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Benefits Communication Corp. v. Klieforth

June 9, 1994


Appeal from the Superior Court of the District of Columbia; (Hon. George W. Mitchell, Trial Judge)

Before Ferren,* Acting Chief Judge, and Steadman and King, Associate Judges.

The opinion of the court was delivered by: King

Opinion for the court by Associate Judge KING.

Concurring opinion by Acting Chief Judge FERREN.

KING, Associate Judge: Appellee Laurette C. Klieforth ("employee") filed a complaint against appellants Great West Life Assurance Co. ("Great West") and its subsidiary Benefits Communication Corporation ("BCC"), who was her employer, alleging appellants had denied her a promotion on the basis of her sex in violation of the District of Columbia Human Rights Act ("Human Rights Act"). *fn1 Shortly after the Supreme Court's decision in Gilmer v. Interstate/Johnson Lane Corp., *fn2 which upheld an arbitration provision for an age discrimination claim, appellants moved to compel arbitration of Klieforth's discrimination claim. After extensive briefing and argument, Judge Mitchell denied the motion, concluding the Civil Rights Act of 1991 ("the 1991 amendments") *fn3 retroactively overruled the Supreme Court's Gilmer decision. Concluding that the trial court erred in so doing, we reverse and remand for further proceedings.


On October 30, 1985, the employee executed a "Uniform Application for Securities Industry Registration or Transfer" ("Form U-4") *fn4 in contemplation of beginning employment with BCC as a securities dealer. *fn5 On January 2, 1986, the employee was hired by BCC as an account executive, an office support position. After passing an examination that qualified her to sell securities, Klieforth was promoted to the position of "Employer Sponsored Specialist" selling retirement related registered insurance products and securities. Some time thereafter, although the record is not clear on this point, the position of vice president of sales of the Washington, D.C. office became available and the employee, having already assumed many of the duties of that position, became a candidate for that post and expected to be promoted to it, Her expectations were not realized, and the vice president of sales for the Detroit office, a male, was actually appointed.

On October 10, 1990, the employee filed a complaint in the Superior Court alleging she was denied the promotion because of her sex in violation of the Human Rights Act. On June 24, 1991, just six weeks after Gilmer was decided, appellants filed a motion to compel arbitration pursuant to the Federal Arbitration Act ("FAA"), *fn6 the District of Columbia Uniform Arbitration Act, *fn7 and section 8 (a) of the National Association of Securities Dealers ("NASD") Code of Arbitration Procedures. *fn8 The employee opposed, contending: (1) sections 1 and 8 (a) of the NASD code only provide for the arbitration of disputes relating to the business activities of NASD members; (2) the NASD code does not address employment discrimination claims; (3) appellants waived any right to arbitration by participating in the law suit; and (4) sex discrimination claims under the Human Rights Act are not subject to mandatory arbitration. *fn9

On July 10, 1992, Judge Mitchell, ruling from the bench, denied the motion to compel submission to arbitration. Judge Mitchell concluded:

We . . . have examined the legislative history surrounding the Civil Rights Act of 1991, and that legislative history clearly says that . . . they encourage alternative methods of resolving disputes, but they do not mean to supplant those rights as found under Title VII.

In other words, they may give it up after they enter into negotiations and decide that we will submit this matter to arbitration, and the Court encourages that. And the legislative history encourages it.

But . . . the [Gilmer court] . . . indicated that the -- if it had legislative history [of the Age Discrimination in Employment Act] which indicated something separate from . . . the Conclusion reached in , that it would more or less follow that legislative history . . . . The Congress seemed to have taken extra and unusual steps to make it clear that they did not intend . . . the 1991 Civil Rights Act to be . . . governed by the principle purportedly espoused in the case.

We read this passage as a ruling by the trial Judge that the 1991 amendments overrule the holding of Gilmer. The trial Judge did not, however, reach any of the other grounds raised by the employee in opposition to the ...

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