration ] is encouraged” to resolve Title VII claims. Pub.L. No. 102-166, § 118, 105 Stat. 1071, 1081 (§ 118),
reprinted in
42 U.S.C. § 1981 app. at 509 (1994). We agree with the view of the majority of circuits that the phrase “to the extent authorized by law” is on its face a clear and unambiguous reference to “current law.”
See, e.g., Seus,
In contrast, the Ninth Circuit in
Duf-field
suggested that the phrase “to the extent authorized by law” refers not to current law as stated in
Gilmer
and the FAA, but instead refers to a previously relevant case,
Alexander v. Gardner-Denver Co.,
Because we find the text clear on its face, we do not reach these arguments based on legislative history. Where the tеxt of a statute is unambiguous, we need not look at the legislative history.
See Ex Parte Collett,
C. What Gilmer and the FAA Require
Gilmer
states the general principle that arbitration agreements are enforceable with regard to statutory claims, “unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue [as indicated] in the text of the [statute], its legislative histоry, or an inherent conflict between arbitration and the [statute’s] underlying purposes.”
Although many circuits have attempted to simplify the
Gilmer
inquiry by assuming that Title VII and ADEA share parallel objectives because they are similar civil rights statutes,
see Cole,
II Title VII’s Text, Legislative History, & Purposes
A. Text
The first step in interpreting a statute is to determine whether the language at issue has a “plain and unambiguous meaning with regard to the particular dispute in the case.”
Robinson v. Shell Oil Co.,
The relevant text in Title VII states that “[w]here appropriate and to the extent authorized by law, the use of ... arbitration[ ] is encouraged to resolve disputes arising under the Acts or provisions of Federal law amended by this Title.” Civil Rights Act of 1991, § 118. We conclude— as did the Third, Fourth, and Seventh Circuits — that the text of § 118 evinces a plain Congressional purpose of encourag
*205
ing arbitration оf Title VII claims and not one of precluding such arbitration.
See Koveleskie,
The Ninth Circuit in
Dujfield
suggested, to the contrary, that the text of § 118 is ambiguous when viewed in light of the general purpose of the Civil Rights Act of 1991, namely, to provide “additional remedies” against intentional discrimination, such as more expansive fee-shifting provisions and added rights to a jury triаl and to compensatory and punitive damages.
We are unable to adopt the view expressed in
Dujfield.
Compulsory arbitration does not defeat the right to compensatory and punitive damages, or fee shifting because an arbitrator is also empowered to grant this kind of relief. Moreover, it is untenable to contend that compulsory arbitration conflicts with the Aсt’s provision for the right to a jury trial, because
Gil-mer
ruled that compulsory arbitration clauses could be enforced in claims under the ADEA, a statute that explicitly provides for jury trials.
See Rosenberg,
B. Legislative History Not Considered
As Desideriо correctly notes, however, there is express language in the legislative history that suggests a congressional purpose to preclude mandatory arbitration of Title VII claims. For instance, two House Committee reports stated with respect to § 118 that “the Committee believes that any agreement to submit disputed issues to arbitration .. ¡ in an employment contract, does not preclude the affected person from seeking relief under the enforcement provisions of Title VII.” H.R.Rep. No. 102-40(1), at 97 (1991) (House Committee on Education and Labor) (emphasis added), reprinted in 1991 U.S.C.C.A.N. 549, 635; H.R.Rep. No. 102-40(11) at 41 (House Judiciary Committee) (same), reprinted in 1991 U.S.C.C.A.N. 694, 735. One report further explained that § 118 “encourag[ed] the use of alternative means of dispute resolution to supplement, rather than supplant, the rights and remedies provided by Title VII,” and that a Republican version of § 118 was rejected specifically because it “encourag[ed] the use of [arbitrаtion] in place of judicial resolution ... [and thus] employers could refuse to hire workers unless they signed a binding statement waiving all rights to file Title VII complaints.” H.R.Rep. No. 102-40(1) at 104, reprinted in 1991 U.S.C.C.A.N. at 642.
While the language cited from the Committee reports suggests the preservation of the right to a judicial remedy under Title VII, such language is not found in the text of the statute. Rather, the Act says that the use of arbitration is to be “encouraged.” We recognize that Congress’ aim to foster arbitration, by itself, doеs not thereby require us to preserve an agreement waiving rights to a judicial forum. But, we assume, as does the Supreme Court, that the drafters of Title VII and the amendments introduced in the Act were well aware of what language was required for Congress to evince an intent to preclude a waiver of judicial remedies. In construing Title VII, the absence of that language is a meaningful omission. Moreover, the substantive rights found in the statute are not in any way diminished by our holding that arbitration may be compelled in this case, since only the forum — an arbitral rather than a judicial
*206
one — is affected, and plaintiffs rights may be as fully vindicated in the former as in the latter. As a result, and primarily because we find the language of the statute to be clear, we need not consider the inconsistent legislative history.
See Ex Parte Collett,
Because the text of Title VII does not square with its legislative history, appellant’s argument comes down to nothing more than the poet’s lament: Thе saddest words of tongue and pen are “it might have been, More sad are these we daily see; It is, but it hadn’t ought to be.” F. Brete Harte, Mrs. Judge Jenkins, in Political Works, 265, 267 (1872). In sum, we hold that Desiderio has not met her burden of showing that with respect to claims under Title VII, Congress intended to preclude the waiver of judicial remedies. Accordingly, the arbitration provision in Form U-4 may be applied to Desiderio’s Title VII claims.
Ill Constitutional Claims
Plaintiff insists that the mandatory arbitration clause in Form U-4 unconstitutionally requires her to forfeit her Fifth Amendmеnt right to due process, her Seventh Amendment right to a jury trial, and her right to an Article III judicial forum to assert her right to employment as a broker-dealer in the securities industry. We agree with the district court that these constitutional arguments all fail because the requisite state action is absent.
A. NASD is a Private Entity
A threshold requirement of plaintiffs constitutional claims is a demonstration that in denying plaintiffs constitutional rights, the defendant’s conduct constituted state action.
See United States v. International Bhd. of Teamsters,
B. Nexus Required for State Action by Private Entities
At the same time we recognize that private entities may be held to constitutional standards if their actions are “fairly attributable” to the state.
Lugar v. Edmondson Oil Co.,
First, ... [t]he complaining party must ... show that there is a sufficiently close nexus between the State and the challеnged action.... [Constitutional standards are invoked only when it can be said that the State is responsible for the specific conduct of which the plaintiff complains....
Second, ... a State normally can be held responsible for a private decision only when it has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the State. Mere approval ... is not sufficient to justify holding the State responsible for those initiatives....
Blum v. Yaretsky,
*207
Notably,
Blum
requires a nexus between the state and the
specific
conduct of which plaintiff complains. Here the nub of Desiderio’s complaint is her challenge to the arbitration clause contained in the Form U-4. But no SEC rule or action that has been called to our attention encourages the NASD to compel arbitration.
See Merrill Lynch, Pierce, Fenner & Smith v. Ware,
Concededly, after Form U-4 was drafted, it was subject to approval by the SEC, from which fact plaintiff infers that state action is present. Simply because the SEC approved the arbitration clause in Form U-4 is not enough. As
Blum
emphasizes, a state is responsible for a private decision only where it exercised coercive power or provided significant encouragement.
Consequently, we find no state action in the application or enforcement of the arbitration clause of Form U-4. This conclusion is consistent with our holding in
Albert v. Carovano,
IV Contract of Adhesion
Again, appellant insists that Form U-4 is unenforceable, because it is an unconscionable contract of adhesion. A contract or clause is unconscionable when there is an “absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.” 8 Samuel Williston,
A Treatise on the Law of Contracts,
§ 18:9, at 54 (Richard A. Lord ed., 4th ed.1998);
see Seus,
Form U-4 binds
both
parties to mandatory arbitration and may not be said to favor the stronger party unreasonably. Hence, it is not a contract of adhesion. As the Supreme Court emphasized in
Gilmer,
“[m]еre inequality in bargaining power” between employers and employees is not alone sufficient to hold arbitration agreements unenforceable.
V Private Right of Action for Pendant State Claims
Finally, Desiderio brings state law tort claims against the NASD for its alleged “arbitrary and capricious administration in having an unpublished method” for avoiding mandatory arbitration. Specifically, plaintiff warrants that an unnamed employee of NASD chose to remain “per
*208
versely ... silent” about the fact that the NASD rules do not actually prohibit an agreement between the employer and employee, which provides at the request of the employee that employment disputes will be litigated in court. Nonetheless, we have previously held there is no private right of action available under the Securities Exchange Act to redress denials of membership in an exchange, or to challenge an exchange’s failure to follow its own rules.
See Feins v. American Stock Exch., Inc.,
Plaintiff acknowledges that generally no private right of action exists, but maintains that the rule has a bad faith exception. Whether plaintiff properly raised this bad faith argument to the district court is subject to some doubt, but in any event we exercise our discretion to entertain it.
See Greene v. United States,
In
Brawer,
we held that “a private cause of action against an exchange or a clearinghouse for failure to comply with one of its rules which requires an exercise of discretion,
if one exists at all,
may be brought only if it is premised upon allegations of fraud or bad faith.”
CONCLUSION
For the reasons stated, we affirm the judgment appealed from without costs to either party.