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HOWARD v. ANDERSON

February 17, 1999

NELLIE HOWARD, PLAINTIFF,
v.
KATHY ANDERSON, KPMG PEAT MARWICK, AND KPMG PEAT MARWICK LLP, DEFENDANTS.



The opinion of the court was delivered by: Kram, District Judge.

MEMORANDUM OPINION AND ORDER

In this case asserting employment discrimination on the basis of gender and race, plaintiff Nellie Howard ("Howard") moves the Court to compel defendants to pay all but $150 of the fees associated with the arbitration of her claims. For the reasons set forth below, Howard's motion is denied.

BACKGROUND*fn1

Howard alleges that on September 20, 1993, she commenced employment with defendants KPMG Peat Marwick and KPMG Peat Marwick LLP (collectively "Peat Marwick") in New York. On or about November 4, 1993, Howard received a Senior Manager's Agreement dated September 20, 1993 (the "Agreement"), which described the terms of her employment. The Agreement contained, inter alia, an arbitration provision. The arbitration clause provides:

  Any claim or controversy between the parties
  arising out of or relating to this Agreement or
  the breach thereof, or in any way related to the
  terms and conditions of the employment of Senior
  Manager by Peat Marwick, shall be settled by
  arbitration under the rules of the American
  Arbitration Association and the laws of the State
  of New York.

On or about October 25, 1994, Howard's employment with Peat Marwick was terminated. On or about February 7, 1996, Howard filed this lawsuit alleging, inter alia, violations of state and federal laws against race and gender discrimination, including 42 U.S.C. § 2000e et seq. ("Title VII"). On April 23, 1996, defendants brought a motion to stay judicial proceedings pending arbitration. On October 16, 1996, the Court granted defendants' motion, pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 3.

On or about January 9, 1998, Howard filed a Notice of Intention to Arbitrate Employment Disputes with the American Arbitration Association ("AAA"), accompanied by a check in the amount of $150. See Notice of Intention to Arbitrate Employment Disputes with the American Arbitration Association, annexed to the Affidavit of Gregory L. Reid, sworn to July 28, 1998 ("Reid Aff."), as Exh. "1." On or about January 21, 1998, the AAA wrote Howard, notifying her that based on her $10 million claim, a filing fee of $9,000 would be required. Letter, dated Jan. 21, 1998, from Scott Besendorfer to Gregory L. Reid, annexed to Reid Aff., as Exh. "2." On February 6, 1998, the Court received a letter from Howard requesting the Court to compel defendants to pay all but $150 of the fees associated with arbitrating her claims. On March 11, 1998, the Court directed Howard to exhaust the AAA's mechanisms for waiving the fees associated with arbitration. On or about April 6, 1998, the AAA made the following ruling on Howard's hardship application:

  "$500 of the filing fee must be paid up front,
  with the remaining $2,500 portion of the filing
  fee to be deferred until the conclusion of the
  case. Please be advised that the Association can
  not waive or defer arbitrator's compensation, and
  accordingly those amounts will be [sic] become due
  upon commencement of the hearings. Additional
  administrative fees as described on page 29 of the
  National Rules for the Resolution of Employment
  Disputes [sic]."

Letter, dated April 6, 1998, from Scott Besendorfer to Gregory L. Reid ("April 1998 AAA Letter"), annexed to Reid Aff., as Exh. "5." On July 1, 1998, despite the untimeliness of Howard's initial request for relief, the Court directed her to file the instant motion.

DISCUSSION

I. Arbitration of Statutory Claims

Federal statutory claims are generally arbitrable because arbitration, like litigation, can serve a remedial and deterrent function. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). "By 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." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S.Ct. 3346, 87 L.Ed.2d 444; see Gilmer v. Inter-state/Johnson Lane Corp., 500 U.S. at 26, 111 S.Ct. 1647. "So long as the prospective litigant effectively may vindicate [her] statutory cause of action in the arbitral forum, the statute will continue to serve both its remedial and deterrent function." Gilmer v. Inter-state/Johnson Lane Corp., 500 U.S. at 28, 111 S.Ct. 1647. Accordingly, pre-dispute agreements to arbitrate Title VII claims are enforceable.*fn2 See e.g., Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361, 364-65 (7th Cir. 1999); Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith Inc., 163 F.3d 53, 59 (1st Cir. 1998); Seus v. John Nuveen & Co., 146 F.3d 175, 182 (3d Cir. 1998); Austin v. Owens-Brockway Glass Container, Inc., 78 F.3d 875, 882 (4th Cir. 1996); Metz v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 39 F.3d 1482, 1487 (10th Cir. 1994); Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698, 700 (11th Cir. 1992); Willis v. Dean Witter Reynolds, Inc., 948 F.2d 305, 308 (6th Cir. 1991); Alford v. Dean Witter Reynolds, Inc., 939 ...


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