Gilmer v. Interstate/Johnson Lane Corp.

Background

Robert Gilmer was hired by a securities firm and, as a condition of employment, registered with the New York Stock Exchange using a standard registration form that included a promise to arbitrate disputes required by exchange rules. After the firm fired him in 1987 when he was 62, Gilmer filed an age-discrimination charge with the EEOC and then sued under the Age Discrimination in Employment Act (ADEA). The district court refused to force arbitration, but the Fourth Circuit reversed and the Supreme Court agreed to decide the issue.

Reasoning

The Court asked whether federal age-discrimination claims can be sent to arbitration under the Federal Arbitration Act (FAA) when the employee agreed to arbitrate in a registration form. Relying on a strong federal policy favoring arbitration and on prior decisions holding other statutory claims arbitrable, the Court required Gilmer to show that Congress intended to bar arbitration. The majority found no clear text, history, or inherent conflict in the ADEA that would prevent arbitration. The Court also concluded that the NYSE arbitration rules and FAA protections give claimants a fair opportunity to vindicate their statutory rights.

Real world impact

The decision allows employers who rely on securities registration clauses to compel arbitration of ADEA suits instead of litigation in court. Employees remain free to file EEOC charges, and the agency can still pursue class or equitable relief. Arbitration may limit discovery and judicial review compared with court suits, but the Court found available protections and remedies adequate in this context.

Dissents or concurrances

Justice Stevens, joined by Justice Marshall, dissented, arguing that the FAA excludes employment contracts and that forcing arbitration would undermine the ADEA’s goal of broad judicial remedies.