prior to its effective date. The OWBPA amendments only control
waivers executed on or after October 16, 1990. See OWBPA §
202(a) (reprinted in note to 29 U.S.C. § 626 entitled "Effective
Date of 1990 Amendment"). Thiele signed a series of registration
forms containing arbitration-related waivers during his
employment. He signed at least three forms before 1990 and at
least two forms after 1990. The arbitration clauses in the most
recent four forms are identical.
In California, a subsequent written contract alters the terms
of a previous contract. See Cal.Code Civ.P. § 1698; see also
Crain v. Burroughs Corp., 560 F. Supp. 849, 852 (C.D.Cal. 1983);
Crossen v. Foremost-McKesson, Inc., 537 F. Supp. 1076, 1077
(N.D.Cal. 1982). Such a partial modification "supersedes those
terms to which it relates." Han v. Mobil Oil Corp.,
73 F.3d 872, 876 (9th Cir. 1995). This Court finds that the agreement
contained in Thiele's 1995 Form U-4 supersedes the previous
agreements. This Court must therefore determine whether
enforcement of the arbitration clause in this agreement would be
contrary to law under the ADEA as amended by the OWBPA. Facially,
it appears that it would.
2. Procedural v. Substantive Rights
Defendant contends that arbitration in this case would not
violate the OWBPA because those amendments concern only waivers
of substantive, not procedural, rights. The right to a jury trial
is a procedural right, and as such, Defendant argues that
Thiele's waiver should not be scrutinized under the OWBPA waiver
requirements. Neither the plain meaning of the ADEA, nor the
legislative history comports with this view.
"The statutory command [of the OWBPA] is clear. . . . The OWBPA
implements Congress' policy via a strict, unqualified statutory
stricture on waivers and we are bound to take Congress at its
word." Oubre v. Entergy Ops., Inc., 522 U.S. 422, 118 S.Ct.
838, 841, 139 L.Ed.2d 849 (1998) (emphasis added). A basic canon
of statutory interpretation is that "[i]f the language of a
statute is clear and unambiguous there is no occasion to resort
to legislative history." Pipefitters Local Union No. 562 v.
United States, 407 U.S. 385, 446, 92 S.Ct. 2247, 33 L.Ed.2d 11
The Ninth Circuit has expressly adopted the Supreme Court's
approach to statutory interpretation: "The Supreme Court has
instructed that `[u]nless exceptional circumstances dictate
otherwise, [w]hen we find the terms of a statute unambiguous,
judicial inquiry is complete.'" Foxgord v. Hischemoeller,
820 F.2d 1030, 1034 (9th Cir. 1987) (quoting Burlington Northern R.
Co. v. Oklahoma Tax Comm'n, 481 U.S. 454, 461, 107 S.Ct. 1855,
95 L.Ed.2d 404 (1987) (citations omitted)); see also Alaska v.
Babbitt, 38 F.3d 1068, 1077 (9th Cir. 1994).
The ADEA expressly gives claimants a statutory right to a jury
trial. See 29 U.S.C. § 626(c)(2). In the same ADEA code
section, the statute explicitly prohibits the non-conforming
waiver of any right "under this chapter."
29 U.S.C. § 626(f)(1). The § 626(f)(1) rights "apparently" include the rights
to a jury trial. Duffield, 144 F.3d at 1189 n. 5. section
626(f)(1) is not ambiguous about the domain of protected rights
because it defines that domain as all rights conveyed by the
ADEA. As such, the plain language f this statute requires that
waivers of any statutory ADEA rights must meet the § 626(f)(1)
Even if the plain meaning of this statute were not clear, the
legislative history of the OWBPA supports the plain meaning
interpretation. By enacting the OWBPA, Congress sought to ensure
"that older workers are not coerced or manipulated into waiving
their rights to seek legal relief under the ADEA." S.Rep. No.
101-263. Where Congress expresses an intention to protect a
claimant's right to "legal" relief, it intends to protect that
claimant's right to a jury trial on demand: "In cases in which
legal relief is available and legal rights are determined, the
Amendment provides a right to [a] jury trial . . . [B]y providing
specifically for `legal' relief, Congress knew the significance
of the term `legal,' and intended that there would be a jury
trial on demand. . . ." Lorillard v. Pons, 434 U.S. 575, 583,
98 S.Ct. 866, 55 L.Ed.2d 40 (1978). In the legislative history of
the OWBPA, Congress expressed "unequivocal approval" for the
Lorillard decision. H.R. Rep. No. 101-664 (1990).
Furthermore, Congress expressly intended to accord "basic due
process protections to employees who are asked to execute
waivers" by enacting the OWBPA. S.Rep. No. 101-263. Congress
further discussed other procedural rights during its
deliberations and expressly referred to the right to a jury
trial: "[W]here procedural protections are involved, the ADEA
should treat older workers differently. . . . ADEA plaintiffs
have the right to jury trials. . . ." H.R.Rep. No. 101-664
(emphasis added). This Court therefore concludes that the right
to a jury trial is included in the rights designated in §
Additionally, according to the legislative history of the
OWBPA, this Court cannot consider any enforcement of this
waiver until ML has proven that the waiver is in compliance with
the OWBPA. Under the OWBPA, "[c]ourts may not consider whether
a `knowing and voluntary' waiver has been executed until the
party asserting the waiver as a defense first proves that each of
the requirements set forth in the bill has been satisfied."
S.Rep. No. 101-263 (1990). ML has failed to do so. Indeed, ML
cannot do so because this waiver was signed before any ADEA claim
arose and does not specifically refer to rights or claims under
the ADEA. Thus, this Court cannot enforce such a waiver for any
3. OWBPA's Application to Form U-4 Agreements
Defendants further contend that an application of the OWBPA is
not appropriate here because it is apparent from the legislative
history that Congress only intended to enact the OWBPA for use in
interpreting waivers in termination settlement agreements.
The plain meaning of the OWBPA is not ambiguous on this point.
According to the OWBPA amendments to the ADEA, "an individual may
not waive any right or claim under this chapter unless [the
eight statutory requirements are met]." 29 U.S.C. § 626(f)(1)
(emphasis added). "The policy of the OWBPA is likewise clear from
the title: It is designed to protect the rights and benefits of
older workers." Oubre, 118 S.Ct. at 841. Although Congress did
express a concern for termination agreements, they did not limit
the application of § 626(f) to such agreements. If Congress had
intended to limit the OWBPA waiver requirements to termination
agreements, the statute would contain such limiting language.
Furthermore, the legislative history supports this Court's
application of the OWBPA to the Form U-4. Congress did not intend
for the OWBPA to exclusively apply to just one type of agreement.
Transcending Congress' concern about termination agreements is
its concern about age discrimination and the difficulty that
older workers encounter when they are forced to re-enter the
workforce after a wrongful termination.
4. Related Holdings of Other Federal Courts
Other courts have had the occasion to consider an ADEA
claimants' right to a jury trial, but only one court has
considered an ADEA claimant whose waiver occurred after the
effective date of the OWBPA.
The Supreme Court and the Third Circuit properly declined to
extend the protections of the OWBPA to claimants who executed
waivers before the OWBPA was effective. The Supreme Court held in
1991, after the enactment of the OWBPA, that an ADEA claimant
waived the right
to a jury trial, even under the OWBPA amendments. See Gilmer,
500 U.S. at 28, 111 S.Ct. 1647. The Third Circuit considered a
similar fact pattern in 1998 and compelled the plaintiff to
arbitrate. See Seus v. John Nuveen & Co., Inc., 146 F.3d 175
(3rd Cir. 1998). Neither Gilmer nor Seus is analogous to this
case because those plaintiffs executed their Form U-4 agreements
prior to 1990. The OWBPA amendments only control waivers executed
on or after October 16, 1990. See OWBPA § 202(a) (reprinted in
note to 29 U.S.C. § 626 entitled "Effective Date of 1990
Amendment"). In the instant case, however, Thiele executed two
waivers after the effective date of the OWBPA. Thiele's post-1990
waivers must comport with the requirements of the OWBPA
amendments to the ADEA.
The Ninth Circuit has not specifically considered the impact of
the OWBPA on Form U-4 agreements. In Duffield, during its
consideration of Form U-4 agreements in Title VII cases, the
court indicated that future ADEA cases may "require different
treatment" due to the OWBPA amendments. Duffield, 144 F.3d at
1190 n. 5. However, the Duffield decision did not concern the
ADEA and did not explain what "different treatment" may entail.
The Fifth Circuit, however, has reviewed the impact of the
OWBPA on Form U-4 agreements and found the agreement enforceable.
See Williams v. Cigna Fin. Advisors, Inc., 56 F.3d 656 (5th
Cir. 1995). The plaintiff in Williams, like Thiele, did sign a
new Form U-4 after the effective date of the OWBPA, but the Fifth
Circuit ordered arbitration nonetheless. See id. at 659. The
Fifth Circuit expressed an unwillingness to invalidate all
pre-employment arbitration agreements for the purposes of the
ADEA and chose to limit the application of the OWBPA to
separation agreements only. see id. at 660-61. Because this is
contrary to the language to the statute, the Court respectfully
declines to follow the reasoning of the Williams court.
D. Thiele's FEHA Claim
Courts interpreting the FEHA look to interpretations of the
ADEA and Title VII. See Nidds v. Schindler Elevator Corp.,
113 F.3d 912, 916 (9th Cir. 1996). As such, the Ninth Circuit in
Duffield held that "FEHA claims are arbitrable to the same
extent as Title VII claims." 144 F.3d 1182, 1187 n. 3. Similarly,
this Court finds that Thiele's FEHA claims are arbitrable to the
same extent as his ADEA claims. Thiele has not waived his right
to a judicial forum for his ADEA claims and subsequently has not
waived his right to a judicial forum for his FEHA claims.
E. Thiele's Public Policy, Contract, and Tort Claims
Thiele also alleges termination in violation of public policy,
breach of implied employment contract, and tortious interference
with prospective advantage, in addition to his ADEA and FEHA
claims. These claims do not entail the same kind of stringent
requirements for the waiver of rights as do the ADEA and FEHA.
There is no bar to enforcing the Form U-4 arbitration clause with
respect to Thiele's public policy, contract, and tort claims.
See Duffield, 144 F.3d at 1200-1203.
F. Bifurcation of and Order of Proceedings
The law leads this Court to bifurcate the proceedings in this
case. Thiele's ADEA and FEHA claims, under the law, shall proceed
towards trial.a Thiele's public policy, contract, and tort claims
are arbitrable under the agreement and this Court stays the
proceedings with respect to these causes of action and compels
arbitration of these claims. The court in Duffield does not
address the issue of order of proceedings in finding that
Duffield's Title VII and FEHA claims are not arbitrable, but that
her state tort and contract claims were arbitrable. See
Duffield, 144 F.3d at 1203. Finding that it would present a
burden on the Parties to proceed towards trial and simultaneously
proceed in arbitration, this
court stays arbitration of Thiele's public policy, contract, and
tort claims pending resolution of Thiele's ADEA and FEHA claims,
whether via pre-trial proceedings, trial, or settlement.
G. Change in Rules and Policies
Thiele also argues that a rule change voted by NYSE and a
policy change by Merrill Lynch should constitute new evidence for
reconsideration. However, even if this Court had sufficient
evidence of these alleged changes, which it does not, these
changes do not apply to this case. Thiele is bound by NYSE rules
and Merrill Lynch policies in effect at the time that he
commenced this action. But since the Form U-4 did not contain a
knowing and voluntary waiver of Thiele's ADEA rights, as required
by the OWBPA, these rules and policies cannot supersede Thiele's
statutory right to a jury trial for his ADEA and FEHA claims.
Changes in rules and policies do not, however, preclude
arbitration of his public policy, contract, and tort claims.
The Court hereby GRANTS Thiele's Motion for Reconsideration,
VACATES this Court's April 8, 1998 and December 22, 1998 Orders,
ENTERS this Order Nunc Pro Tunc to December 22, 1998, and GRANTS
IN PART and DENIES IN PART Defendant's Motion to Compel
Arbitration and Stay the Proceedings. The Form U-4 clause is
unenforceable with respect to Thiele's ADEA and FEHA claims.
Therefore, with respect to the ADEA and FEHA claims, the Court
hereby DENIES Defendant's Motions to compel Arbitration and Stay
the Proceedings. The Form U-4 arbitration clause is enforceable
with respect to Thiele's public policy, contract, and tort claims
and therefore this Court GRANTS Defendant's Motion to Compel
Arbitration for these claims, but stays the proceedings pending
the resolution of Thiele's pending federal suit, which is
grounded jurisdictionally on the ADEA and FEHA claims. The
arbitration claims may then proceed to the extent issues therein
to be raised have not been subsumed in the federal suit by reason
of the doctrines of res judicata and collateral estoppel.
IT IS SO ORDERED.