Equal Employment Opportunity Commission v. Luce, Forward, Hamilton, & Scripps

303 F.3d 994

Opinions

OPINION

TROTT, Circuit Judge.

The law firm Luce, Forward, Hamilton & Scripps LLP (“Luce Forward”) refused to hire Donald Scott Lagatree (“Laga-tree”) as a full-time legal secretary because he would not sign an agreement to arbitrate claims arising from his employment. On behalf of Lagatree, the Equal Employment Opportunity Commission (“EEOC”) sued Luce Forward for retaliation in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-3, the Americans with Disabilities Act of 1990 (“ADA”), 42 U.S.C. § 12208(b), the Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C. § 623(d), and the Equal Pay Act of 1963 (“EPA”), 29 U.S.C. § 215(a)(3). The EEOC sought make-whole relief for Lagatree and a permanent injunction forbidding Luce Forward from requiring that employees sign arbitration agreements as a condition of employment.

The district court refused to award make-whole relief and rejected EEOC’s request for an injunction based on the ADA, the ADEA, or the EPA. Relying on Duffield v. Robertson Stephens & Co., 144 F.3d 1182 (9th Cir.1998), however, the district court enjoined Luce Forward from requiring applicants to arbitrate Title VII claims and from enforcing existing agreements to arbitrate those claims.

We have jurisdiction over Luce Forward’s timely appeal pursuant to 28 U.S.C. § 1291. In Circuit City Stores v. Adams, 532 U.S. 105, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001), the Supreme Court implicitly overruled Duffield. Accordingly, we reverse the district court and hold that employers may require employees to sign agreements to arbitrate Title VII claims as a condition of their employment. We vacate the district court’s permanent injunction against Luce Forward, which relied exclusively on Duffield for the contrary proposition. We additionally reject the EEOC’s retaliation theory. Lagatree did not engage in a protected activity when he refused to sign the Luce Forward arbitration agreement, and consequently, Luce Forward did not retaliate by refusing to hire him.

BACKGROUND

Lagatree applied for a position as a full-time legal secretary with Luce Forward in September 1997. Impressed with Laga-tree’s credentials and experience, Luce Forward extended to him a conditional offer of employment. On his first day of work, Luce Forward presented Lagatree with its standard offer letter, which set forth the terms and conditions of employment. The letter specified Lagatree’s salary and benefits. His employment was at-will; “either[he] or the firm [could] terminate [his] employment at any time, with or without cause.” The offer letter also included an arbitration provision requiring Lagatree to submit all “claims arising from or related to his employment” to binding arbitration. In its entirety, the Luce Forward arbitration agreement provided:

In the event of any dispute or claim between you and the firm (including employees, partners, agents, successors and assigns), including but not limited to claims arising from or related to your employment or the termination of your employment, we jointly agree to submit all such disputes or claims to confidential binding arbitration, under the Federal Arbitration Act. Any arbitration must be initiated within 180 days after the dispute or claim first arose, and will be heard before a retired State or Federal judge in the county containing the firm office in which you were last employed. The law of the State in which you last worked will apply.

Lagatree objected to the arbitration provision. He told Deborah Sweeney (“Sweeney”), a Luce Forward personnel employee, that he “couldn’t sign ... the arbitration agreement” because “it was unfair.” In his deposition, Lagatree clarified that he would not sign an arbitration agreement under an at-will employment situation because he believed he needed to keep in place his “civil liberties, including the right to a jury trial and redress of grievances through the government process.” Sweeney then went to discuss the matter with Raymond W. Berry (“Berry”), the director of human resources at Luce Forward.

Lagatree worked for Luce Forward for two days without a contract while Luce Forward considered his vigorous objection to the arbitration provision. After those two days, Lagatree met with Berry and Sweeney. Lagatree asked whether Luce Forward “could strike” the arbitration provision from the offer letter. Berry responded that the arbitration agreement was a non-negotiable condition of employment at Luce Forward, and “if [Lagatree] didn’t agree to ... signing that clause, then he would not be an employee of the firm.” When Lagatree expressed his belief that “he didn’t feel that it was right,” Berry again “told him that[signing the arbitration provision] was the only way that he could stay — or become an employee of the firm.” Initially, Lagatree agreed to sign the arbitration provision, but a short time later Lagatree refused to do so, and consequently, Luce Forward withdrew its job offer. It is undisputed that Luce Forward refused to hire Lagatree only because he would not sign the arbitration provision.

In February 1998, Lagatree sued Luce Forward in Los Angeles Superior Court accusing Luce Forward of wrongfully terminating his employment. Lagatree sought lost wages, damages for emotional distress, and punitive damages. The Superior Court granted Luce Forward’s motion to dismiss, holding that Luce Forward did not unlawfully discharge Lagatree when he refused to sign a predispute arbitration agreement as a condition of employment. A California Court of Appeal affirmed, and the California Supreme Court denied review. Lagatree v. Luce, Forward, Hamilton & Scripps, 74 Cal.App.4th 1105, 88 Cal.Rptr.2d 664 (1999), review denied 2000 Cal. LEXIS 262, at *1 (Cal.2000).

While his state court suit was pending, Lagatree filed a complaint with the EEOC, alleging that he was wrongfully terminated for refusing to sign the Luce Forward arbitration provision. The EEOC sued Luce Forward on behalf of Lagatree and in the public interest, arguing that (1) Duf-field forbade Luce Forward from requiring Lagatree to sign an arbitration agreement, and (2) by refusing to hire Lagatree, Luce Forward unlawfully retaliated against him for asserting his constitutional right to a jury trial. The EEOC sought make-whole relief for Lagatree, including “rightful place employment,” back wages and benefits, and compensatory and punitive damages. The EEOC sought also a permanent injunction forbidding Luce Forward from engaging in unlawful retaliation and ordering Luce Forward to “desist from utilizing mandatory arbitration agreements.”

The district court denied any award of damages on behalf of Lagatree. Considering itself bound by Duffield, however, the district court felt it was “required to issue an injunction prohibiting [Luce Forward] from requiring its employees to agree to arbitrate their Title VII claims as a condition of employment and from attempting to enforce any such previously executed agreements.” The district court did not issue an injunction forbidding compulsory arbitration of ADA, ADEA or ERA claims. Nor did the district court expressly rule on the EEOC’s retaliation theory. Luce Forward timely appealed the district court’s injunction. The EEOC cross-appealed, seeking to enjoin Luce Forward from engaging in an “unlawful retaliatory practice by denying employment to any applicant ... who refuses to waive his right to participate in statutorily protected [ ] proceedings.”

STANDARD OF REVIEW

We review de novo the district court’s grant of summary judgment. Lopez v. Smith, 203 F.3d 1122, 1131 (9th Cir.2000) (en banc).

DISCUSSION

I DUFFIELD

An employer may not discriminate against “an employee or applicant for employment because of such individual’s race, color, religion, sex, or national origin,” 42 U.S.C. § 2000e-2(a)(l) (Title VII), “disability,” 42 U.S.C. § 12112(a)(ADA), or “age.” 42 U.S.C. § 623(a)(1) (ADEA). The EPA makes it unlawful to pay lower wages on the basis of an employee’s sex. 29 U.S.C. § 206(d)(1).

The Civil Rights Act of 1991 (“the Act”) strengthened Title VII by making it easier to bring and to prove lawsuits and by expanding the available judicial remedies so that plaintiffs could receive full compensation for injuries resulting from discrimination. H.R. Rep. No. 102-^40(1), at 30 (1991), reprinted, in 1991 U.S.S.C.A.N. 694, 694-96. The Act also included a “polite bow to the popularity of alternative dispute resolution,” as governed by the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16. Pryner v. Tractor Supply Co., 109 F.3d 354, 363 (7th Cir.1997). Specifically, § 118 of the Act provided that “[wjhere appropriate and to the extent authorized by law, the use of alternative means of dispute resolution, including ... arbitration is encouraged to resolve disputes arising under this chapter.” Pub. L. No. 102-166, 105 Stat. 1071 § 118 reprinted in notes to 42 U.S.C. § 1981 (“Section 118”); Cf. 42 U.S.C. § 12212 (“Where appropriate and to the extent authorized by law, the use of alternative means of dispute resolution, including ... arbitration is encouraged to resolve disputes arising under this chapter.”).

Congress passed § 118 against the backdrop of the Supreme Court’s decision in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). In that case, the Court held that an employer could compel arbitration of an employee’s ADEA claim pursuant to an arbitration provision required as a condition of his employment. The Court recognized that arbitration did not hinder the discrimination plaintiffs ability to vindicate her rights: “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 forum, rather than a judicial forum.” Gilmer, 500 U.S. at 26, 111 S.Ct. 1647 (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985)).¹ By this language, the Court judicially sanctioned the liberal federal policy favoring arbitration.

Despite the Supreme Court’s decision in Gilmer and Congress’s seemingly perspicuous language that § 118 encourages arbitration, we determined in Duffield that Congress intended to exempt Title VII claims from compulsory arbitration. 144 F.3d at 1185. In Duffield, Robertson Stephens required Tonya Duffield, “like every other individual who wishes to work in the United States as a broker-dealer in'the securities industry, to agree to arbitrate all disputes arising from her employment.” Id. Duffield signed her employment contract without objection and began working as a broker-dealer for Robertson Stephens. Id. at 1186.

Duffield subsequently sued Robertson Stephens for sexual discrimination and sexual harassment in violation of Title VII and California’s Fair Employment & Housing Act (“FEHA”). Robertson Stephens sought to compel arbitration pursuant to the compulsory arbitration provision in Duffield’s employment contract, while Duffield sought a declaration that the compulsory arbitration provision was unenforceable. The district court rejected Duf-field’s arguments and granted Robertson Stephen’s motion to compel.

On appeal, we reversed the district court’s order compelling arbitration. The opening paragraph of our opinion succinctly presented the issue for review: “[W]hether employers may require as a mandatory condition of employment ... that all employees waive their right to bring Title VII and other statutory and non-statutory claims in court and instead agree in advance to submit all employment-related disputes to binding arbitration.” Id. at 1185. We believed that the answer to this question was potentially dispositive of whether Robertson Stephens could enforce the compulsory arbitration agreement signed by Duffield. As we approached the case: (1) if Robertson Stephens could not require Duffield to sign an arbitration agreement as a condition of her employment, it surely could not enforce the agreement against her; whereas (2) if Robertson Stephens could require Duffield to sign an arbitration agreement as a condition of her employment, that agreement might be enforceable subject to the constraints of traditional contract law. See, e.g., First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 .S.Ct. 1920, 131 L.Ed.2d 985 (1995) (“applying] ordinary statelaw principles-that govern the formation of contracts” determining the validity of an agreement to arbitrate); Ferguson v. Countrywide Credit Indus., 298 F.3d 778, 784-85 (9th Cir.2002) (refusing compulsory arbitration of Title VII claims where arbitration agreement was unconscionable); Circuit City Stores, Inc. v. Najd, 294 F.3d 1104, 1108 (9th Cir.2002) (allowing arbitration); Circuit City Stores v. Ahmed, 283 F.3d 1198, 1199 (9th Cir.2002) (allowing compulsory arbitration of FEHA claims where agreement was not unconscionable); Prudential Ins. Co. v. Lai, 42 F.3d 1299, 1305 (9th Cir.1994) (refusing compulsory arbitration where plaintiff did not knowingly agree to arbitrate).

At the outset of Duffield, we observed that reading § 118 to allow compulsory arbitration of Title VII claims was “at odds with” Congress’s directive that Title VII be read broadly to effectuate its remedial purposes. 144 F.3d at 1192. We thought it “at least a mild paradox” that the Act, which expanded remedies for victims of discrimination, encouraged the use of a process whereby employers condition employment on their prospective employees’ surrendering of their rights to a judicial forum. Id. at 1192-93 (quoting Pryner, 109 F.3d at 363). These observations established the opinion’s foundation.

Building on this foundation, the Court undertook an exercise in statutory interpretation, commencing with an examination of § 118’s plain language. The Duf-field Court determined that, in context, Congress’s pronouncement in § 118 that “arbitration is encouraged to resolve disputes arising under [Title VII]” was ambiguous “at a minimum.” Duffield, 144 F.3d at 1193. To clarify this ambiguity, the Court turned to § 118’s legislative history. After picking and choosing snippets of legislative history consistent with its desired result, which the dissent sets forth “at some length,” the Court concluded that § 118 codified the law as it was understood before Gilmer — that employers could not compel prospective employees to forego their right to litigate Title VII claims in a judicial forum as a condition of employment. Id. at 1199. Accordingly, the Duf-field Court held that “under the Civil Rights Act of 1991, employers may not [through compulsory arbitration agreements] compel individuals to waive their Title VII right to a judicial forum.” Id. at 1185. As Robertson Stephens could not require Duffield to sign an arbitration agreement as a condition of her employment, the Court refused to enforce the arbitration agreement that she signed. Id. at 1199 (“In view of the fact that the context, language, and legislative history of the 1991 Act together make out a conclusive case, that Congress intended to preclude compulsory arbitration of Title VII claims, we think it inescapable that [Duffield’s arbitration agreement] is unenforceable as applied to such claims.”).

Those seeking to distinguish Duffield assert that it addressed only whether an employer may enforce compulsory arbitration of Title VII claims against its employees. See Weeks v. Harden Mfg. Corp., 291 F.3d 1307, 1315 (11th Cir.2002) (“[Duffield] ... stand[s] for the proposition that compulsory arbitration agreements are ‘unenforceable’ or are ‘inconsistent’ with Title VII.”); Borg-Warner Protective Servs. Corp. v. EEOC, 245 F.3d 831, 835 (D.C.Cir.2001) (“Duffield ruled only that such agreements are ‘unenforceable’ with respect to Title VII claims.”). We respectfully disagree with these narrow assessments. The Duffield Court decided whether an employer could require compulsory arbitration as a condition of employment — a question it believed disposi-tive of the entire case. The latter portions of Duffield which concluded that the arbitration agreement was unenforceable simply express the inevitable consequence of holding that employers may not require arbitration of Title VII claims as a condition of employment. See, e.g., id. at 1199. (“The contract before us [ ] requires compulsory arbitration ... and it is contracts of that nature we are compelled to hold unenforceable.... ”).

While Duffield properly considered whether an employer could require that an employee sign a compulsory arbitration agreement as a condition of employment, arguably its outcome was at odds with existing Circuit authority. In Mago v. Shearson Lehman Hutton Inc., 956 F.2d 932, 935 (9th Cir.1992), we held that Congress did not intend to preclude arbitration of Title VII claims. The Mago Court extended Gilmer to Title VII claims, finding probative the similarities between the ADEA and Title VIL Id. Mago, however, did not interpret (or even mention) § 118, even though Mago was decided months after its passage.

Later in Lai, we observed: “Gilmer ... made it clear that the ADEA does not bar agreements to arbitrate federal age discrimination in employment claims. Our Circuit has extended Gilmer to employment discrimination claims brought under Title VII.” Lai, 42 F.3d at 1303 (citing Mago) (emphasis added); see also id. (“The issue before us, however, is not whether employees may ever agree to arbitrate statutory employment claims; they can.”). Lai discussed § 118, and contrary to Duffield, concluded that Congress intended to allow arbitration of Title VII claims “where the parties knowingly and voluntarily elect to use these methods.” 42 F.3d at 1304-05 (citing H.R.Rep. No. 102-40(1) (1991), reprinted in 1991 U.S.C.C.A.N. 549, 635 (statement of Sen. Dole)). Although Dujfield cited both Mago and Lai, it did not address these decisions’ express statements that Gilmer and § 118 authorized compulsory arbitration of Title VII claims.

Since our Dujfield decision in 1998, our Sister Circuits as well as the Supreme Courts of California and Nevada have unanimously repudiated its holding. See, e.g., Desiderio v. Nat’l Assoc. of Sec. Dealers, Inc., 191 F.3d 198, 206 (2d Cir.1999) (referring to Dujfield’s reasoning as “the poet’s lament”); Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 170 F.3d 1, 7 (1st Cir.1999); Koveleskie v. SBC Capital Mkts., Inc., 167 F.3d 361, 365 (7th Cir.1999) (“We respectfully disagree with the Ninth Circuit on this issue ....”); Seus v. John Nuveen & Co., 146 F.3d 175, 182 (3d Cir.1998); Patterson v. Tenet Healthcare, Inc., 113 F.3d 832, 837 (8th Cir.1997); Cole v. Burns Int’l Sec. Servs., 105 F.3d 1465, 1482-83 (D.C.Cir.1997); Austin v. Owens-Brockway Glass Container, Inc., 78 F.3d 875, 882 (4th Cir.1996); Metz v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 39 F.3d 1482, 1487 (10th Cir.1994); Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698, 700 (11th Cir.1992); Alford, 939 F.2d at 230; Willis v. Dean Witter Reynolds, Inc., 948 F.2d 305, 307 (6th Cir.1991); see also Armendariz v. Foundation Health Psychcare Servs., 24 Cal.4th 83, 99 Cal.Rptr.2d 745, 6 P.3d 669, 675-76 (2000) (“Aside from the fact Duf-field is a minority of one, we find its reasoning unpersuasive.”); Kindred v. Second Judicial Dist., 116 Nev. 405, 996 P.2d 903, 906 (2000). Dujfield, like Bikini Atoll, now sits ignominiously alone awaiting remediation.

That remediation can occur, however, only if a decision of the Supreme Court permits us to question Dujfield. See United States v. Gay, 967 F.2d 322, 327 (9th Cir.1992) (“As a general rule, one three-judge panel of this court cannot reconsider or overrule the decision of a prior panel. An exception to this rule arises when an intervening Supreme Court decision undermines an existing precedent of the Ninth Circuit ....”) (internal citations and quotations omitted). In Circuit City, the Supreme Court so directly undermined the reasoning behind Dujfield, that we conclude it has lost its status as valid precedent.

In Circuit City, the Supreme Court reviewed our decision in Craft v. Campbell Soup Co., 177 F.3d 1083 (9th Cir.1998) (per curiam), in which we held that the FAA was not applicable to any contract of employment. The Supreme Court disagreed with Craft’s conclusion, clarifying that the FAA covered all employment contracts except those of transportation workers. Circuit City, 532 U.S. at 119, 121 S.Ct. 1302. In the process, the Court described the “real benefits to the enforcement of arbitration provisions,” including lower costs and easy choice-of-law resolution, and it rejected “the supposition that the advantages of the arbitration process somehow disappear when transferred to the employment context.” Id. at 122-23, 121 S.Ct. 1302. Most importantly, the Court believed it had “been quite specific in holding 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 ...; 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.” Id.

Although Circuit City did not repudiate Dujfield by name, the Supreme Court’s language and reasoning decimated Duf-field’s conclusion that Congress intended to preclude compulsory arbitration of Title VII claims. In particular, Circuit City’s unambiguous proclamation 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” cannot be reconciled with Duffield’s holding that Congress intended Title VII, one such “congressional enactment,” to preclude compulsory arbitration of discrimination claims.² Circuit City, 532 U.S. at 122-23, 121 S.Ct. 1302.

Similarly, the Supreme Court’s emphatic reminder that the right to a judicial forum is not a substantive right contradicts Duf-field’s fundamental supposition that the Act guaranteed a nonwaivable, substantive right to a jury trial.³ Compare Circuit City, 532 U.S. at 122-23, 121 S.Ct. 1302 (“[B]y agreeing to arbitrate a statutory claim, a party does not forgo the substan-five rights afforded by statute; it only submits to their resolution in an arbitral, rather than a judicial forum.”) with Duffield, 144 F.3d at 1185 (“[UJnder the Civil Rights Act of 1991, employers may not [through compulsory arbitration agreements] compel individuals to waive their Title VII right to a judicial fornm.”) (emphasis added). In effect, Circuit City recognized that an aggrieved employee does not lose anything by resolving his grievances in an arbitral forum, where he may demand the “specific protection” against discrimination afforded by federal law, including Title VII. Circuit City, 532 U.S. at 123, 121 S.Ct. 1302.

Instead of trying to salvage Duffield by creatively reconciling these inconsistencies as “different” yet “compatible holdings,” we reach the inevitable conclusion that Duffield no longer remains good law.⁴ We regard Duffield as within the category of “fruitful error.”⁵ In Duffield’s stead, we hold that an employer may require employees to arbitrate Title VII claims as a condition of employment. Our decision is consistent with the Supreme Court’s language and reasoning in Circuit City. It also unifies Ninth Circuit case law and brings us in line with our Sister Circuits and the Supreme Courts of California and Nevada. We note also that it is consistent with Congress’s pronouncement in § 118 that “arbitration is encouraged to resolve disputes arising under [Title VII].”⁶ Of course, not all compulsory arbitration agreements will be enforced; they must still comply with the principles of traditional contract law, including the doctrine of unconscionability.

Our decision today should not impact the EEOC’s mission at all. As the Supreme Court recently explained in EEOC v. Waffle House, Inc., 534 U.S. 279, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002), a compulsory arbitration agreement between an employer and an employee does not prevent the employee from filing a complaint with the EEOC. Nor does such an agreement bind the EEOC to an arbitral forum because the EEOC is not a party to that agreement. Id. Thus, even if an employee must arbitrate her Title VII claims pursuant to a compulsory arbitration agreement, the EEOC, in its ombudsman’s role, remains free to seek appropriate victim-specific relief in any suitable forum. Id. at 769.

Without further ado, we vacate the district court’s Duffield-based permanent injunction. Compelled by the Supreme Court’s decision in Circuit City, we conclude that Duffield no longer remains good law. Luce Forward may require appropriate compulsory arbitration of its applicants and employees as a condition of employment. In addition, Luce Forward may enforce those arbitration agreements against current employees, as long as the arbitration agreements comply with traditional principles of contract law.

II RETALIATION

Although the EEOC asserts that Circuit City did not implicitly overrule Duffield and that Duffield remains the law of the Circuit, the EEOC, nevertheless, does not place all its eggs in Duffield’s basket. In fact, the EEOC primarily argues that Luce Forward unlawfully retaliated against Lagatree by not hiring him after he refused to sign Luce Forward’s compulsory arbitration agreement.

The federal laws prohibiting employment discrimination make it unlawful for an employer to retaliate against an applicant or employee because she has engaged in a protected activity. See 42 U.S.C. § 2000e-3(a) (Title VII);⁷ 42 U.S.C. (a)(ADA); 29 U.S.C. § 623(d) (ADEA); 29 U.S.C. § 215(a)(3)(EPA). To establish retaliation, the EEOC, on Laga-tree’s behalf, must prove that: (1) Laga-tree engaged in a protected activity; (2) Lagatree suffered an adverse employment decision; and (3) there was a causal link between Lagatree’s activity and the adverse employment decision. See Hashimoto v. Dalton, 118 F.3d 671, 679 (9th Cir.1997). Protected activities include: (1) opposing an unlawful employment practice; and (2) participating in a statutorily authorized proceeding. Silver v. KCA, Inc., 586 F.2d 138, 141 (9th Cir.1978).

In this case, it is undisputed that Laga-tree suffered an adverse employment decision when Luce Forward refrained from hiring him because he refused to sign Luce Forward’s compulsory arbitration agreement. Luce Forward contests only whether Lagatree engaged in a protected activity when he refused to sign the arbitration agreement. See Jurado v. Eleven-Fifty Corp., 813 F.2d 1406, 1411 (9th Cir.1987) (finding adverse employment action and causal link were undisputed and only question was whether employee engaged in protected opposition conduct); EEOC v. Crown Zellerbach Corp., 720 F.2d 1008, 1011-12 (9th Cir.1983) (same).

A. Opposing an Unlawful Employment Practice

Lagatree’s refusal to sign Luce Forward’s compulsory arbitration agreement was not protected opposition conduct. Title VII’s statutory “opposition clause” prohibits an employer from retaliating against an applicant or employee “because he has opposed any practice made an unlawful employment practice.” See 42 U.S.C. § 2000e-3(a) (Title VII); see also 29 U.S.C. § 623(d) (ADEA); 42 U.S.C. § 12203(a)(ADA). It is not necessary that the policy opposed be demonstrably unlawful. Crown Zellerbach, 720 F.2d at 1013. If the employee’s refusal to accede to an employer’s policy is based on a reasonable belief that the policy is unlawful, the employee’s conduct is a protected manner of opposition. See, e.g., Passantino v. Johnson & Johnson Consumer Prods., 212 F.3d 493, 506 (9th Cir.2000) (“Title VII allows employees to freely report actions that they reasonably believe are discriminatory, even if those actions are in fact lawful.”).

In September 1997, however, when La-gatree refused to sign Luce Forward’s compulsory arbitration agreement as a condition of his employment, he could not have reasonably believed that Luce Forward’s arbitration policy was an unlawful employment practice. Indeed, on May 13, 1991, six years before Lagatree’s stint at Luce Forward, the Supreme Court in Gil-mer expressly permitted requiring compulsory arbitration of ADEA claims as a condition of employment. In addition, Congress amended Title VII with § 118 to provide explicitly that “arbitration is encouraged to resolve disputes arising under [Title VII].” Subsequently, in 1994, Lai extended the rationale of Gilmer to employment discrimination claims brought under Title VII. 42 F.3d at 1303. Finally, by 1997, at least five of our Sister Circuits had interpreted § 118 to permit compulsory arbitration of Title VII claims. Until Dujfield was decided May, 13, 1998 — -nearly a year after Lagatree’s refusal of Luce Forward’s employment offer — no Court of Appeals had concluded that § 118 forbade compulsory arbitration of Title VII claims. Cf. Weeks, 291 F.3d at 1312 (holding refusal to sign a compulsory arbitration agreement in 1999 was not protected opposition conduct because reliance on Duffield was not objectively reasonable). In the face of voluminous contrary legal precedent, La-gatree could not have reasonably believed Luce Forward was engaged in unlawful activity when it required arbitration as a condition of employment.

In addition, Lagatree could not have reasonably interpreted the text of any relevant federal statute to forbid compulsory arbitration. The EEOC argues that Laga-tree’s refusal to waive his procedural right to file or litigate a civil suit was protected opposition conduct because the ADA makes it “unlawful to coerce ... or interfere with any individual in the exercise or enjoyment of ... any right granted or protected by this chapter.” 42 U.S.C. § 12203(b) (emphasis added). The EEOC’s argument, however, assumes contrary to Supreme Court precedent that the right to a judicial forum is a substantive right guaranteed by the ADA.

By 1997, the Supreme Court had held repeatedly that “[b]y 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.” Gilmer, 500 U.S. at 26, 111 S.Ct. 1647 (quoting Mitsubishi, 473 U.S. at 628, 105 S.Ct. 3346). By this language, the Supreme Court distinguished between the substantive rights guaranteed by the statute and the right to a judicial forum.

Moreover, glaringly absent from the EEOC’s argument is any express statutory indication that arbitration of ADA claims (or any other employment discrimination claims) is disfavored. Section 12203 does not mention arbitration at all, and another section of the ADA, 42 U.S.C. § 12212, like § 118 of Title VII, provides that “arbitration is encouraged to resolve disputes.”

Lagatree could not have reasonably interpreted the ADA’s pronouncement that “arbitration is encouraged” to mean that “compulsory arbitration as a condition of employment is forbidden.” The EEOC fails to identify a single case from any Circuit that would have supported Laga-tree’s refusal to sign Luce Forward’s compulsory arbitration agreement. Because Lagatree could not have reasonably believed that Luce Forward’s policy of requiring arbitration was an unlawful employment practice, his opposition to that policy was not protected opposition conduct. Thus, as a matter of law Luce Forward’s refusal to hire Lagatree for not signing a compulsory arbitration agreement was not illegal retaliation.

B. Participating in a Statutorily Authorized Proceeding

By refusing to sign Luce Forward’s compulsory arbitration agreement, Lagatree was not participating in a statutorily authorized proceeding. Title VII, the ADA, and the ADEA make it unlawful for an employer to discriminate or retaliate against an employee or an applicant for employment because that person “has made a charge, testified, assisted, or participated in any manner in a ... proceeding.” 42 U.S.C. § 2000e-3(a) (Title VII); 42 U.S.C. § 12203(a)(ADA); 29 U.S.C. § 623(d) (ADEA). The EPA similarly makes it unlawful for an employer to discriminate or retaliate against any employee because such employee has “instituted or caused to be instituted a proceeding under or related the [the EPA], or has testified or is about to testify in any such proceeding.” 29 U.S.C. § 215(a)(3). A covered “proceeding” undoubtedly includes instituting “a civil action ... in a court of competent jurisdiction.” 42 U.S.C. §§ 2000e-5(f)(l), (3) (Title VII); 42 U.S.C. § 12117(a)(ADA); 29 U.S.C. § 626(c)(1) (ADEA); 29 U.S.C. § 216(b)(EPA). An individual who files a civil action has “participated in any manner” in a covered proceeding; thus an employer may not retaliate against that individual.

The statutory protections against retaliation also extend to an applicant or an employee who informs his employer of his intention to participate in a statutory proceeding, even if he has not yet done so. See Gifford v. Atchison, Topeka, & Santa Fe Ry. Co., 685 F.2d 1149, 1155-56 (9th Cir.1982) (holding employee states a retaliation claim after being fired for writing a letter threatening an EEOC charge). In Gifford, we saw no “legal distinction ... between the filing of a charge which is clearly protected ... and threatening to file a charge.” Id. at 1156 n. 3.

Here, the EEOC argues that Luce Forward cannot refuse to hire Lagatree because, although he did not file or threaten a civil action, he reserved his right to bring a civil action in a judicial forum. EEOC completes its argument as follows:

[Luce Forwardj’s practice of refusing to employ any individual who will not sign the compulsory waiver ... is effectively a preemptive strike against future participation conduct afforded absolute protection under each of the federal anti-retaliation provisions. Rather than wait for an employee to file or litigate a suit under a federal rights law, or to announce his intention to do so — at which point the employee unquestionably would be statutorily protected from any retaliatory adverse treatment, Luce Forward preemptively denies employment to' any individual who will not waive his right to engage in such protected participation activity.

Critical to the EEOC’s position is the notion that Lagatree’s right to a judicial forum is “afforded absolute protection under each of the federal anti-retaliation provisions.” That notion, and thus the EEOC’s entire position, lacks merit.

Although Lagatree undoubtedly retained the right to be free from discrimination, a right he could not prospectively waive, see, e.g., 29 U.S.C. § 626(f)(c), no federal law guaranteed him the ability to vindicate that right in a judicial forum. In fact, the Supreme Court in Gilmer condoned compulsory arbitration of ADEA claims as a condition of employment. Reaffirming Gilmer, in Circuit City, the Supreme Court extolled the advantages of arbitrating employment discrimination claims and rejected the “supposition that the advantages of the arbitration process somehow disappear when transferred to the employment context.” 532 U.S. at 123, 121 S.Ct. 1302. Most importantly, the Supreme Court clarified that the right to a judicial forum was not a substantive right: “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.” Id.

Waiving the right to a judicial forum is unlike signing a “yellow dog contract,” by which an employer forbids an employee from joining a union. An employee’s right to join a union is a substantive right guaranteed by the National Labor Relations Act, 29 U.S.C. § 151. No statute, however, forbids the compulsory waiver of a judicial forum, and thus demanding its waiver is not illegal. While Congress might have forbidden arbitration of employment discrimination claims, instead, it “encouraged” their arbitration.

Along with his experience and credentials, the privilege of a judicial forum was a valuable asset Lagatree brought to the negotiating table. During negotiations, Luce Forward offered Lagatree a base salary of $3,600/month plus substantial benefits in return for his services and his agreement to arbitrate employment-related disputes. Lagatree objected to Luce Forward’s demand of arbitration and coun-teroffered, asking that Luce Forward waive its compulsory arbitration requirement. Luce Forward refused to waive compulsory arbitration, and Lagatree initially decided to accept Luce Forward’s terms of employment. When Lagatree ultimately refused to agree to Luce Forward’s terms of employment, he simply made a rational economic decision that Luce Forward was asking too much and offering too little in return. But Luce Forward incurred no liability as a result of these failed negotiations; it only lost the potential services of a qualified applicant. Indeed, dickering over freely waivable rights is not a protected activity, and the failure to agree to the terms of an employment contract is not retaliation.

CONCLUSION

Circuit City implicitly overruled Duf-field, and therefore, we vacate the district court’s permanent injunction, which relied on Duffield. We hold that Luce Forward could require Lagatree to arbitrate potential Title VII claims as a condition of his employment. When Lagatree refused to sign the arbitration agreement, Luce Forward’s refusal to hire him was not unlawful retaliation because Lagatree’s right to a judicial forum is not afforded absolute protection under any federal statute.

VACATED; REMANDED TO THE DISTRICT COURT FOR JUDGMENT TO BE ENTERED IN FAVOR OF LUCE FORWARD.

1 . In the wake of Gilmer, the Supreme Court vacated and remanded the Fifth Circuit's decision in Alford v. Dean Witter Reynolds, Inc., which had held that an employee was not required to arbitrate her Title VII sex discrimination and sexual harassment claims despite having signed a compulsory arbitration agreement. 905 F.2d 104 (5th Cir.1990), vacated by 500 U.S. 930. 111 S.Ct. 2050, 114 L.Ed.2d 456 (1991) ("The judgment is vacated and the case is remanded to the ... Fifth Circuit for further consideration in light of Gilmer The Fifth Circuit reversed itself, holding that Title VII claims may be arbitrated pursuant to a compulsory agreement. Alford v. Dean Witter Reynolds, Inc., 939 F.2d 229, 230 (5th Cir.1991).

2 . The dissent claims we ignore the import of the word "compulsory” which it equates with "coercive” employer conduct. We do no such thing. However, instead of categorically prohibiting all so-called "compulsory” arbitration agreements, as the dissent would do, we police truly "coercive” employer conduct through the application of traditional contract law principles, including unconscionability, which specifically examines the question of coercion. See e.g., Armendariz v. Found. Health Psychcare Setv. Inc., 24 Cal.4th 83, 113-22, 99 Cal.Rptr.2d 745, 6 P.3d 669 (2000).

3 . The dissent cites Melton v. Philip Morris, Inc., No. Civ. 01-93-KI, 2001 WL 1105046, at *3 (D.Or. Aug. 9, 2001), for the proposition that Duffield "was not premised ... on the arbitral forum causing a loss of substantive rights,” but amazingly neglects to consider or explain Duffield’s own language to the contrary. See, e.g., Duffield, 144 F.3d at 1185.

4 . It seems our remedial efforts arrived not a moment too soon. Our own Court has begun to hack away at Duffield’s viability. See Circuit City Stores v. Najd, 294 F.3d 1104, 1106-07 (9th Cir.2002) ('Duffield’s continued validity is questionable.”). Our Sister Circuits have also begun to undermine Duffield. Weeks, 291 F.3d at 1315 ("Further, the viability of Duffield has been recognized to be in considerable doubt in light of the later decided Circuit City.’’)-, Borg-Wamer, 245 F.3d at 835 ("We cannot say whether the Ninth Circuit will continue to adhere to Duffield in the face of the Supreme Court’s Circuit City decision.”). More noteworthy, perhaps, our district courts are adrift, wondering whether Duffield remains valid precedent. Four district court opinions have held that Circuit City implicitly overruled Duffield. Farac v. Permanente Med. Group, 186 F.Supp.2d 1042, 1045 (N.D.Cal.2002) ("Circuit City implicitly overruled Duffield.”)-, Eftekhari v. Peregrine Fin. & Sec., Inc., No. C 00-3594 JL, 2001 U.S. Dist. LEXIS 16087, at *25, 2001 WL 1180640 (N.D.Cal. September 24, 2001); Olivares v. Hispanic Broad. Corp., No. CV 00-00354-ER, 2001 U.S. Dist. LEXIS 5760, at *1-2, 2001 WL 477171 (C.D. Cal. April 26, 2001); Scott v. Burns Int’l Sec. Servs., Inc., 165 F.Supp.2d 1133, 1137 (D.Hawai'i 2001) ("The Supreme Court's contrary statement in Circuit City that arbitration agreements do not contravene the policies of congressional enactments of the protections of federal law ... implicitly overrules .. . Duffield.”). However, three district court opinions have expressed the contrary view that Duffield remains valid precedent. Circuit City Stores v. Banyasz, No. C-01-3106 WHO, 2001 U.S. Dist. LEXIS 16953, at *6-8, 2001 WL 1218406 (N.D.Cal. Oct. 11, 2001); Melton, 2001 U.S. Dist. LEXIS, at *6-9, 2001 WL 1105046 (D.Or. Aug. 9, 2001); Ferguson v. Countrywide Credit Indus., Inc., No. CV00-13096AHM(CTX), 2001 U.S. Dist. LEXIS, 2001 WL 867103 (C.D.Cal. Apr. 23, 2001) aff’d on other grounds 298 F.3d 778 (9th Cir.2002) (Pregerson L).

5 .To quote the recently-departed polymath, Stephen J. Gould, "[a]s the great Italian economist Vilfredo Pareto wrote: 'Give me a fruitful error any time, full of seeds, bursting with its own corrections. You can keep your sterile truth for yourself.' " Stephen J. Gould, The Panda's Thumb, 244 (1980).

6 . "We do not resort to legislative history to cloud a statutory text that is clear.” Circuit City, 532 U.S. at 119, 121 S.Ct. 1302 (quoting Ratzlaf v. United States, 510 U.S. 135, 147-48, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994)).

7 . All the federal anti-discrimination statutes contain similar provisions forbidding retaliation. By way of representative example, Title VII, 42 U.S.C. § 2000e-3, provides:

It shall be an unlawful employment practice for an employer to discriminate against any of his employees or applicants for employment ... because he has opposed any practice made an unlawful employment practice by this subchapter or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this sub-chapter.