The opinion of the court was delivered by: Scheindlin, District Judge.
Plaintiff Suzanne Raiola ("Raiola") alleges discrimination on
the basis of her sex under Title VII of the Civil Rights Act of
1964 as amended, 42 U.S.C. § 2000e et seq. Defendant Warburg
Dillon Read LLC ("Warburg") moves to compel arbitration of
Raiola's claims pursuant to Sections 2-4 of the Federal
Arbitration Act ("FAA"), 9 U.S.C. § 2-4, and to dismiss or stay
this action if the case is submitted to arbitration. For the
reasons stated below, Defendant's motion to compel arbitration is
granted and this action shall be dismissed without prejudice to
reinstatement in the event further proceedings are required
following the arbitration.
In February, 1996, UBS Securities LLC ("UBS") hired Raiola as
an Assistant Trader at the firm's Over-the-Counter Equities Desk,
where she worked for a little over two years. See Plaintiff's
Complaint ("Pl's Cmplt.") at ¶¶ 4, 11; Defendant's Answer ("Def's
Ans.") at ¶¶ (B)4, (B)11. During this period, Raiola worked with
approximately 12 others, at times the only female, among whom she
was neither the most junior nor the most senior. See Pl's
Cmplt. at ¶ 12; Def's Ans. at ¶¶ (A)4, (A) 11, (B)12.
In June, 1998, UBS, along with the other subsidiaries of its
parent, Union Bank of Switzerland, merged with the Swiss Bank
Corp. and its subsidiaries.*fn1 See Pl's Cmplt. at ¶ 5; Def's
Ans. at ¶ (A)5. During the resulting consolidation of the two
firms, Raiola alleges that employment interviews were extended to
each member of Raiola's department, with the exception of Raiola
and one other employee. See Pl's Cmplt. at ¶¶ 13, 14; Def's
Ans. at ¶¶ (A)8, (A)9, (B)15. Although this other employee, a
male, was not interviewed, he was subsequently offered a
position. See Pl's Cmplt. at ¶ 16. Consequently, Raiola alleges
that all the male employees in Raiola's department were either
interviewed or offered employment positions. See Pl's Cmplt. at
¶¶ 13-16. Warburg denies that all the males and only males were
interviewed for post-merger positions. See Def's Ans. at ¶¶
(A)7, (A)8, (B)15. Raiola, however, was terminated even though
she was senior to many of the individuals who received offers and
had previously received outstanding evaluations and bonuses.
See Pl's Cmplt. at ¶¶ 11, 16; Def's Ans. at ¶ (A)6.
After filing a complaint with the EEOC, Raiola commenced an
action under Title VII of the Civil Rights Act alleging sex
discrimination. Raiola is now suing Warburg pursuant to Title VII
of the Civil Rights Act.
When UBS hired Raiola in 1996, as a condition of her employment
Raiola executed a form commonly known as a Uniform Application
for Securities Industry Registration or Transfer (a "U-4 Form").
See Pl's Cmplt. at ¶¶ 32, 33; Def's Ans. at ¶¶ (B)32, (B)33.
Paragraph Five of the U-4 Form states:
I agree to arbitrate any dispute, claim or
controversy that may arise between me and my firm, or
a customer, or any other person, that is required to
be arbitrated under the rules, constitution, or
by-laws of the organizations indicated in Item 10 as
may be amended from time to time and that any
arbitration award rendered against me be entered as a
judgment in any court of competent jurisdiction.
Raiola urges this Court to interpret the intent of the 1991
Civil Rights Act ("1991 CRA") as excluding civil rights claims
under such pre-dispute arbitration agreements. Warburg argues
that Raiola's claims unquestionably fall within her agreement to
To determine whether to compel arbitration, a court must decide
(1) whether the parties agreed to arbitrate; (2) the scope of the
agreement; and (3) whether Congress intended Title VII claims to
be arbitrated. Bird v. Shearson Lehman/American Express, Inc.,
926 F.2d 116, 118 (2d Cir. 1991) (citing Genesco, Inc. v. T.
Kakiuchi & Co., 815 F.2d 840, 844 (2d Cir. 1987)); DeGaetano v.
Smith Barney, Inc., 95 Civ. 1613, 1996 WL 44226, at *3 (S.D.N Y
The Federal Arbitration Act "reflects a legislative recognition
of the `desirability of arbitration as an alternative to the
complications of litigation.'" Genesco, 815 F.2d at 844
(quoting Wilko v. Swan, 346 U.S. 427, 431, 74 S.Ct. 182, 98
L.Ed. 168 (1953)). Section 2 of the FAA provides that "an
agreement in writing to submit to arbitration an existing
controversy . . . 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. § 2. This section is a
"`congressional declaration of a liberal federal policy favoring
arbitration agreements.'" Bird, 926 F.2d at 119 (citation
omitted). If the Court finds an arbitration agreement to be
covered by the FAA, it must refer the matter to arbitration.
DeGaetano, 1996 WL 44226, at *3.
In determining whether the parties agreed to arbitrate, the
Court must apply the "`federal substantive law of
arbitrability,'" Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 105 S.Ct. 3346, 87
L.Ed.2d 444 (1985) (citation omitted), "which comprises generally
accepted principles of contract law." Genesco, 815 F.2d at 845.
"Under general contract principles a party is bound by the
provisions of a contract that [s]he signs, unless [s]he can show
special circumstances that would relieve [her] of such
obligation." Id. This Court must focus "not on whether ...