Circuit City Stores, Inc. A Virginia Corporation v. Saint Clair Adams, a California Resident

The Supreme Court granted certiorari, reversed this court’s prior decision, and remanded for proceedings in accordance with its opinion in Circuit City Stores, Inc. v. Adams, 532 U.S. 105 , 121 S.Ct. 1302 , 149 L.Ed.2d 234 (2001). Now that the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., applies to the arbitration agreement in this case, we must decide whether the district court erred in exercising its authority under the Act to compel arbitration.

I. FACTUAL AND PROCEDURAL BACKGROUND

On October 23, 1995, Saint Clair Adams completed an application to work as a sales person at Circuit City. As part of the application, Adams signed the “Circuit City Dispute Resolution Agreement” (“DRA”). The DRA requires employees to submit all claims and disputes to binding arbitration. Incorporated into the DRA are a set of “Dispute Resolution Rules and Procedures” (“dispute resolution rules” or “rules”) that define the claims subject to arbitration, discovery rules, allocation of fees, and available remedies. Under these rules, the amount of damages is restricted: back pay is limited to one year, front pay to two years, and punitive damages to the greater of the amount of…