Sharon E. COOK et al., Plaintiffs and Respondents, v. BARRATT AMERICAN, INC., etc., et al., Defendants and Appellants.
Barratt American, Inc., Michael Pattinson and Brian Angelini, (collectively Barratt) defendants in the action of Sharon E. Cook and Steven D. Cook (collectively Cook) for damages based on the state statutory prohibition against sex discrimination in the Fair Employment and Housing Act (FEHA; Gov.Code, § 12900 et seq.), appeal an order denying Barratt's motion to compel arbitration and stay proceedings.
Barratt contends the Federal Arbitration Act (FAA; 9 U.S.C.A. § 1 et seq.) requires that the arbitration clause in the private employment agreement between Cook and Barratt be given effect. Finding merit in Barratt's contention, we reverse.
The allegations underlying the action for damages are as follows: In April 1986 Barratt hired the then unmarried plaintiff, Sharon White, as a new home sales representative. (CT 74)! In August 1986, Sharon signed a sales representative employment agreement with Barratt for a one-year term. The employment agreement contains an agreement to submit to arbitration “[a]ny controversy between Broker [Barratt] and Salesperson [Cook] involving ․ the employment of Salesperson,” with the decision of the arbitrators to be “final and conclusive.” 1
In January 1987 Sharon discovered she was pregnant and continued to work for Barratt. In February 1987 Barratt's representative told Sharon's husband Barratt could not have pregnant women on the work site and Sharon would be going into resales in June. The representative threatened to fire Sharon if she did not transfer to resales and harassed her for objecting to the transfer. She was not allowed to work on Sundays and was ordered not to attend sales meetings held on Mondays. Barratt hired a third salesperson to work on the job site when its practice had been to have only two persons work at one site.
In March 1987 Sharon filed a charge of discrimination based on sex with the Equal Employment Opportunity Commission (EEOC) and the Department of Fair Employment and Housing. Barratt responded to the charge and participated in the EEOC investigation without asserting its intent to arbitrate the claim.
In July 1987 Sharon and Barratt signed another employment agreement for a six-month term running through December 1987. The employment agreement contained an arbitration agreement identical to the original August 1986 agreement.
In December 1987 Steven Cook resigned his position followed shortly by Sharon. In March 1988 the EEOC gave Sharon a notice of right to sue.
Cook filed the present lawsuit in May 1988. The complaint alleges causes of action for constructive discharge, intentional infliction of emotional distress and violation of Government Code section 12940 et seq., part of the FEHA.2
Barratt answered and engaged in discovery without disclosing its intent to seek arbitration until August 1988. In September 1988 Barratt filed the motion to compel arbitration here under consideration.
On the date of the hearing on the motion to compel arbitration counsel informed the trial court that six days before the hearing the United States Court of Appeals for the Eighth Circuit had reversed a United States District Court decision compelling arbitration in a similar case. The trial court continued the hearing on the motion to compel arbitration, and after further briefing and argument, followed the Eighth Circuit's decision in Swenson v. Management Recruiters Intern., Inc. (8th Cir.1988) 858 F.2d 1304, denying the motion.
Swenson held that “․ Congress has articulated an intent through the text and legislative history of Title VII to preclude waiver of judicial remedies for violation of both federal Title VII rights and parallel state statutory rights, thereby exempting state statutes from the provisions of the Federal Arbitration Act.” (858 F.2d at p. 1309.) Accordingly, the employer in Swenson was denied arbitration of state-grounded sex and race discrimination claims in connection with Swenson's employment which was subject to a private, not collectively-bargained agreement to arbitrate controversies.
In its ruling the trial court also found Barratt did not waive its right to seek to compel arbitration of the matter.
The determinative issue in this appeal is whether federal law precludes or requires arbitration, pursuant to the arbitration clause in the private contract here involved, of the state-law-founded claim of employment discrimination based on sex.3 We are persuaded by recent United States Supreme Court decisions concerning the controlling effect to be given to arbitration clauses under the FAA that the privately negotiated arbitration agreement here under consideration is required to be enforced by an order compelling arbitration in the first instance. We are not persuaded by contrary conclusions reached in cases such as Swenson v. Management Recruiters Intern., Inc., supra, 858 F.2d 1304, relied on by the trial court; Nicholson v. CPC Intern. Inc. (3rd Cir.1989) 877 F.2d 221; or Utley v. Goldman Sachs & Co. (1st Cir.1989) 883 F.2d 184.
The FAA, and particularly Title 9, section 2,4 creates a body of federal substantive law of arbitrability applicable to any arbitration agreement within the coverage of the FAA. (Moses H. Cone Memorial Hosp. v. Mercury Const. (1983) 460 U.S. 1, 24, 103 S.Ct. 927, 941, 74 L.Ed.2d 765, enforcing arbitration of a hospital construction contract dispute.) “ ‘․ Congress declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration.’ ” (Perry v. Thomas, supra, 107 S.Ct. at p. 2525, quoting Southland Corp. v. Keating (1984) 465 U.S. 1, 10, 104 S.Ct. 852, 858, 79 L.Ed.2d 1.) It is the “clear federal policy [to require] arbitration unless the agreement to arbitrate is not part of a contract evidencing interstate commerce or is revocable ‘upon such grounds as exist at law or in equity for the revocation of any contract.’ 9 U.S.C. § 2.” (Ibid., holding section 2 of the FAA preempts California Labor Code section 229 which provides in part that actions for the collection of wages may be maintained “without regard to the existence of any private agreement to arbitrate.”) 5 The federal policy is “to ensure the enforceability, according to their terms, of private agreements to arbitrate.” (Volt Info. Sciences v. Bd. of Trustees (1989) U.S. , 109 S.Ct. 1248, 1254, 103 L.Ed.2d 488.) 6 There is no federal policy, however, favoring arbitration under a certain set of procedural rules. (Ibid.) Thus, it is clear that the FAA is applicable to California's courts in cases of contracts evidencing a transaction involving interstate commerce. (Main v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1977) 67 Cal.App.3d 19, 25, 136 Cal.Rptr. 378.)
In May 1989 the United States Supreme Court observed “ ‘the old judicial hostility to arbitration’ ” has eroded over the years and the erosion has intensified in its most recent decisions. (Rodriguez De Quijas v. Shearson/American Exp., Inc. (1989) 490 U.S. 477, 109 S.Ct. 1917, 1920, 104 L.Ed.2d 526.) De Quijas cites several examples of the shift in the Court's views on arbitration, one of which is the “flat statement” in Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth (1985) 473 U.S. 614, 628, 105 S.Ct. 3346, 3354, 87 L.Ed.2d 444, that “[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum.” (De Quijas, supra, 109 S.Ct. at p. 1920.) De Quijas goes on to hold rights under the federal Securities Act of 1933, previously held to be nonarbitrable under section 14 of that Act, are arbitrable. De Quijas overrules a holding to the contrary in Wilko v. Swan (1953) 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168.
We observe that in Mitsubishi, supra, 473 U.S. 614, 626–627, 105 S.Ct. 3346, 3353–3354, our highest court also states “we are well past the time when judicial suspicion of the desirability of arbitration and of the competence of arbitral tribunals inhibited the development of arbitration as an alternative means of dispute resolution.” Mitsubishi rejected arguments arbitration was inadequate based on the complexity of the claim, inadequate procedures and fear that arbitrators will not follow the statute and will fail to protect substantive rights. (See Swenson, supra, 858 F.2d 1304, 1307.) Mitsubishi held federal anti-trust claims and remedies were arbitrable. Particularly significant to the present case is the statement in Mitsubishi:
“We must assume that if Congress intended the substantive protection afforded by a given statute to include protection against waiver of the right to a judicial forum, that intention will be deducible from text or legislative history.” (Mitsubishi, supra, 473 U.S. at p. 628, 105 S.Ct. at p. 3354.)
In Shearson/American Exp., Inc. v. McMahon (1987) 482 U.S. 220, 227, 107 S.Ct. 2332, 2338, 96 L.Ed.2d 185, the same rule is expressed as follows:
“If Congress did intend to limit or prohibit waiver of a judicial forum for a particular claim, such an intent ‘will be deducible from [the statute's] text or legislative history,’ [citing Mitsubishi, supra ], or from an inherent conflict between arbitration and the statute's underlying purposes. [Citations.]”
Shearson/American Express Inc. v. McMahon, requiring arbitration of claims under the Securities Exchange Act of 1934 (15 U.S.C.A. § 78j(b)) and the Racketeer Influenced and Corrupt Organizations Act (RICO; 18 U.S.C.A. § 1961 et seq.), also reiterates the rule that the “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. [Citation.]” (482 U.S. at p. 227, 105 S.Ct. at p. 2338.) Moreover, “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver․” (Moses H. Cone Memorial Hosp. v. Mercury Const., supra, 460 U.S. 1, 24–25, 103 S.Ct. 927, 941–942.)
Considering the strong federal policy to enforce arbitration agreements and the intensified erosion of judicial suspicion about the competence of arbitrators to provide for the parties' substantive rights in accord with the applicable law, and considering the absence of any indication in statutory text or history of a Congressional indication of intent to preclude a waiver of judicial remedies at least in the first adjudicatory forum of arbitration, we have concluded Cook has not carried her burden of showing the matter is not arbitrable. The foregoing authorities lead to the result that arbitration of this case is compelled under the FAA.
While the trial court had before it an applicable decision in the Swenson case, supra, 858 F.2d 1304, we do not believe that case should be viewed as persuasive precedent. To reach its conclusion the court in Swenson relied primarily on the 1974 United States Supreme Court decision in Alexander v. Gardner–Denver Company 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147. Alexander involved a race discrimination claim asserted under Title VII of the Civil Rights Act of 1964. (42 U.S.C.A. § 2000e et seq.) Alexander's employment was subject to a collective-bargaining agreement containing a broad arbitration clause including a multi-step grievance procedure with the first four steps involving negotiations between the employer and the union and the last step being compulsory arbitration. (415 U.S. at pp. 39–41, 94 S.Ct. at pp. 1015–1016.) Alexander went through the compulsory arbitration process as well as an EEOC determination with each body concluding he was not entitled to relief. The EEOC notified Alexander of his right to institute a civil suit in the federal court and he did so. (Id. at p. 43, 94 S.Ct. at p. 1017.) The United States District Court granted the employer's motion for summary judgment and dismissed, holding the racial discrimination claim had been resolved adversely in the arbitration proceeding and Alexander, having voluntarily elected to pursue his grievance to final arbitration under the nondiscrimination clause of the collective-bargaining agreement, was bound by the arbitral decision and thereby precluded from suing his employer under Title VII. (Ibid.)
The United States Supreme Court reversed, holding “an individual does not forfeit his private cause of action if he first pursues his grievance to final arbitration under the nondiscrimination clause of a collective-bargaining agreement.” (Alexander, supra, 415 U.S. at p. 49, 94 S.Ct. at p. 1020.) Alexander proceeded to discuss and dispose of contentions concerning such matters as election of remedies, waiver, the authority of arbitrators and the rectitude of a rule permitting the employee both an arbitral forum and a judicial forum for vindication of rights under Title VII while affording the employer only the single, binding arbitral forum. (Id. at pp. 49–55, 94 S.Ct. at pp. 1020–1023.) After discussing certain other matters, Alexander concluded:
“[T]he federal policy favoring arbitration of labor disputes and the federal policy against discriminatory employment practices can best be accommodated by permitting an employee to pursue fully both his remedy under the grievance-arbitration clause of a collective-bargaining agreement and his cause of action under Title VII. The federal court should consider the employee's claim de novo.” (Id. at pp. 59–60, 94 S.Ct. at pp. 1025–1026.)
Swenson focused on Alexander's statements concerning the nonwaivability of Title VII rights 7 and pointed out that although Alexander noted federal law favors arbitration, it recognized that the Title VII scheme indicates that Congress intended federal courts to be ultimately responsible for enforcing Title VII, and deferral to arbitral decisions would conflict with that goal. (Swenson, supra, 858 F.2d at p. 1305.) Swenson further stated that Alexander observed “ ‘the choice of forums inevitably affects the scope of the substantive right to be vindicated.’ ” (Ibid., quoting Alexander, supra, 415 U.S. at p. 56, 94 S.Ct. at p. 1023.) Based on this reading of Alexander, the court in Swenson concluded:
“Although Alexander involves a collective-bargaining agreement, and not a commercial arbitration agreement under the FAA, this fact should not change the Court's analysis. The Alexander Court was well aware that federal policy favors arbitration. That decision turned noton the fact that a collective bargaining arbitration was involved, but instead on the unique nature of Title VII. Alexander noted that ‘Congress indicated that it considered the policy against discrimination to be of the “highest priority.” ’ ” (Swenson, supra, 858 F.2d at p. 1306, italics added.)
Swenson continued, citing Barrentine v. Arkansas–Best Freight System, Inc. (1981) 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 641, which adhered to the Alexander decision and held federal courts are not bound by arbitral decisions concerning wage claims under the Fair Labor Standards Act where the claim is submitted to arbitration under a clause in a collective-bargaining agreement. (Swenson, supra, 858 F.2d at p. 1306.) Swenson emphasized the statement in Barrentine that “ ‘different considerations apply where the employee's claim is based on rights arising out of a statute designed to provide minimum substantive guarantees to individual workers.’ ” (Ibid., quoting Barrentine, supra, 450 U.S. at p. 737, 101 S.Ct. at p. 1443.)
Swenson further cited statements in Alexander concerning the intent of Congress not to preempt federal judicial proceedings in discrimination cases by employment arbitration agreements enforceable under the FAA, its intent to prohibit waiver of judicial forums and the inadequacy of arbitration “as a forum for the final resolution of rights created by Title VII.” (858 F.2d at p. 1306.) Swenson recognized the Supreme Court's more recent statements dismissing suspicions about the competence of arbitral tribunals, and concluded:
“[I]n the passage of Title VII it was the congressional intent that arbitration is unable to pay sufficient attention to the transcendent public interest in the enforcement of Title VII. Title VII mandates the promotion of the public interest by assisting victims of discrimination. The arbitration process may hinder efforts to carry out this mandate.” (858 F.2d at p. 1307.)
Swenson's analysis proceeds to consider the application of Minnesota state antidiscrimination law and, among other things, noted that Kremer v. Chemical Const. (1982) 456 U.S. 461, 102 S.Ct. 1883, 72 L.Ed.2d 262 had held that in Title VII cases, federal courts are required to give res judicata effect to state court decisions in state law discrimination cases. (Swenson, supra, 858 F.2d at p. 1308.) Kremer focused on the important role of state law in enforcing the Title VII scheme, as evidenced in the legislative history. That legislative history “evinces a congressional intent to allow individuals to pursue independently one's rights under other applicable state and federal statutes. Provisions in the text as well as in the legislative history demonstrate an explicit, mixed federal-state scheme of Title VII and a prominent state law role. [¶] Alexander makes clear that Congress intended the right in employment discrimination cases to have access to judicial remedies to outbalance the federal policy favoring arbitration․ Congress intended the federal antidiscrimination system to defer to state systems where possible.” (Swenson, supra, 858 F.2d at pp. 1308–1309, fn. omitted.)
Swenson cited certain Minnesota state statutes permitting investigation of discrimination charges and representation of victims in administrative and judicial proceedings. Again citing Alexander, Swenson said:
“By giving individuals access to the state courts, the private litigant ‘not only redresses his own injury but also vindicates the important congressional policy against discriminatory employment practices.’ [Citation.] As the Court stated, ‘the resolution of statutory or constitutional issues is a primary responsibility of courts, and judicial construction has proved especially necessary with respect to Title VII, whose broad language frequently can be given meaning only by reference to public law concepts.’ [Citation.]
“We conclude that Congress has articulated an intent through the text and legislative history of Title VII to preclude waiver of judicial remedies for violation of both federal Title VII rights and parallel state statutory rights, thereby exempting state statutes from the provisions of the Federal Arbitration Act․” (858 F.2d at p. 1309.)
In Utley v. Goldman Sachs & Co., supra, 883 F.2d 184, the court followed Swenson and upheld a district court order denying a motion to stay all proceedings pending arbitration of a Title VII claim under an arbitration clause in a private agreement known as a “Form U–4” agreement. A holding similar to Swenson 's also was reached in Nicholson v. CPC Intern. Inc., supra, 877 F.2d 221, concluding federal statutory rights under the Age Discrimination in Employment Act of 1967 (29 U.S.C.A. § 621 et seq.) were not subject to compulsory arbitration under a private arbitration agreement. (Cf. Gilmer v. Interstate/Johnson Lane Corp. (4th Cir.1990) 895 F.2d 195.)
While we have considered these authorities carefully, we respectfully disagree with the conclusions they reach because we do not read the holdings of either Alexander or Barrentine, both of which involved an underlying arbitration in the first instance, as leading to the conclusion arbitration cannot be compelled as the first adjudication under the parties' private arbitration clause subject to the FAA.
The United States Supreme Court itself has said that Alexander “held that an arbitrator's decision pursuant to provisions in a collective-bargaining contract was not binding on an individual seeking to pursue his Title VII remedies in court.” (International U. of Elec. Wkrs. v. Robbins & Myers (1976) 429 U.S. 229, 236, 97 S.Ct. 441, 447, 50 L.Ed.2d 427, italics added.) The same characterization applies to the holding in Barrentine. (See also McDonald v. City of West Branch, Mich. (1984) 466 U.S. 284, 104 S.Ct. 1799, 80 L.Ed.2d 302, holding the doctrines of res judicata and collateral estoppel are inapplicable to arbitration of a civil rights claim brought under 42 U.S.C.A. § 1983 where the arbitration was pursuant to a collective-bargaining agreement.)
In Kremer, supra, 456 U.S. 461, 477, 102 S.Ct. 1883, 1895, the court states in part:
“The holding in [Alexander v.] Gardner–Denver was that a private arbitration decision concerning an employment discrimination claim did not bind the federal courts. Arbitration decisions, of course, are not subject to the mandate of § 1738. Furthermore, unlike arbitration hearings under collective-bargaining agreements, state fair employment practice laws are explicitly made part of the Title VII enforcement scheme.” (Italics added.) 8
The key features of the high court's characterization of Alexander's holding, as underscored, are the references to collective-bargaining and the nonbinding effect of the arbitration determination of a Title VII claim. We view these references as authoritative limitations on the way Alexander should be read. Doing so, Alexander has no application to private agreements to arbitrate.
Alexander's holding the litigant is entitled to file his discrimination charge anew after an unsatisfactory result in arbitration is not a holding the litigant is barred from arbitration in the first place. Those are two distinct subjects, the first encompassing concepts far different from the concepts of contractual rights and expectations of the parties involved in the matter of enforcing a private agreement to arbitrate. (See Volt, supra, 109 S.Ct. at pp. 1255–1256, “By permitting the courts to ‘rigorously enforce’ such agreements according to their terms, see [Dean Witter Reynolds v.] Byrd, 470 U.S. , at 221, 105 S.Ct. , at 1242 [84 L.Ed.2d 158 (1985) ], we give effect to the contractual rights and expectations of the parties, without doing violence to the policies behind by [sic ] the FAA.”) In this case the parties were free to bargain for arbitration and they did so. Their private bargain should be fulfilled.
Here there is no cause for concern that deficiencies in the arbitrators' expertise will adversely impact on the important rights involved in the case. As Mitsubishi teaches, the parties arbitrating the statutory claim under a private arbitration agreement do “not forgo the substantive rights afforded by the statute,” (473 U.S. at p. 628, 105 S.Ct. at p. 3354) and the time has long since passed that we are to consider the arbitral forum deficient. (Id. at pp. 626–627, 105 S.Ct. at pp. 3353–3354.) In light of this post-Alexander guidance from the United States Supreme Court, it is appropriate to read Alexander 's broadly worded statements that “there can be no prospective waiver of an employee's rights under Title VII,” (415 U.S. at p. 51, 94 S.Ct. at p. 1021) and to the effect that arbitral decisions are less worthy than judicial decisions (id. at pp. 51–54, 56–59, 94 S.Ct. at pp. 1021–1023, 1023–1025) as being confined in their application to the collective-bargaining process.
Taking this reading of Alexander, we do not agree with Swenson 's announcement that Alexander “turned not on the fact that a collective bargaining arbitration was involved, but instead on the unique nature of Title VII.” (Swenson, supra, 858 F.2d at p. 1306.) We think Alexander turned on both the aspects of collective-bargaining and the unique nature of Title VII rights involved in the case. (See International U. of Elec. Wkrs. v. Robbins & Myers, supra, 429 U.S. 229, 236, 97 S.Ct. 441, 447.)
In summary, under recent pronouncements of the United States Supreme Court concerning the strong federal policy requiring arbitration of agreements to arbitrate that involve interstate commerce and the deference that is due an arbitral decision, we conclude federal law requires arbitration of this state-law-grounded claim of employment discrimination based on sex under the privately negotiated arbitration agreement here in question.9
A recent California decision lends support to this conclusion. In Baker v. California State Labor Commissioner (1989) 216 Cal.App.3d 1259, 265 Cal.Rptr. 381, the court held that under the FAA a state-grounded claim for overtime pay was subject to compulsory arbitration under a private agreement to arbitrate within interstate commerce. Baker reviews federal law concerning arbitrability and states:
“Baker states that her right to overtime pay is not based on any contractual right but has been conferred upon her by the Legislature. (See Lab.Code, § 510; Aubry v. Goldhor (1988) 201 Cal.App.3d 399, 404, 247 Cal.Rptr. 205.) Therefore, she argues, her overtime pay claim is independent of any employment-related claim and may not be waived by an agreement to arbitrate. We disagree. Construction of the valid arbitration agreement presented here is governed by section 2 of the Federal Arbitration Act which favors strongly the enforcement of such agreements. The Federal Arbitration Act preempts our state law in this area.” (216 Cal.App.3d at pp. 1266–1267, 265 Cal.Rptr. 381.)
Baker then describes the Barrentine case, supra, 450 U.S. 728, 101 S.Ct. 1437, distinguishes it, and concludes as follows:
“Barrentine is readily distinguishable from the instant case. In the first instance, Barrentine did not involve the preemption of a state statute by a conflicting federal statute. The conflict in Barrentine concerned the competing interests under two federal statutes.
“Moreover, the court's rationale for determining the non-arbitrability of FLSA claims is not present in the case here. As collective bargaining does not come into play in the instant case, there is no concern about a union's less than vigorous pursuit of Baker's claim in the arbitration process. She would have complete control over the presentation and advocacy of her overtime claim in arbitration. Second, any potential complexity in an overtime pay claim, standing alone, does not suffice to counter the strong policies behind the Federal Arbitration Act favoring arbitration of this dispute. (See Mitsubishi Motors v. Soler Chrysler–Plymouth (1985) 473 U.S. 614, 633 [105 S.Ct. 3346, 3357, 87 L.Ed.2d 444].) Finally, unlike the FLSA claim at issue in Barrentine, under the broad language of rule 347, as read into the U–4 form here, an arbitrator is empowered to grant Baker the relief requested, if warranted.
“Resolution of Baker's overtime pay claim by arbitration does not deprive her of her substantive rights. It only changes the forum in which they will be resolved. (See Mitsubishi Motors v. Soler Chrysler–Plymouth, supra, 473 U.S. at p. 628 [105 S.Ct. at p. 3354].)” (216 Cal.App.3d at pp. 1267–1268, 265 Cal.Rptr. 381, italics added.)
What Baker says about Barrentine applies with equal force to Alexander. Neither case by our highest court bars an order compelling arbitration as required by the FAA in this case.
Touching briefly on one final point, in her respondent's briefs Cook asserts Barratt waived any right it had to arbitrate this dispute. The trial court expressly found there was no waiver. As a reviewing court looking at the record in support of the trial court's factual determinations if supported by substantial evidence, we must uphold the trial court's determination as having such evidentiary support.
Pursuant to Barratt's motion, the trial court must stay the proceedings in the superior court and order the parties to arbitrate the matter.
Order reversed and remanded for proceedings consistent with the views expressed in this opinion.
1. The arbitration provision in the employment agreement reads as follows: “16.1 Any controversy between Broker and Salesperson involving the construction or application of any of the terms, provisions, or conditions of this Agreement, or the employment of Salesperson, shall, on the written request of either party be submitted to arbitration and such arbitration shall comply with and be governed by the provisions of the California Arbitration Act, beginning at Section 1280 et seq. of the California Code of Civil Procedure. The Broker and Salesperson shall each appoint one person to hear and determine the dispute and, if they are unable to agree, then the two persons so chosen shall select a third impartial arbitrator whose decision shall be final and conclusive upon both parties. The cost of arbitration shall be borne by the losing party or in such proportion as the arbitrators shall decide.”
2. Government Code section 12940 provides, in part: “It shall be an unlawful employment practice, unless based upon a bona fide occupational qualification ․:“(a) For an employer, because of the ․ sex of any person ․ to discriminate against such person in compensation or in terms, conditions or privileges of employment.”A similar, more detailed provision relating expressly to the condition of pregnancy, among other conditions, is contained in Government Code section 12945.In California Federal S. & L. Assn. v. Guerra (1987) 479 U.S. 272, 292, 107 S.Ct. 683, 695, 93 L.Ed.2d 613, the United States Supreme Court held Government Code section 12945, subdivision (b)(2), providing for maternity leave, is not preempted by Title VII of the Civil Rights Act of 1964, as amended by the federal Pregnancy Discrimination Act. (42 U.S.C.A. § 2000e, et seq. and §§ 2000e(k), 2000e–2(a) and (c).)
3. In connection with this issue we consider only the matter of the arbitrability of the claim. Not within the scope of this discussion are other matters related to the subject of arbitration such as the procedure connected with, or binding effect of, arbitration.
4. Section 2 provides, in relevant part: “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, or the refusal to perform the whole or any part thereof, ․ shall be valid, irrevocable and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. (9 U.S.C.A. § 2.)Section 4 mandates judicial enforcement of arbitration agreements where a party has failed, neglected, or refused to arbitrate. (9 U.S.C.A. § 4; see Perry v. Thomas (1987) 482 U.S. 483, 107 S.Ct. 2520, 2523, fn. 1, 96 L.Ed.2d 426.)
5. Until Cook filed a petition for rehearing in this case, there was no question raised that the employment contract involves interstate commerce and is not subject to revocation. In the petition for rehearing, for the first time in this case, Cook raises an issue about involvement in interstate commerce. (See McLain v. Real Estate Bd. of New Orleans (1979) 444 U.S. 232, 100 S.Ct. 502, 62 L.Ed.2d 441; cf. Bernhardt v. Polygraphic Company of America (1956) 350 U.S. 198, 76 S.Ct. 273, 100 L.Ed. 199.) By Cook's silence on this point until the filing of the petition for rehearing, the question has been waived. (See Parker v. City of Fountain Valley (1981) 127 Cal.App.3d 99, 117, 179 Cal.Rptr. 351; In re Joseph E. (1981) 124 Cal.App.3d 653, 657, 177 Cal.Rptr. 546.).
6. Volt Info. Sciences v. Bd. of Trustees held that the FAA does not have a preemptive effect on the application of California Code of Civil Procedure section 1281.2, subdivision (c), permitting a court to stay arbitration pending resolution of related litigation, notwithstanding that no such stay was permissible under the FAA, where the parties agreed that their arbitration agreement would be governed by California law.
7. “ ‘[W]e think it clear that there can be no prospective waiver of an employee's rights under Title VII․ Title VII's strictures are absolute and represent a congressional command that each employee be free from discriminatory practices. Of necessity, the rights conferred can form no part of the collective-bargaining process since waiver of these rights would defeat the paramount congressional purpose behind Title VII. In these circumstances, an employee's rights under Title VII are not susceptible of prospective waiver.’ ” (Swenson, supra, 858 F.2d at p. 1305, quoting Alexander, supra, 415 U.S. at pp. 51–52, 94 S.Ct. at pp. 1021–1022.)
8. McDonald v. City of West Branch, Mich., supra, 466 U.S. 284, 287–288, 104 S.Ct. 1799, 1801–1802, explains the conclusion in Kremer that arbitration decisions are not subject to the mandate of 28 U.S.C. § 1738, the Federal Full Faith and Credit Statute, as follows: “This conclusion follows from the plain language of § 1738 which provides in pertinent part that the ‘judicial proceedings [of any court of any State] shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State ․ from which they are taken.’ (Emphasis added.) Arbitration is not a ‘judicial proceeding’ and, therefore, § 1738 does not apply to arbitration awards.” (Fns. omitted.)
9. There is no question that the clause we consider meets the threshold inquiry of whether the parties agreed to arbitrate. (See Mitsubishi, supra, 473 U.S. at p. 626, 105 S.Ct. at p. 3353.)
TODD, Acting Presiding Justice.
FROEHLICH and NARES, JJ., concur.