Bosse v. New York Life Insurance Co. ( 2021 )

United States Court of Appeals
For the First Circuit
No. 19-2240
KETLER BOSSÉ,
Plaintiff, Appellee,
v.
NEW YORK LIFE INSURANCE COMPANY; NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION; NEW YORK LIFE INSURANCE COMPANY OF ARIZONA,
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Steven J. McAuliffe, U.S. District Judge]
Before*
Howard, Chief Judge,
Lynch and Barron, Circuit Judges.
Michael L. Banks, with whom David C. Dziengowski and Morgan,
Lewis & Bockius LLP were on brief, for appellants.
Robert M. Fojo, with whom Fojo Law, P.L.L.C. was on brief,
for appellee.
* Judge Torruella heard oral argument in this matter and
participated in the semble, but he did not participate in the
issuance of the panel's opinion in this case. Chief Judge Howard
was substituted for Judge Torruella on the panel pursuant to
Internal Operating Procedure VII(D)(4). Chief Judge Howard read
the briefs, reviewed the record, and listened to the audio
recording of oral argument.
March 30, 2021
LYNCH, Circuit Judge. The district court refused to
enforce arbitration clauses in the Employment Agreement between
Ketler Bossé and New York Life, which expressly require that any
disputes about arbitrability be referred to the arbitrator to
decide. The Supreme Court decisions in Henry Schein, Inc. v.
Archer & White Sales, Inc., 139 S. Ct. 524 (2019), First Options
of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), and other cases
result in our reversing that decision because the decision on
whether the dispute is arbitrable belongs to the arbitrator and
not to the court.
Bossé had a continuous business relationship with New
York Life for about fifteen years, during which time he worked
both as an independent contractor and, from 2004 to 2005, as an
employee. In 2016, New York Life terminated its business
relationship with Bossé.
Bossé brought this action in federal court alleging race
discrimination by New York Life in violation of 42 U.S.C. §§ 1981and 1985 and other claims under state law. In response, New York
Life invoked the arbitration clauses contained in Bossé's
Employment Agreement, which state "[t]he Partner and New York Life
agree that any dispute, claim or controversy arising between them,
including those alleging employment discrimination (including
sexual harassment and age and race discrimination) in violation of
a statute (hereinafter 'the Claim'), as well as any dispute as to
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whether such Claim is arbitrable, shall be resolved by []
arbitration." New York Life said the arbitration clauses survived
under an explicit "Survival" clause in the parties' Employment
Agreement and asked the court to compel arbitration and stay or
dismiss the lawsuit.
The district court refused to do either. We hold that
the district court's reasoning contravened the holdings in Supreme
Court decisions. The clause delegating all disputes about
arbitrability is clear, unmistakable, and unambiguous. It should
have been enforced on those terms. And even if there were any
ambiguity, and we see none, the presumption in favor of
arbitrability would lead to the same result. Reversal is required
under the Federal Arbitration Act ("FAA") and Supreme Court
opinions interpreting the FAA, and none of Bossé's other arguments
would permit affirmance.
I.
A. Facts
Because this appeal arises from an order on a motion to
stay proceedings and to compel arbitration in connection with a
motion to dismiss, "we draw the relevant facts from the complaint
and the parties' submissions to the district court on the motion."
Biller v. S-H OpCo Greenwich Bay Manor, LLC, 961 F.3d 502, 505 n.2
(1st Cir. 2020) (internal quotation marks omitted) (quoting Bekele
v. Lyft, Inc., 918 F.3d 181, 184 (1st Cir. 2019)).
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1. Bossé Is Hired as an Agent
Bossé began his business relationship with New York Life
in 2001 when he was hired as an agent. Bossé believes he was the
first black agent hired by New York Life in New Hampshire and
remained the only black agent working in New Hampshire as late as
2012.
Under the terms of the Agent's Contract, which he
executed with New York Life on November 15, 2001, Bossé was
authorized to solicit applications for various life and health
insurance and annuity policies, for which he earned commissions.
He, however, did not remain an agent but was promoted.
2. The Partner's Employment Agreement
On March 25, 2004, Bossé entered into a Partner's
Employment Agreement ("the Employment Agreement" or "the
Agreement") with New York Life.1 It is the terms of this Employment
Agreement that are at issue. The first line in the Employment
Agreement specifically identifies "KETLER BOSSE" as "PARTNER," and
below that the Agreement states "NEW YORK LIFE INSURANCE COMPANY
hereby authorizes the employment of the person named above as
Partner." The signature line at the end of the Agreement, on which
Bossé signed, is designated as "Partner Signature." It is
1 The Agreement contains a choice-of-law provision stating
that it "shall be governed by and interpreted in accordance with"
New York state law.
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undisputed that when Bossé entered the Employment Agreement, he
was a Partner. Under that Agreement, Bossé was paid a salary and
given the responsibility to recruit, to train, and to supervise
agents under the direction of a Managing Partner.
The Employment Agreement included an arbitration clause,
which specifies that
[t]he Partner and New York Life agree that any
dispute, claim or controversy arising between
them, including those alleging employment
discrimination (including sexual harassment
and age and race discrimination) in violation
of a statute (hereinafter "the Claim"), as
well as any dispute as to whether such Claim
is arbitrable, shall be resolved by an
arbitration proceeding administered by the
[National Association of Securities Dealers
("NASD")] in accordance with its arbitration
rules.
The arbitration clause also provides that
[i]n the event that the NASD refuses to
arbitrate the Claim, the Partner and New York
Life agree that the Claim, as well as any
dispute as to whether such Claim is
arbitrable, shall be resolved by an
arbitration proceeding administered by the
American Arbitration Association [("AAA")] in
accordance with its National Rules for the
Resolution of Employment Disputes
[("NRRED")].
As specified in the text, such disputes must be resolved
under certain specified rules. We highlight those rules. The
NASD referenced in the arbitration clause has been succeeded by
the Financial Industry Regulatory Authority ("FINRA") and it is
undisputed that the reference to the NASD rules should be read as
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incorporating the FINRA rules. FINRA Rule 13413 provides that
"[t]he panel has the authority to interpret and determine the
applicability of all provisions under the Code [of Arbitration
Procedure for Industry Disputes]."2 Rule 6 of the AAA Employment
Arbitration Rules and Mediation Procedures (formally named the
NRRED) states that "[t]he arbitrator shall have the power to rule
on his or her own jurisdiction, including any objections with
respect to the existence, scope or validity of the arbitration
agreement" and shall also "have the power to determine the
existence or validity of a contract of which an arbitration clause
forms a part."3
Finally, the Agreement contains a "Survival" clause,
which provides that various provisions of the contract "shall
survive termination of this . . . Employment Agreement by either
party for any reason." The arbitration clause is one of those
2 13413. Jurisdiction of Panel and Authority to Interpret
the Code, FINRA (Dec. 15, 2008), https://www.finra.org/rules-
guidance/rulebooks/finra-rules/13413.
3 Am. Arb. Ass'n, Employment Arbitration Rules and
Mediation Procedures 12 (2009), https://www.adr.org/sites/
default/files/EmploymentRules_Web2119.pdf. Rule 1 notes that
"[a]ny arbitration agreements providing for arbitration under [the
NRRED] shall be administered pursuant to these Employment
Arbitration Rules and Mediation Procedures." Id. at 10. In
addition, the introduction to these rules and procedures states
that they were developed for arbitration agreements contained in
employment agreements, independent contractor agreements, and
other types of workplace agreements. Id. at 9.
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provisions the parties expressly provided would survive
termination of the Agreement.
3. Bossé's Subsequent Work as an Agent and District
Agent and the Alleged Race Discrimination
At some point in 2005, Bossé transitioned back to working
as a contractor with New York Life under the Agent's Contract.
That contract did not contain an arbitration clause. He worked
with New York Life in that capacity until 2013, when he became a
District Agent.
Under the District Agent Agreement, Bossé was authorized
to establish his own firm separate from New York Life's general
office, at his own expense, and to hire his own agents, and he had
other responsibilities in addition to his normal duties as an
agent. The District Agent Agreement explicitly stated that
District Agents are "independent contractor[s] for all purposes"
and that it "does not and will not be construed to create the
relationship of employer and employee between New York Life and
[the] District Agent." The District Agent Agreement did not
contain an arbitration clause.
On January 15, 2016, Bossé was terminated from his
business relationship with New York Life pursuant to the at-will
employment provision in his Agent's Contract. He alleges he was
told he was being terminated because he had provided false or
inaccurate information in processing an electronic life insurance
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application for his ex-wife. Bossé denies any such misconduct and
asserts that the purported reason for his termination was
pretextual and that the real reason for his termination was his
race.
Generally, Bossé contends that New York Life and
specific employees undermined his relationships with his customers
and his agents in various ways. Bossé claims that he complained
of this misconduct to New York Life employees on several occasions
from 2013 to 2015, but that no action was taken to address it. He
asserts that white agents were not subject to this mistreatment
and that it constituted a pattern and practice of discrimination
because of his race and because he had recruited many minority
agents to his unit. Bossé alleges that he was the first and only
black District Agent hired by New York Life at the time his
business relationship with the defendants ended and that New York
Life generally failed to hire black agents.
B. Procedural History
On February 12, 2016, Bossé filed a charge of racial
discrimination and retaliation with the New Hampshire Commission
for Human Rights ("the Commission"). New York Life defended that
charge by producing to the Commission a copy of the Agent's
Contract, which established that Bossé was an independent
contractor, rather than an employee, at the time of the alleged
misconduct. The Commission thus dismissed the charge for lack of
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jurisdiction. New York Life did not argue to the Commission that
the charge of discrimination was subject to binding arbitration
and should have been dismissed on that basis.
On January 7, 2019, Bossé filed a complaint against New
York Life Insurance Company, New York Life Insurance and Annuity
Corporation, and New York Life Insurance Company of Arizona
(collectively "New York Life") in federal court in New Hampshire.
He brought claims for race discrimination and retaliation under 42
U.S.C. §§ 1981 and 1985, as well as various claims under New
Hampshire state law. In response to that complaint, New York Life
requested that Bossé dismiss the federal case and proceed to
arbitration. Bossé refused.
On April 9, 2019, New York Life filed a motion to dismiss
or, in the alternative, to stay proceedings and to compel
arbitration pursuant to Sections 3 and 4 of the FAA.4 9 U.S.C.
§§ 3-4. It argued that New York Life and Bossé had a valid
agreement "that any dispute, claim or controversy arising between
them, . . . as well as any dispute as to whether such Claim is
arbitrable, shall be resolved by [] arbitration." New York Life
argued that the arbitration clauses survived the termination of
4 New York Life's motion also sought to dismiss Count III
of the complaint for "Conspiracy to Interfere with Civil Rights"
in violation of 42 U.S.C. § 1985. The district court's decision
as to that portion of the motion is not before us on appeal.
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the Employment Agreement and that Bossé's claims fell within the
scope of the broad arbitration clauses. We refer to the
arbitration clauses rather than a single clause because under the
"Arbitration" heading in the Agreement there are separate
provisions in separate paragraphs. New York Life argued that under
the clauses, any disputes about the scope of the agreement to
arbitrate were explicitly assigned to the arbitrator to determine.
Bossé opposed New York Life's motion.
On November 13, 2019, the district court denied New York
Life's motion to stay proceedings and to compel arbitration. Bossé
v. N.Y. Life Ins. Co., No. 19-cv-016-SM, 2019 WL 5967204, at *6
(D.N.H. Nov. 13, 2019). The district court determined that the
question of whether these disputes fell within the arbitration
clauses was for it to resolve and not the arbitrator. See id. at
*4-5. It concluded that the language of the arbitration agreement
presented an issue of contract formation under New York state law.
See id. It also held that Section 2 of the FAA "itself requires
that an arbitration clause have some relationship to, some
connection with, the agreement or contract, as a condition of
federal enforcement." Id. at *5. Finding no such relationship
between the Employment Agreement and Bossé's claims here, the
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district court refused to enforce the arbitration clauses.5 Id.
at *6.
New York Life timely appealed.
II.
We have jurisdiction over an interlocutory appeal of a
denial of a motion to stay proceedings or to compel arbitration.
Marie v. Allied Home Mortg. Corp., 402 F.3d 1, 6 (1st Cir. 2005)
(citing 9 U.S.C. § 16(a)(1)). Given the legal nature of the issues
involved, we review the denial of the motion to stay proceedings
and to compel arbitration de novo. Id. at 9. "To compel
arbitration, the defendants 'must demonstrate [(1)] that a valid
agreement to arbitrate exists, [(2)] that the[y are] entitled to
invoke the arbitration clause, [(3)] that the other party is bound
by that clause, and [(4)] that the claim asserted comes within the
clause's scope.'" Grand Wireless, Inc. v. Verizon Wireless, Inc.,
748 F.3d 1, 6 (1st Cir. 2014) (third alteration in original)
(quoting Soto-Fonalledas v. Ritz-Carlton San Juan Hotel Spa &
Casino, 640 F.3d 471, 474 (1st Cir. 2011)).
5 The district court also concluded that New York Life's
interpretation of the survival clause contravened public policy by
impermissibly extending the statute of limitations. Id. at *6.
Bossé does not defend this aspect of the district court's decision
on appeal. Nor is the district court's reasoning on that point
persuasive. The survival clause does not change the limitations
period for any particular claim, but rather provides that all
claims must be brought in a specific forum, even after termination
of the Employment Agreement. And there is no statute of
limitations for enforcement of an arbitration agreement.
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A. The District Court Erred in Not Referring Disputes as to the
Arbitrability of the Claims to the Arbitrator
1. Disputes as to the Arbitrability of the Claims Are
Clearly, Unmistakably, and Unambiguously Delegated
to the Arbitrator
It is well-settled that arbitration is a matter of
contract.6 See, e.g., Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407,
1415-16 (2019); Granite Rock Co. v. Int'l Brotherhood of Teamsters,
561 U.S. 287, 296-97, 299 (2010); First Options, 514 U.S. at 943.
The Supreme Court has made clear that where the parties have agreed
to arbitrate, the FAA requires "courts [to] 'rigorously enforce'
arbitration agreements according to their terms." Am. Express Co.
v. Italian Colors Rest., 570 U.S. 228, 233 (2013) (quoting Dean
Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 221 (1985)); see also
Lamps Plus, 139 S. Ct. at 1412, 1416.
That applies to the enforcement of delegation clauses.7
In Henry Schein, the Supreme Court emphasized that where the
6 "When deciding whether the parties agreed to arbitrate
a certain matter (including arbitrability), courts generally . . .
should apply ordinary state-law principles that govern the
formation of contracts." First Options, 514 U.S. at 944.
7 We refer to an agreement to submit issues of
arbitrability to the arbitrator -- like the agreement at issue
here -- as a "delegation clause." A delegation clause "is simply
an additional, antecedent agreement the party seeking arbitration
asks the federal court to enforce, and the FAA operates on this
additional arbitration agreement just as it does on any other."
Henry Schein, 139 S. Ct. at 529 (quoting Rent-A-Center, W., Inc.
v. Jackson, 561 U.S. 63, 70 (2010)).
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parties "by clear and unmistakable evidence" delegate issues of
arbitrability to the arbitrator, "the courts must respect the
parties' decision as embodied in the contract" and send the issue
to the arbitrator to decide. 139 S. Ct. at 528, 530 (internal
quotation marks omitted) (quoting First Options, 514 U.S. at 944);
see also AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S.
643, 649 (1986). It held that a court cannot decide the
arbitrability question in such circumstances because that court
"thinks that the argument that the arbitration agreement applies
to a particular dispute is wholly groundless." Henry Schein, 139
S. Ct. at 529. Where there is a clear and unmistakable delegation
of arbitrability issues, the court's proper inquiry "before
referring a dispute to an arbitrator" is limited to "determin[ing]
[(1)] whether a valid arbitration agreement exists . . . [b]ut
[(2)] if a valid agreement exists, and if the agreement delegates
the arbitrability issue to an arbitrator, a court may not decide
the arbitrability issue." Id. at 530 (citing 9 U.S.C. § 2).8
Henry Schein builds on the Supreme Court's earlier
decisions, which reinforce this rule. "[C]ourts should order
8 The Court in Henry Schein remanded for the court of
appeals to determine whether there was clear and unmistakable
evidence of delegation in that case. See id. at 531. The Fifth
Circuit on remand concluded there was no such clear and
unmistakable evidence of delegation. Archer & White Sales, Inc.
v. Henry Schein, Inc., 935 F.3d 274, 281-82 (5th Cir. 2019).
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arbitration of a dispute only where the court is satisfied that
neither [(1)] the formation of the parties' arbitration agreement
nor [(2)] (absent a valid provision specifically committing such
disputes to an arbitrator) its enforceability or applicability to
the dispute is in issue." Granite Rock, 561 U.S. at 299 (second
emphasis added) (citing First Options, 514 U.S. at 943); see also
id. at 301, 303.
Bossé does not argue that the arbitration agreement was
invalidly formed. Nor does he challenge the validity or formation
of the delegation clause specifically.9 Rather, he asserts that
the arbitration agreement and the delegation clause do not apply
to his particular claims. The district court reasoned that the
issue was for it, not the arbitrator, to decide and then determined
the issue, in agreement with Bossé.10 See Bossé, 2019 WL 5967204,
at *4-5.
9 The dispute about the delegation clause clearly does not
undermine the formation or the validity of the agreements to
arbitrate. See Grand Wireless, 748 F.3d at 8 (enforcing an
arbitration agreement with broad language); see also Lamps Plus,
139 S. Ct. at 1412, 1416; Italian Colors Rest., 570 U.S. at 233.
10 The district court's reliance on Wexler v. AT & T Corp.,
211 F. Supp. 3d 500 (E.D.N.Y. 2016), in support of the proposition
that there was no enforceable agreement to arbitrate these
particular claims is misplaced. The court in Wexler held that an
unlimited arbitration clause presents an issue of contract
formation for lack of mutual intent to be bound and that the
arbitration agreement at issue was not enforceable for that reason.
Id. at 504-05. Bossé does not contend that the arbitration
agreement or the delegation clause were not validly formed or that
they are generally unenforceable.
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We hold that the text of the parties' agreement clearly,
unmistakably, and unambiguously delegates the arbitrability
dispute at issue here to the arbitrator. The district court erred
in not enforcing that agreement according to its own language and
in not referring the dispute about whether Bossé's claims are
arbitrable to the arbitrator.
First, the text of the arbitration agreement contains an
express delegation clause. The arbitration agreement states that
"[t]he Partner and New York Life agree that any dispute, claim or
controversy arising between them, including those alleging
employment discrimination (including . . . race discrimination) in
violation of a statute [(]'the Claim'), as well as any dispute as
to whether such Claim is arbitrable, shall be resolved by []
arbitration." The term "such Claim" is a defined term which refers
to "any dispute, claim or controversy arising between them." Thus,
the delegation clause provides that "any dispute as to whether
[any dispute, claim or controversy arising between them] is
arbitrable, shall be resolved by [] arbitration." There is no
language in that text that carves out from its application a
Moreover, the situation in Wexler is quite different
from that here. Unlike the customers who "check[ed] a box
accepting the 'terms and conditions' necessary to obtain cell phone
service," id. at 504, Bossé is a sophisticated party who had an
ongoing business relationship with New York Life and who submitted
no evidence that he did not understand the terms of the arbitration
agreement, the delegation clause, or the survival clause.
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particular type of claim or dispute. It is not the role of the
court to rewrite the parties' contract. See Lamps Plus, 139 S.
Ct. at 1412, 1416; Italian Colors Rest., 570 U.S. at 233.
Second, the Employment Agreement also contains other
text indicating the parties' clear and unmistakable intent in
addition to the text of the express delegation clause. The
arbitration clauses provide that "[t]he Partner and New York Life
agree that any dispute, claim or controversy arising between them,
. . . as well as any dispute as to whether such Claim is arbitrable,
shall be resolved by an arbitration proceeding administered by the
NASD in accordance with its arbitration rules" and that "[i]n the
event that the NASD refuses to arbitrate the Claim, the Partner
and New York Life agree that the Claim, as well as any dispute as
to whether such Claim is arbitrable, shall be resolved by an
arbitration proceeding administered by the [AAA] in accordance
with its [arbitration rules]." Rule 6(a) of the AAA Employment
Arbitration Rules and Mediation Procedures explicitly gives the
issue of whether claims are arbitrable to the arbitrator to decide.
That rules states that "[t]he arbitrator shall have the power to
rule on his or her own jurisdiction, including any objections with
respect to the existence, scope or validity of the arbitration
agreement." This Court is clear that incorporation of the AAA
arbitration rules constitutes clear and unmistakable evidence of
the parties' intent to delegate arbitrability issues to the
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arbitrator. Awuah v. Coverall N. Am., Inc., 554 F.3d 7, 11-12
(1st Cir. 2009).
Other text in the Employment Agreement mandates our
result. The survival clause reinforces the parties' intent that
issues of arbitrability be decided by an arbitrator even after
that Agreement was terminated. See Breda v. Cellco P'ship, 934
F.3d 1, 7 (1st Cir. 2019); see also Litton Fin. Printing Div. v.
NLRB, 501 U.S. 190, 205-06 (1991). Bossé largely ignores the
survival clause in his briefing, instead arguing that the clause
is "irrelevant." The clause is not irrelevant.11
The cases which Bossé cites in support of his argument
that there is no clear and unmistakable evidence of delegation of
the arbitrability dispute here are factually distinguishable.
None involves an express delegation clause, and several involve
11 Bossé does not explicitly argue that there was a novation
which superseded the Employment Agreement and the issue is waived.
Even if we were to bypass that waiver, we conclude the argument
fails.
Under New York law, "[t]he party claiming a novation has
the burden of proof of establishing that it was the intent of the
parties to effect a novation." Grimaldi v. Sangi, 113 N.Y.S.3d
771, 774 (N.Y. App. Div. 2019) (quoting Warberg Opportunistic
Trading Fund L.P. v. GeoResources, Inc., 58 N.Y.S.3d 1, 8 (N.Y.
App. Div. 2017)). Bossé has presented no evidence that the parties
intended to extinguish the obligations under the Employment
Agreement when they entered into the two subsequent agreements,
and the inclusion of the survival clause in the Employment
Agreement belies the notion that New York Life intended the
subsequent agreements between it and Bossé to terminate the earlier
arbitration agreement.
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arbitration agreements that had only an incorporation of an
arbitral forum's arbitration rules or included a provision
expressly carving out certain types of claims or disputes. See
First Options, 514 U.S. at 940-41 (no express delegation clause);
Archer & White Sales, Inc. v. Henry Schein, Inc., 935 F.3d 274,
277-82 (5th Cir. 2019) (no express delegation clause, only an
incorporation of AAA arbitration rules, carve-out provision for
certain actions and disputes); NASDAQ OMX Grp., Inc. v. UBS Sec.,
LLC, 770 F.3d 1010, 1016, 1031-32 (2d Cir. 2014) (same); Turi v.
Main St. Adoption Servs., LLP, 633 F.3d 496, 506-07, 510 (6th Cir.
2011) (very narrow arbitration agreement, no express delegation
clause, only an incorporation of AAA arbitration rules), abrogated
by Henry Schein, 139 S. Ct. at 529.12
Bossé also argues that the court must assess whether the
particular dispute falls within the scope of the arbitration
12 Turi, one of the cases on which Bossé relies -- and which
was explicitly abrogated by Henry Schein -- applied a version of
the "wholly groundless exception" that is quite similar to the
reasoning the district court applied in this case. See Turi, 633
F.3d at 511 (holding "that even where the parties expressly
delegate to the arbitrator the authority to decide the
arbitrability of the claims related to the parties' arbitration
agreement, this delegation applies only to claims that are at least
arguably covered by the agreement"), abrogated by Henry Schein,
139 S. Ct. at 529.
The other cases Bossé cites are inapposite because they
do not involve nor discuss the applicability of a survival clause
to an arbitration agreement. See Bogen Commc'ns, Inc. v. Tri-
Signal Integration, Inc., 227 F. App'x 159, 160-62 (3d Cir. 2007);
Vantage Techs. Knowledge Assessment, LLC v. Coll. Entrance
Examination Bd., 591 F. Supp. 2d 768, 770-72 (E.D. Pa. 2008).
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agreement to determine whether the arbitrability of that dispute
was delegated to the arbitrator. He argues the question of the
scope of the delegation clause is distinct from but related to the
scope of the arbitration agreement. His attempted atomization of
the arbitrability question is prohibited by the Supreme Court's
reasoning in Henry Schein. The question of the scope of the
delegation clause cannot be separated from the question of the
scope of the arbitration agreement as a whole here. His argument
has it backwards.
The delegation clause uses the term "such Claim," which
is a defined term that refers to "any dispute, claim or controversy
arising between them." That term also establishes the scope of
the arbitration agreement as a whole. Because of the incorporation
of this defined term into the delegation clause, any decision as
to whether a dispute falls within the scope of the delegation
clause necessarily decides whether it falls within the scope of
the arbitration agreement. Bossé's reasoning is thus circular: it
requires the court to consider for itself whether a particular
claim falls within the scope of the arbitration agreement and
delegation clause in order to determine whether the dispute should
be submitted to the arbitrator to determine its arbitrability. At
that point, the arbitrability question has already been answered
by the court, and the delegation clause here is rendered
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meaningless.13 This is precisely the type of "short-circuit[ing]
[of] the process" which concerned the Supreme Court in Henry
Schein. 139 S. Ct. at 527. It is merely an application of the
"wholly groundless exception" under a different guise. See id. at
528-31.
Finally, Bossé contends, and the district court
determined, that Section 2 of the FAA requires that an arbitration
clause have some relationship or connection to the underlying
contract to be enforceable, which the clauses purportedly lacked
with respect to Bossé's claims here.14 We have found no Supreme
Court or circuit case law -- and Bossé has not directed us to any
13 Not only does this reasoning contravene the Supreme
Court's holding in Henry Schein, but it also violates the principle
of New York state contract law that a "contract should be construed
so as to give full meaning and effect to all its provisions."
PaineWebber Inc. v. Elahi, 87 F.3d 589, 600 (1st Cir. 1996)
(quoting Am. Express Bank Ltd. v. Uniroyal, Inc., 562 N.Y.S.2d
613, 614 (N.Y. App. Div. 1990), leave to appeal denied, 572 N.E.2d
52 (N.Y. 1991)).
14 Section 2 of the FAA provides that
[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
. . . 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.
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-- which supports his contention regarding the "arising out of"
language in Section 2 of the FAA.15
2. Even Were There Some Purported Ambiguity, the
Presumption in Favor of Arbitrability Also Requires
that This Dispute as to the Arbitrability of the
Claims Be Referred to the Arbitrator to Decide
The FAA reflects a "liberal federal policy favoring
arbitration agreements," Oliveira v. New Prime, Inc., 857 F.3d 7,
12 (1st Cir. 2017) (quoting Moses H. Cone Mem'l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 24 (1983)), in which there is a
presumption that "any doubts concerning the scope of arbitrable
issues should be resolved in favor of arbitration," Moses H. Cone
Mem'l Hosp., 460 U.S. at 24-25; see also Granite Rock, 561 U.S. at
15 This Court has dealt with cases involving arbitration
agreements which explicitly include language requiring the claim
or dispute to "arise out of" or "relate to" the underlying contract
of which the arbitration agreement is a part. See, e.g., Biller,
961 F.3d at 506; Breda, 934 F.3d at 5; Grand Wireless, 748 F.3d at
4. But in those cases, the limitation on the sorts of arbitrable
disputes covered by the arbitration agreement was the result of
contract rather than Section 2 of the FAA.
This Court has also discussed the effect of Section 2's
language indirectly in dicta, but has not explicitly held that
language imposes an independent requirement on the federal
enforceability of arbitration agreements. See Local 205, United
Elec., Radio & Mach. Workers of Am. (UE) v. Gen. Elec. Co., 233
F.2d 85, 98 (1st Cir. 1956) (suggesting, in dicta, that a
collective bargaining agreement may fall outside the scope of
Section 2 of the FAA if the arbitration clause in the collective
bargaining agreement were not limited to controversies "arising
out of such contract or transaction"), aff'd by 353 U.S. 547(1957); see also Kristian v. Comcast Corp., 446 F.3d 25, 33 (1st
Cir. 2006) (holding that, as a matter of contract interpretation,
an arbitration clause applied retroactively to a dispute over
services provided which did not arise out of the agreement, but
not considering the separate FAA issue).
- 22 -
301-03; First Options, 514 U.S. at 944-45. The Supreme Court in
First Options made clear that where an agreement to arbitrate some
issues exists, and there is a dispute over the scope of the
arbitration agreement, the law requires that those matters be
presumed to be arbitrable "unless it is clear that the arbitration
clause has not included them." 514 U.S. at 945 (internal quotation
marks omitted) (quoting G. Wilner, 1 Domke on Commercial
Arbitration § 12.02, at 156 (rev. ed. Supp. 1993)).
Even if there were some ambiguity, under First Options
we apply the presumption in favor of arbitrability in determining
the scope of the delegation clause. Given the broad language of
the arbitration agreement and delegation clause, together with the
survival clause, there is enough of a textual hook to conclude
that Bossé certainly has not made it clear the delegation clause
here does not include this particular arbitrability dispute. See
First Options, 514 U.S. at 945. This dispute as to the
arbitrability of his claims should have been referred to the
arbitrator for this additional reason.16
16Even if there were ambiguity about whether the term
"Partner" encompasses Bossé specifically, or merely refers
generally to a person then in the position of "Partner," or whether
the arbitration agreement is limited to claims arising out of Bossé
and New York Life's employment relationship, those disputes also
go to the arbitrator because they involve a question of the scope
of the arbitration agreement.
- 23 -
B. New York Life Did Not Forfeit Its Rights Under Either the
Doctrine of Judicial Estoppel or Waiver
Bossé also asserts that New York Life forfeited its right
to arbitrate his claims as a result of both judicial estoppel and
waiver. The district court did not address these arguments. We
address them because they are quintessentially legal issues and no
further development of the record is needed to resolve them. See
United States v. Kin-Hong, 110 F.3d 103, 116 (1st Cir. 1997). We
find neither argument persuasive.
Bossé argues that New York Life should be judicially
estopped from and that it has waived any ability to compel
arbitration because it did not assert its right to arbitrate during
the proceedings before the New Hampshire Commission for Human
Rights. New York Life defended those proceedings by submitting a
copy of Bossé's Agent's Contract to support its argument that he
was not an employee at the time of the alleged misconduct and the
Commission lacked jurisdiction over his claims.
"[T]he doctrine of judicial estoppel prevents a litigant
from pressing a claim that is inconsistent with a position taken
by that litigant either in a prior legal proceeding or in an
earlier phase of the same legal proceeding." InterGen N.V. v.
Grina, 344 F.3d 134, 144 (1st Cir. 2003) (citing Pegram v.
Herdrich, 530 U.S. 211, 227 n.8 (2000)). It "is designed to ensure
that parties proceed in a fair and aboveboard manner, without
- 24 -
making improper use of the court system." Id. (citing New
Hampshire v. Maine, 532 U.S. 742, 749-50 (2001)). There are two
elements to a claim of implied waiver of the right to arbitrate
through inaction: (1) "undue delay" and (2) "a modicum of prejudice
to the other side." Rankin v. Allstate Ins. Co., 336 F.3d 8, 12
(1st Cir. 2003); see also Marie, 402 F.3d at 15.
There is no inconsistency and no undue delay from New
York Life asserting the jurisdictional defense to the Commission,
rather than invoking the arbitration agreement. The Commission
was a third party not bound by the terms of the arbitration
agreement. See Marie, 402 F.3d at 15. There is no issue before
us as to whether the Commission had jurisdiction, and it certainly
was not unfair or improper for New York Life to assert this
jurisdictional defense.
III.
On remand, the district court must enter an order
compelling arbitration and issue a stay upon sending the matter to
the arbitrator pursuant to 9 U.S.C. §§ 3 and 4. See Marie, 402
F.3d at 17.
Reversed and remanded. No costs are awarded.
-Dissenting Opinion Follows-
- 25 -
BARRON, Circuit Judge, dissenting. Under the terms of
the "Employment Agreement," "[t]he Partner and New York Life"
plainly agreed that "any dispute, claim or controversy arising
between them, including those alleging employment discrimination
(including sexual harassment and age and race discrimination) in
violation of a statute (hereinafter 'the Claim') . . . shall be
resolved by [] arbitration." Thus, they agreed that "the
Claim" -- defined as "any dispute, claim or controversy arising
between them" -- "shall be resolved by [] arbitration." (emphasis
added). But, what does "the Claim" encompass? Does it encompass
even a lawsuit that seeks recovery based on alleged actionable
misconduct by New York Life that first occurred only after the
Partner who signed the Employment Agreement was no longer a Partner
at all?
If the Employment Agreement said nothing more than what
I have just quoted from it, then it would be clear that the parties
had left the answer to that question about the meaning of "the
Claim" -- and, thus, about the scope of the arbitration agreement
that they had reached -- to a court to resolve. But, the majority
points out, the Employment Agreement also contains what is known
as a delegation clause, which operates as an ancillary agreement
to arbitrate certain specified matters concerning arbitrability.
See Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct.
524, 529 (2019). And, that delegation clause provides that "[t]he
- 26 -
Partner and New York Life agree that . . . any dispute as to
whether such Claim is arbitrable[] shall be resolved by []
arbitration."
The majority holds that the inclusion of this delegation
clause in the Employment Agreement is dispositive of this appeal,
because that clause is best construed to delegate to an arbitrator
the question of the meaning of "Claim" in the arbitration agreement
itself and thus the question of whether that term covers the race
discrimination suit that Ketler Bossé brings. Thus, the majority
concludes that the District Court erred in construing the scope of
the arbitration agreement not to encompass Bossé's suit, because
the question of whether the arbitration agreement encompasses that
suit was for an arbitrator and not for the District Court to
decide.
I cannot agree with that conclusion. It derives from a
superficially plausible but, in my view, ultimately textually
untenable construction of the delegation clause. Nor can I agree
with New York Life's contention that, even if the parties to the
Employment Agreement did not agree to delegate the question
regarding the scope of the arbitration agreement to an arbitrator
to resolve, the District Court erred in resolving that question as
it did. I thus write separately to explain why I would affirm the
District Court's ruling.
- 27 -
I.
There is no doubt that it would have been possible for
Bossé and New York Life to have drafted an employment contract
back in 2004 that would have contained both a delegation clause
and an arbitration agreement that would have, in combination,
sought to ensure that an arbitrator rather than a court would
decide whether any future lawsuit between them -- no matter how
far in the future the actionable conduct on which it would be based
would have first occurred -- was the type of lawsuit that they had
agreed to resolve through arbitration. But, the Employment
Agreement that they actually wrote does not contain a delegation
clause that assigns such a question of the scope of the arbitration
agreement to an arbitrator.
In concluding otherwise, the majority describes the
delegation clause as if it were one that "expressly
require[s] . . . any disputes about arbitrability [to] be referred
to the arbitrator to decide." Maj. Op. at 3. I do not dispute
that if this were what the delegation clause required, then the
question of the arbitration agreement's scope would have been
delegated to an arbitrator such that a court could not decide
it -- just as the majority holds. The words "any disputes about
arbitrability" in the majority's restated version of the
delegation clause plainly encompass disputes about the scope of
the arbitration agreement.
- 28 -
But, the words that the delegation clause actually uses
are not the ones that the majority deploys in its shorthand account
of what that clause "expressly require[s]." And, that shorthand
account fails properly to account for the words "such Claim" that
figure so prominently in the delegation clause.
That is not to say that the majority makes no attempt to
account for those two words in explaining why its paraphrase of
the delegation clause is accurate. It explains that the paraphrase
is revealed to be accurate if one substitutes for the words "such
Claim" in the delegation clause the definition of "the Claim" that
the arbitration agreement sets forth: "any dispute, claim or
controversy arising between them." See id. at 16-17.
According to the majority, such a substitution produces
a delegation clause that provides that "any dispute as to whether
[any dispute, claim or controversy arising between them] is
arbitrable, shall be resolved by [] arbitration." Id. at 16. For
that reason, the majority concludes, the plain text of the
delegation clause ensures that "any dispute" between the parties
to the Employment Agreement over the meaning of the scope of the
arbitration agreement is for an arbitrator and not a court to
decide. After all, the majority contends, a "dispute" over the
meaning of "the Claim" in the arbitration agreement is itself
obviously a "dispute" between the parties, such that the plain
- 29 -
text of the delegation clause necessarily encompasses it once the
substitution described above is made. See id.
But, this purportedly plain text reading of the
delegation clause fails to grapple with the use in that clause of
the word "such," which modifies the key word "Claim." This failure
is of concern, because the word "such," as a matter of grammar,
ensures that the word in the delegation clause that it
modifies -- "Claim" -- can be no more encompassing than the word
"Claim" in the arbitration agreement to which the word "such"
refers. See, e.g., United States v. Bowen, 100 U.S. 508, 512
(1879) (finding that "the qualifying word such . . . restricted"
the referent to the "class" of individuals "described in the
sentence which immediately precede[d] it"); Littlefield v. Mashpee
Wampanoag Indian Tribe, 951 F.3d 30, 37 (1st Cir. 2020) (quoting
Webster's New International Dictionary, according to which the
word "such" means among other things "of the sort or degree
previously indicated or contextually implied," and concluding that
"[n]ormal usage in the English language would read the word 'such'
as referring to the entire antecedent phrase" (emphasis added));
United States v. Ahlers, 305 F.3d 54, 59-61 (1st Cir. 2002)
(finding that the use of the word "such" in 18 U.S.C. § 3553(e)
"plainly refers back to" the entire antecedent phrase and thus
"retains . . . a reference point" that is "specific[ and]
carefully circumscribed").
- 30 -
Thus, the simple substitution that the majority makes,
in which it swaps out the words "such Claim" in the delegation
clause for the words that the arbitration agreement uses to define
"the Claim" in that clause, is more than a mere substitution. It
is an alteration -- subtle but crucial -- in the meaning of the
delegation clause.
The arbitration agreement in using the words "any
dispute, claim or controversy arising between them" to define "the
Claim" is necessarily referring only to the class of "dispute[s],
claim[s] or controvers[ies]" that the arbitration agreement itself
encompasses. And, that is a class of "disputes" -- to use a
shorthand for what it includes -- that obviously does not itself
encompass disputes about the arbitrability of those disputes.
Indeed, were that not the case, the delegation clause that is the
majority's focus would be superfluous. Thus, that class does not
itself encompass the particular dispute over arbitrability that is
at issue here, which concerns the scope of that very class, because
the arbitration agreement is not the place to look for an agreement
to arbitrate about arbitrability -- only the delegation clause is,
as the majority's own focus on that delegation clause to determine
whether it encompasses this dispute over arbitrability implicitly
acknowledges.
It is no objection to this more modest construction of
the delegation clause's scope, in my view, that it limits the range
- 31 -
of disputes about arbitrability that the clause encompasses to
fewer than all possible disputes about arbitrability. A delegation
clause need not delegate every issue of arbitrability, as the
parties are free to decide between themselves which, if any, issues
of arbitrability they wish for an arbitrator to resolve.
Nor is this a case in which a limited reading of the
delegation clause renders that clause useless. Although the word
"such" plainly limits the reach of the delegation clause for the
reasons that I have explained, the clause still clearly and
unmistakably assigns to an arbitrator the resolution of disputes
over whether the class of "dispute[s], claim[s] or
controvers[ies]" that the arbitration agreement covers -- whatever
that class encompasses in terms of scope -- are "arbitrable." And,
those delegated questions of arbitrability are hardly trivial
ones. They concern such potentially dispositive questions
regarding the enforceability of the arbitration agreement as
whether it is valid in the face of defenses like unconscionability
or mutual mistake.
Thus, the supposedly plain text reading of the
delegation clause that undergirds the majority's holding is in my
view simply mistaken, because the text refutes it. Indeed, if, as
the majority concludes, the parties had intended the question of
the arbitration agreement's scope to be itself decided through
arbitration, then the delegation clause would have had to provide
- 32 -
for a delegation along the lines of: "The Partner and New York
Life agree that any dispute as to whether such Claim is arbitrable
as well as any dispute as to what constitutes 'such Claim' shall
be resolved by arbitration." Or it could have used the more
economical phrasing that the majority's shorthand account of the
delegation clause uses. But, of course, the delegation clause was
not written in a manner that uses either formulation, and so does
not expressly require that a dispute over the scope of "Claim" in
the arbitration agreement be resolved by an arbitrator. Instead,
it expressly requires only that "any dispute as to whether such
Claim is arbitrable[] shall be resolved by [] arbitration."
The majority does suggest that the more limited
construction of the delegation clause that I conclude is required
renders the arbitral provisions of the Employment Agreement
hopelessly circular. See Maj. Op. at 20-21. But, I do not see
how that is so.
I quite agree that it is sensible to presume that the
parties who draft contracts do so more after the fashion of Bob
Ross than M.C. Escher. There is nothing circular, however, about
a delegation clause that requires a court to first determine the
scope of "the Claim" in the arbitration agreement before enforcing
the putative delegation clause. Contrary to the majority's
assertion, such a delegation clause simply reflects the fact that
the parties who drafted it intended that it would encompass only
- 33 -
those disputes that concern the arbitrability of the class of
"dispute[s], claim[s] or controvers[ies]" that the arbitration
agreement itself encompasses and not disputes over what that class
encompasses.
The majority does also attempt to support its
construction of the delegation clause by pointing to the fact that
the Employment Agreement incorporates the American Arbitration
Association's ("AAA's") National Rules for the Resolution of
Employment Disputes ("NRRED"). It contends that this
incorporation "constitutes clear and unmistakable evidence of the
parties' intent to delegate arbitrability issues to the
arbitrator." Maj. Op. at 17-18. That is so, according to the
majority, because Rule 6(a) of the NRRED provides that "[t]he
arbitrator shall have the power to rule on his or her own
jurisdiction, including any objections with respect to the
existence, scope or validity of the arbitration agreement." See
id. at 17.
But, the Employment Agreement is clear that the AAA will
only administer the arbitration proceeding "[i]n the event that
the [Financial Industry Regulatory Authority ("FINRA")] refuses to
arbitrate the Claim," and New York Life does not assert that this
antecedent condition is met in this case. See id. at 6-7. Thus,
for our purposes, the Employment Agreement incorporates only the
FINRA rules and not the NRRED, and nothing in the FINRA rules
- 34 -
purports to speak to the delegation question that we are facing.
See id. For that reason, the Employment Agreement's reference to
the NRRED does not indicate that a separate and broader delegation
provision that would encompass the scope question is operative for
our purposes. And, of course, the fact that the NRRED contemplate
that such a broader delegation provision would be operative if a
condition that has not been satisfied were satisfied cannot itself
expand the scope of the only delegation clause that otherwise is
in place.
The majority also invokes the Employment Agreement's
survival provision to support its construction of the delegation
clause. See id. at 18. But, here, too, I do not see how this
provision is of help, as that provision is just as consistent with
my construction of the delegation clause as it is with the
majority's.
The survival provision states that the arbitration
agreement and delegation clause "shall survive termination of
this . . . Employment Agreement by either party for any reason."
It thus ensures that the arbitration that the parties have agreed
to conduct -- whether with respect to the merits of a legal claim
or its arbitrability -- remains the required process for them to
use even after the Employment Agreement is terminated with respect
to those "dispute[s], claim[s] or controvers[ies]" that the
arbitral provisions encompass. But, the survival provision does
- 35 -
not purport to address the scope of those arbitral provisions. It
simply ensures that any dispute within their scope is still subject
to arbitration after the Employment Agreement has terminated.
Thus, per the survival provision, the arbitration
agreement and delegation clause would bind Bossé in a lawsuit in
which he sought recovery for racial discrimination that he alleged
he suffered while he was still a Partner but that he brought only
after he had left New York Life's employ. And the same is true if
he sought to challenge the enforceability of the arbitration
agreement as to that suit on the ground of unconscionability. For,
there is no question that such an employment-related suit and such
a dispute about its arbitrability would fall within the scope of
both the arbitration agreement and the delegation clause, and the
survival provision ensures that both that agreement and that clause
remain fully operative even once the employment relationship that
occasioned the Employment Agreement that contains them has ended.
What the survival provision does not do is address whether a suit
by Bossé that did not arise out of the employment relationship
between him and New York Life -- because it was grounded in alleged
misconduct by New York Life that first occurred after he had left
New York Life's employ -- would be subject to the delegation
clause. Thus, it has no bearing on the issue of the scope of the
delegation clause in that regard.
- 36 -
For all these reasons, then, I would construe the
delegation clause to mean just what it plainly says. And, thus,
I would read it to delegate only issues of arbitrability about
"such Claim" and not issues concerning what "Claim" means.
Accordingly, I conclude that the interpretive dispute before
us -- which regards the scope of the term "Claim" in the
arbitration agreement -- is an interpretive dispute that the
parties have left to a court and not an arbitrator to resolve.17
II.
Turning, then, to that dispute: Is Bossé's claim that
he was discriminated against based on his race in his role as an
independent contractor for New York Life -- and thus only after he
was no longer employed by the company -- a "Claim" within the
meaning of the arbitration agreement? I do not think it is, even
presuming a broad construction of the arbitration agreement. See
Granite Rock Co. v. Int'l Brotherhood of Teamsters, 561 U.S. 287,
302 (2010).
Because I conclude that the delegation clause is plainly
17
narrower than the majority reads it to be, I do not address here
whether the "clear and unmistakable" requirement that pertains to
the interpretation of delegation clauses means that we must
construe delegation clauses that clearly and unmistakably exist
narrowly insofar as they are ambiguous as to their scope. Henry
Schein, 139 S. Ct. at 530 (quoting First Options of Chi., Inc. v.
Kaplan, 514 U.S. 938, 944 (1995)). Nor do I understand New York
Life to argue in support of such a position, despite the fact that
it is the appellant, and so I would wait to address that
interpretive question until we have the adversary briefing on it
that we have not yet had.
- 37 -
New York Life itself concedes that the parties to the
Employment Agreement could not reasonably be thought to have
contemplated that the arbitration agreement would encompass even
a lawsuit between them that involved an injury that Bossé suffered
as a result of being hit by a New York Life vehicle only decades
after he had stopped being a "Partner" or even a New York Life
employee. Such a suit would not merely be accruing late. It would
not arise from their employment relationship at all.
For that reason, there is force in my view to the
District Court's observation that we ought to be wary of reading
the arbitration agreement in the Employment Agreement to be so
disconnected from the employment relationship that brought it
about that it may be read to encompass literally "any . . . claim"
(emphasis added) -- as those terms appear in a dictionary -- and
thus even such a late-occurring traffic accident. See PaineWebber
Inc. v. Elahi, 87 F.3d 589, 600 (1st Cir. 1996) (construing
contractual terms in the context of the entire agreement). As the
District Court observed, and as New York Life apparently agrees,
"a reasonable person signing the [Employment] Agreement would
hardly think that a slip and fall injury suffered by [the]
plaintiff on New York Life property 30 years in the future, and 25
years after any work or other relationship terminated, would be
subject to arbitration under that particular [arbitration]
clause." Bossé v. N.Y. Life Ins. Co., No. 19-cv-016-SM, 2019 WL
- 38 -
5967204, at *4 (D.N.H. Nov. 13, 2019); see also Smith v. Steinkamp,
318 F.3d 775, 777-78 (7th Cir. 2003) (Posner, J.) (rejecting a
reading of an arbitration clause in a loan agreement that would
apply to other loan agreements to which the parties subsequently
agreed because such a reading contained no "limiting principle"
and would therefore lead to "absurd results," such as the
conclusion that the parties had agreed to arbitrate any future
claim stemming from the borrower's hypothetical murder at the hands
of the lender).
Of course, if the text of the arbitration agreement were
plainly all-encompassing and thus irreconcilable with the more
modest intention of the parties just described, then we would face
the unenviable task of squaring the two. But, fortunately, the
text of the Employment Agreement is comfortably read to spare us
that exercise, as it readily supports a construction of the scope
of the arbitration agreement that excludes disputes that even the
party arguing for the broadest construction concedes could not
have been intended.
Notably, and contrary to New York Life's assertion, the
Employment Agreement does not define "Claim" in the arbitration
agreement broadly to encompass "'any dispute, claim or controversy
arising between' Mr. Bossé and New York Life." (emphasis shifted).
It refers instead to only disputes, claims, and controversies that
"aris[e] between" "[t]he Partner and New York Life." (emphasis
- 39 -
added). That is significant, in my view, because Bossé was not a
"Partner" when the alleged misconduct by New York Life that grounds
his lawsuit against that company is claimed to have first occurred.
Rather, Bossé contends that he was an independent contractor --
and so not an employee of New York Life at all -- at the time of
the actionable legal conduct by that company for which he seeks
recompense. In other words, his suit no more "aris[es]" out of an
employment relationship with New York Life than do the hypothetical
traffic accident and slip-and-fall suits that New York Life itself
acknowledges were beyond the contemplation of the contracting
parties precisely because they plainly do not arise out of that
relationship.
To be sure, Bossé is the "Partner" to whom the contract
means to refer. But, given that the contract is by its terms an
"Employment Agreement" between a "Partner" and his employer, and
given that the claim for liability at issue here does not concern
Bossé's status as either a "Partner" or even an employee of New
York Life any more than the hypothetical cases just mentioned do,
there is nothing strange in concluding that Bossé's claim for
liability arising solely out of that alleged post-employment
mistreatment by New York Life is not a "dispute, claim or
- 40 -
controversy" that has "aris[en] between" "[t]he Partner and New
York Life." (emphases added).18
This more modest reading of the Employment Agreement's
scope also draws support from other aspects of the text. For
example, the arbitration agreement singles out as the sole type of
"Claim" expressly covered by it one that alleges "employment
discrimination (including sexual harassment and age and race
discrimination)." (emphasis added). It would be surprising for
the parties to have felt the need specifically to clarify that
this one species of legal claim for recovery constitutes a "Claim"
in the arbitration agreement if New York Life's expansive reading
of "Claim" in that agreement were correct. After all, if there
were indeed no question that the arbitration agreement encompasses
"any" legal claim for recovery no matter its connection to the
employment relationship between the contracting parties, then
there would be no need to clarify that the arbitration agreement
also encompasses employment-related claims for recovery that
18 Of course, the delegation clause also sets forth an
agreement between the Partner and New York Life to arbitrate the
arbitrability of "the Claim," and it surely contemplates that the
arbitration of those disputes regarding arbitrability will arise
at a time when the Partner is no longer employed by that company.
But, precisely because those disputes will concern the
arbitrability of "the Claim," they will also necessarily be tied
to the employment relationship on the reading of "the Claim" that
I embrace.
- 41 -
concern discrimination, as such claims would hardly be at the edges
of what "the Claim" would cover.
By contrast, the specific reference to "employment
discrimination" claims in the arbitration agreement is much less
surprising if the contracting parties understood themselves to
have been agreeing to arbitrate only legal claims for recovery by
one against the other arising from their employment relationship.
On that understanding, it makes sense that they would have wished
to make clear that legal claims for recovery pertaining to
discrimination arising out of that employment relationship would
still be subject to arbitration, given that, unlike many types of
employment-related claims for recovery, those seeking recovery for
discrimination against a protected class are often statutorily
based and so might raise a question as to whether they, too, were
to be arbitrated like legal claims for recovery that are premised
only on the breach of the Employment Agreement itself.
Moreover, this more modest reading of "Claim" in the
arbitration agreement -- which construes that word to be limited
by the employment context that gave rise to the Employment
Agreement -- accords with the provision in the Employment Agreement
that provides that "[i]n the event that the [FINRA] refuses to
arbitrate the Claim, . . . the Claim . . . shall be resolved by an
arbitration proceeding administered by the [AAA] in accordance
with its National Rules for the Resolution of Employment Disputes."
- 42 -
(emphasis added). At the time at which the parties entered into
the Employment Agreement, the NRRED characterized the "[t]ypes of
[d]isputes" they "[c]overed" by stating that "[t]he dispute
resolution procedures . . . can be inserted into an employee
personnel manual, an employment application of an individual
employment agreement, or can be used for a specific dispute." Am.
Arb. Ass'n, National Rules for the Resolution of Employment
Disputes 7 (2004), https://www.adr.org/sites/default/files/
National%20Rules%20for%20the%20Resolution%20of%20Employment%20Di
sputes%20Jan%2001%2C%202004.pdf (emphases added). And, the NRRED
further provided that "[t]hese rules have been developed for
employers and employees who wish to use a private alternative to
resolve their disputes." Id. at 3 (emphases added). In fact, at
the time at which the parties entered into the Employment
Agreement, the NRRED made no reference to independent contractors,
even though subsequent versions of those rules expanded their scope
to apply to independent contractor agreements. See Am. Arb. Ass'n,
Employment Arbitration Rules and Mediation Procedures 9 (2009),
https://www.adr.org/sites/default/files/EmploymentRules_Web2119.
pdf.
I do realize that New York Life puts much weight on the
Employment Agreement's inclusion of the survival provision in
pressing for its all-encompassing reading of the arbitration
agreement. But, just as the survival provision -- contrary to the
- 43 -
majority's contention -- does not cut against the more limited
construction of the delegation clause that I embrace, it also does
not cut against the more limited reading of the arbitration
agreement's scope.
The survival provision ensures that arbitration remains
the required process for adjudicating "Claim[s]" that arise even
after the Employment Agreement is terminated. But, as I have
explained, claims arising out of the employment relationship
between Bossé and New York Life could accrue or be brought after
the termination of that relationship, for instance because they
might concern the termination itself, involve late-discovered
evidence, or simply have been brought post termination. Thus, the
inclusion of the survival provision tells us nothing about the
scope of "the Claim" in the arbitration agreement, as it concerns
only questions of timing regarding the class of suits that "the
Claim" encompasses. Thus, the survival provision continues to
perform a perfectly useful clarifying function even under the more
limited reading of the arbitration agreement's scope that the
District Court adopted.
I recognize as well that New York Life advances the
contention that, even if the hypothetical slip-and-fall and car-
accident suits noted above might lie outside the contemplation of
the parties to the Employment Agreement, the legal claim for
recovery at hand -- which concerns alleged mistreatment of Bossé
- 44 -
in his role as an independent contractor for New York Life -- is
somehow different. New York Life suggests that such a claim is
more tethered to the employment relationship that gave birth to
the Employment Agreement, because employees often become
independent contractors for the company. And, on that basis, New
York Life contends that such a claim should be understood to fall
within the arbitration agreement's scope even if those other less
work-related claims should not.
But, I cannot see any way to read the arbitration
agreement to permit us to engage in such sorting among what, in
the end, are all non-employment-based legal claims for recovery.
For the reasons I have given, I can see a textual basis for
construing the arbitration agreement to exclude from its scope
suits that arise from conduct by New York Life toward Bossé that
only occurred after he was no longer a Partner of New York Life.
I can see no similar textual basis, however, for construing the
arbitration agreement such that it would cover some such suits,
including this one seeking recovery for race discrimination, and
not others, such as one stemming from the hypothesized late-
occurring slip-and-fall or traffic accident. The word "Claim" may
not be self-defining, but it is simply not capable of being read
to encompass the former suit but not the latter two without
importing into that word some hazy standard of relatedness that is
fine for parties to ask courts to apply but that is hardly one
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that a court should try to conjure for them post hoc. See Paterson-
Leitch Co. v. Mass. Mun. Wholesale Elec. Co., 840 F.2d 985, 991-
92 (1st Cir. 1988) (calling on courts "no[t] . . . to rewrite
contracts freely entered into between sophisticated business
entities" (quoting RCI Ne. Servs. Div. v. Bos. Edison Co., 822
F.2d 199, 205 (1st Cir. 1987))).
Thus, given how unlikely it would be that -- as New York
Life readily concedes -- the parties to this employment contract
would have agreed to arbitrate any and all lawsuits between them
no matter what the parties' relationship was when the conduct
giving rise to the future lawsuit first occurred, I, like the
District Court, would construe the parties' handiwork in a manner
that would ensure that their arbitration agreement remains
tethered to the employment relationship that occasioned its
signing.19
19I note that Bossé also contends and the District Court
held that Section 2 of the Federal Arbitration Act ("FAA") supports
the conclusion that the Employment Agreement may not be construed
to require arbitration of all legal claims for recovery between
the parties, rather than of only employment-related ones. See
Bossé, 2019 WL 5967204, at *5. That Section provides that the FAA
applies to any "contract evidencing a transaction involving
commerce to settle by arbitration a controversy thereafter arising
out of such contract or transaction." 9 U.S.C. § 2 (emphasis
added). Bossé argues, and the District Court agreed, that his
suit alleging race discrimination did not arise out of his
Employment Agreement with New York Life because it arose instead
out of their subsequent contractual relationship once Bossé had
become an independent contractor for New York Life. See Bossé,
2019 WL 5967204, at *5.
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III.
The Supreme Court has made clear that the Federal
Arbitration Act reflects a policy in favor of arbitration. See,
e.g., Granite Rock, 561 U.S. at 302. But, courts have rightly
stayed true to the usual principles of contractual interpretation
even when construing arbitration agreements. See, e.g., Smith,
318 F.3d at 777-78; Bogen Commc'ns, Inc. v. Tri-Signal Integration,
Inc., 227 F. App'x 159, 160-62 (3d Cir. 2007). Following their
sensible approach in construing the arbitral provisions at hand,
I conclude that the District Court correctly interpreted the
Because Bossé's argument is limited to the interpretive
import of Section 2 for construing the scope of the arbitration
agreement, we have no occasion to decide whether a federal court
could properly consider New York Life's motion to compel
arbitration under the FAA if Bossé's suit alleging race
discrimination failed to constitute a "controversy" as defined by
Section 2. And, because I agree with the District Court's reading
of the scope of the arbitration agreement for reasons unrelated to
Bossé's argument about the influence that Section 2 might be
thought properly to exert on our construction of the scope of that
agreement, I see no reason to address Bossé's Section 2 argument
here. I do note, though, that it is hard for me to see how the
arbitration agreement -- as opposed to the delegation clause --
could be read to fall within Section 2 (at least with respect to
the arbitration agreement's full scope) if it did encompass Bossé's
suit, given that his suit concerns conduct by New York Life that
only occurred when they were no longer in the employment
relationship that occasioned the Employment Agreement that
contains the agreement to arbitrate. And I note as well that,
while the majority finds no Section 2 problem here, I understand
its analysis of Section 2 to be limited to that provision's bearing
on the proper construction of the delegation clause and so not to
address the relationship between Section 2 and the arbitration
agreement itself or any other issue relating to that provision.
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arbitration agreement in this case. Accordingly, I respectfully
dissent.
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