Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, March 30, 1991 TAG: 9103300047
SECTION: BUSINESS PAGE: E-1 EDITION: METRO
SOURCE: By PETER T. KILBORN THE NEW YORK TIMES
DATELINE: CHARLOTTE, N.C. LENGTH: Long
The U.S. Supreme Court is preparing to answer that question in a case that has the potential to affect millions of workers.
Although the case concerns the long-established arbitration procedures of the securities industry, civil rights advocates say what is at stake is far more fundamental: a worker's right to sue the boss for discrimination on the basis of race, sex, religion or age.
The case began on the morning of Nov. 13, 1987. Two senior vice presidents of Interstate Securities Corp., a stock brokerage in Charlotte, came to the office of Robert Gilmer, another senior vice president.
As Gilmer recounts it, they told him that he had been doing good work but that his job had been eliminated. Gilmer, then 62 years old, said his duties were assigned to a 28-year-old woman whom he had trained.
"I was dumbfounded because this was a very profitable part of the company's business," he said. "The first person I called was my wife, and the very next was my friend John Allred."
Judge or arbiter?
Allred, his lawyer, brought an age-discrimination complaint against the company.
That complaint has yet to be heard. The question before the Supreme Court is who should hear it.
Gilmer, joined by advocates for the elderly, organized labor and other groups, says it should be the courts and civil rights agencies like the Equal Employment Opportunity Commission.
The securities company, joined by advocates for business, says it should be an arbitration panel.
When he took his job in 1981, Gilmer signed a standard industry form accepting compulsory arbitration of any disputes with Interstate, a regional investment company now known as Interstate/Johnson Lane Corp.
Although many industries use private arbitration to settle commercial disputes, and a few companies require arbitration to settle disputes with top executives, the securities industry's system is extraordinary in its scope.
It covers 6,000 companies and their 400,000 employees who are registered with the stock exchanges - nearly everybody above the level of clerk.
Everyone involved agrees that the implications of the Gilmer case go far beyond the securities industry.
In a brief in behalf of Gilmer, the American Association of Retired Persons said that if the Supreme Court rules against him, "whole industries will attempt to remove themselves from the purview of the courts and enforcement agencies by including compulsory arbitration provisions in employment applications and contracts."
Keeping to a deal
It added, "The multitude of statutes protecting employees' rights will be subject to the vagaries of individual arbitrators."
Only unionized workers, who make up 16 percent of the nation's work force, are insulated from whatever the high court rules; under federal labor law, unions can resort to the courts in defending their members' rights.
The U.S. Chamber of Commerce and the Equal Employment Advisory Council, which represents 230 of the nation's biggest companies, have filed briefs in support of Interstate.
Interstate's lawyers say arbitration is fairer than the courts because access to it is easy and comparatively cheap, and because decisions can be reached in a month or two.
"The system is geared to go right to the substantive hearing, while in court you can go through a whole series of things that can extend the case over a period of years," said William Fitzpatrick, general counsel of the Securities Industry Association, the leading trade group.
James Spears of the Charlotte law firm Haynsworth, Baldwin, Johnson & Greaves, which represents Interstate, said, "A lot of people might not pursue litigation because of the costs."
Besides, he said, "people who enter these agreements should live up to these agreements."
On its face, Gilmer's case is not the sort that stirs the passions of civil rights activists. He has had a long and successful sales career in the securities business. Now 65, he lives in an antique-filled town house on the edge of a Charlotte neighborhood of million-dollar 12- and 15-room Georgian houses.
He and his wife, Closs, own a small company in Bristol, Tenn., where 50 employees make women's blouses and nuns' habits.
Interstate recruited Gilmer from a Richmond firm where he worked 10 years ago.
"I came here," he said, "because they contacted me and said they needed somebody to develop their business in special products - mutual funds, tax shelters, insurance annuities."
He said he was given a share of the profits of the department he ran, and his lawyer, Allred, said the profits were such that Gilmer was earning nearly as much from them as from his salary. Just how much, neither man would say.
But Gilmer's concerns are the same as those of most older workers who lose their jobs.
He says he was given no severance pay and was deprived of the opportunity to build up his retirement fund. And when he set out in search of another job, he met the same obstacles older people usually do.
"I made an active effort to seek employment I thought I was qualified to do," he said. "But people know your age and they're kind of turned off by that. I didn't get a very good reception. He now spends part of the week at the apparel factory, which his wife runs.
Gilmer said that when he was dismissed he and Allred never considered arbitration. "We didn't think we could get a fair hearing," Gilmer said.
Instead, they went to the U.S. District Court for the Western District of North Carolina, in Charlotte, charging a violation of the Age Discrimination in Employment Act of 1967, which prohibits age discrimination in the work place, much as the Civil Rights Act of 1964 prohibits it on the basis of sex, race, religion or national origin.
Interstate urged the court to require Gilmer to accept arbitration, but in November 1988 the court ruled that Congress intended cases like Gilmer's to be heard in state and federal courts.
The company appealed to the U.S. Court of Appeals for the 4th Circuit, in Richmond. In February 1990 a three-judge panel of the appellate court ruled, 2-1, that other legislation, primarily the Federal Arbitration Act, permits arbitration of employee disputes and that the 1967 law did not preclude such arbitration in complaints of age discrimination.
That set the stage for the decision now facing the Supreme Court, which heard arguments in January and is expected to hand down its decision by the end of its current term in July.
by CNB