The Reverse-Entanglement Principle: Why Religious Arbitration of Federal Rights Is Unconstitutional.

• Author: Chua-Rubenfeld, Sophia

INTRODUCTION

Imagine you apply to be a cashier at a supermarket. At the beginning of the interview, you sign an employment application. You don't get the job, and your interviewer's remarks make you suspect it's because you are Muslim. You sue in federal court under Title VII of the Civil Rights Act of 1964. The supermarket moves to dismiss the suit because your employment application included an agreement to arbitrate all Title VII disputes. The court dismisses your case and compels arbitration.

You arrive to see that the arbitrator is a pastor. When you protest, the employer reminds you that the agreement specified arbitration by a Christian tribunal. And because the "Rules of Procedure for Christian Conciliation" permit holy scripture to trump federal law, you lose the case. (1) The district court then upholds the arbitrator's decision (2) under the highly deferential standard of review mandated by the Federal Arbitration Act (FAA). (3)

This scenario will likely strike readers as both unfair and implausible. But as this Comment documents, numerous recent cases have compelled religious arbitration of employment disputes, even in cases involving federal civil rights claims. Most strikingly, courts have compelled arbitration even when the arbitration agreement explicitly stated that holy texts would trump federal law. (4)

This Comment argues that this practice is unlawful for two reasons. First, the Supreme Court has upheld civil rights arbitration only on the rationale that arbitrators faithfully apply federal law. (5) This is not the case when a tribunal explicitly follows religious rules over federal law. Second, courts violate the Establishment Clause when they enforce arbitral decisions that apply religious principles to secular-law disputes. We argue that the Supreme Court's entanglement jurisprudence is about ensuring secular adjudication of secular disputes and religious adjudication of religious disputes. We therefore articulate a "reverse-entanglement" principle that protects secular law from religious interference. And although discrimination provides the most striking illustration of the stakes of the issue, this constitutional argument extends to religious arbitration of secular disputes more broadly. (6)

The rest of the Comment proceeds as follows: Part I briefly reviews the doctrine and critiques of civil rights arbitration. Part II documents the widespread nature of religious tribunals and shows how they uniquely undermine the Supreme Court's justification for civil rights arbitration. It also explains why litigants have not been able to escape religious arbitration by asserting traditional contract defenses. Finally, Part III contends that allowing religious tribunals to arbitrate secular rights violates the Establishment Clause.

1. DOCTRINE AND CRITIQUES OF ARBITRATION

   This Part provides an overview of civil rights arbitration and surveys common critiques. Section I.A briefly reviews the history of judicial deference to arbitration, recounting its expansion from commercial disputes to those involving statutory rights. Section I.B draws on empirical evidence and case law to cast doubt on the Court's insistence that arbitrators are suitable substitutes for judges in terms of how they apply and uphold the law.

   1. Case Law on Arbitration of Civil Rights

      Historically, common law courts were hostile to arbitration agreements. (7) Justice Story called arbitration "defective [and] imperfect," arguing that arbitrators "are not ordinarily well enough acquainted with the principles of law or equity, to administer either effectually." (8) Justice Story continued:

      [A]lthough a party may have entered into an agreement to submit his rights to arbitration, this furnishes no reason for a court of equity to deprive him of the right to withdraw from such agreement... and to declare that the common tribunals of the country shall be closed against him. (9) The Justice concluded that courts generally should not compel specific performance of arbitration agreements. (10)

      In 1925, Congress passed the FAA "to reverse the longstanding judicial hostility to arbitration agreements... and to place arbitration agreements upon the same footing as other contracts." (11) American courts gradually began to enforce arbitration agreements in admiralty and commercial contexts. (12) In practice, this means that modern courts facilitate arbitration in two different procedural postures. First, when a plaintiff initiates a federal lawsuit in violation of an agreement to arbitrate, the court will grant a defendant's motion to dismiss and compel arbitration. Second, after an arbitrator has resolved a dispute, the court will enter a judgment giving legal force to the arbitrator's award.

      From the 1970s onward, the Supreme Court has increasingly permitted arbitration not just over commercial disputes but also in areas of the law that traditionally required adjudication by courts. In particular, although courts had long considered contracts to arbitrate federal statutory rights to be void as against public policy, by the turn of the twenty-first century, courts had held arbitrable nearly all statutory rights (13)--from antitrust (14) to securities. (15) In the early 2000s, the Court took the dramatic additional step of holding that civil rights claims can be subject to arbitration.

      Two important cases permitting arbitration of civil rights disputes were Gilmer v. Interstate/Johnson Lane Corp. (16) and Circuit City Stores, Inc. v. Adams. (17) The Supreme Court approved arbitration under a civil rights statute for the first time in Gilmer, when it held that nothing in the text or legislative history of the Age Discrimination in Employment Act (ADEA) evinced congressional intent to shield age-discrimination claims from arbitration. And in Circuit City, the Court took no issue with an arbitration clause that swept even Title VII--which some called the "most important section" of the "most important civil rights legislation of the century"--within its reach. (18) Sales counselor Saint Clair Adams sued Circuit City in state court for discrimination under a California civil rights statute, alleging "on-the-job harassment and retaliation based upon his sexual orientation." (19) But Adams had signed a wide-ranging arbitration agreement in his employment application, which extended to all

      claims under federal, state, and local statutory or common law, such as the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, including the amendments of the Civil Rights Act of 1991, the Americans with Disabilities Act, the law of contract and [the] law of tort. (20) Adams's employer sought a court order to enforce this contract provision and compel arbitration under the FAA. In a 5-4 decision, the Court held that the FAA extended to employment contracts, including those requiring arbitration of discrimination claims. Emphasizing the cost-saving benefits of arbitration, the Court insisted that "arbitration agreements can be enforced under the FAA without contravening the policies of congressional enactments giving employees specific protection against discrimination prohibited by federal law." (21)

      In the years since the Circuit City decision, the Supreme Court has also upheld the arbitrability of a race-discrimination claim brought by a man passed over for promotion because he was black (22) and age-discrimination claims brought by night watchmen forced out of their positions. (23) Circuit courts have compelled arbitration of sex-discrimination, (24) pregnancy-discrimination, (25) and religious-discrimination claims. (26) In short, it is now settled law that civil rights disputes can be forced out of court and into arbitration.

   2. Problems with Arbitration: Threats to Substantive Rights

      The Supreme Court's rationale for allowing civil rights arbitration rests on the dubious legal fiction that arbitrators protect statutory rights as effectively as do judges. In expanding the scope of arbitration, the Court has repeatedly recited a familiar incantation: "By agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum." (27) The Court has further stated that "there is no reason to assume at the outset that arbitrators will not follow the law." (28)

      Despite these recitations, it is now well documented that arbitration provides diminished protection for statutory rights. Paul Carrington and Paul Haagen have argued that because arbitrators make a living from continued business with repeat players, they suffer from an "endemic disinclination to enforce legal rights." (29) Carrington and Haagen note that the FAA "confers a subpoena power on arbitrators, but otherwise makes no provisions for discovery," which prevents arbitrators from "detecting wrongdoing and enforcing the rights of victims." (30) They outline a host of other procedural deficiencies in the Act; for example, arbitrators are not required to explain decisions or even to record the evidence that led to them. (31) Carrington and Haagen's forceful verdict is that "[n]o matter how frequently the Court may insist" that arbitration protects substantive rights, it is "simply false doctrine." (32)

      Empirical studies support Carrington and Haagen's diagnosis. One survey asked two hundred commercial arbitrators, "Do you always follow the law in formulating your awards ?" A full twenty percent responded "No. " (33) Even among those who said "Yes," several arbitrators explained that they "tempered" their awards "with a concept of 'equity.'" (34) Another study likewise found that twenty percent of interviewed arbitrators did not agree "that they ought to reach their decisions within the context of the principles of substantive rules of law," and "almost 90 per cent believed that they were free to ignore these rules whenever they...