On March 21, 2013, the Second Circuit issued its highly-anticipated decision enforcing an arbitration clause and holding that a Title VII plaintiff does not have a substantive right to proceed on a class-wide basis in arbitration or in court. Parisi v. Goldman, Sachs & Co., No. 11-5529-cv (2d Cir. Mar. 21, 2013).
Background
On September 16, 2010, plaintiff-appellee Lisa Parisi, a former managing director at Goldman Sachs who was terminated in November 2008, filed a putative class action against Goldman Sachs alleging pattern or practice gender discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. (Title VII) and the New York City Human Rights Law, Administrative Code of the City of New York § 8-107 et seq.
When Parisi was promoted to managing director in 2003, she signed a Managing Director Agreement that contained an arbitration clause requiring arbitration of "any dispute, controversy or claim arising out of or based upon or relating to Employment Related matters." The agreement was silent as to arbitration of class claims.
In November 2010, Goldman Sachs moved to compel arbitration of Parisi's claims pursuant to the Federal Arbitration Act (FAA), arguing that Parisi be required to pursue her individual claims in arbitration but, based on the Supreme Court's decision in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 130 S. Ct. 1758 (2010), Parisi could not pursue her class-wide claims in arbitration because the agreement was silent as to class claims. Parisi, however, claimed that individual arbitration was inappropriate because she did not agree to waive her substantive right to bring a Title VII pattern or practice claim against Goldman Sachs.
The District Court's Rulings
In April 2011, relying on In re American Express Merchants' Litigation, 634 F.3d 187 (2d Cir. 2011) (AmEx II), the magistrate judge refused to compel arbitration of Parisi's individual gender discrimination claims, finding the arbitration clause unenforceable because enforcement would effectively operate as a waiver of Parisi's substantive right under Title VII to pursue a pattern or practice discrimination lawsuit. The district court adopted the magistrate judge's recommendations. Goldman Sachs appealed.
The Second Circuit's Decision
On appeal, Goldman Sachs argued that there is no substantive statutory right to pursue a pattern or practice claim. Parisi, however, maintained that she had a substantive right...
