Labor & Employment Law Daily EEOC does an about-face on mandatory arbitration
Friday, December 20, 2019

EEOC does an about-face on mandatory arbitration

By Pamela Wolf, J.D.

Rescinding earlier guidance, the Commission cites Supreme Court decisions that conflict with its 1997 Policy Statement disfavoring mandatory arbitration.

The EEOC has rescinded its 1997 “Policy Statement on Mandatory Binding Arbitration of Employment Discrimination Disputes as a Condition of Employment,” in which the Commission took the position that agreements mandating binding arbitration of discrimination claims as a condition of employment “are contrary to the fundamental principles evinced” in the employment discrimination laws that the agency enforces.

Conflict with Supreme Court rulings. In a statement posted on its website, the Republican-majority Commission noted that since the issuance of the 1997 Policy Statement, the Supreme Court has ruled that agreements to arbitrate employment-related disputes are enforceable under the Federal Arbitration Act for disputes between employers and employees. The Commission also said that in in other arbitration-related cases decided since 1997, the High Court has rejected concerns about using arbitral forum within and outside the context of employment discrimination claims. These decisions conflict with the 1997 Policy Statement, according to the Commission.

Can still file EEOC charges. The Commission also pointed out that mandatory arbitration does not foreclose an employee’s right to file an EEOC charge: “Case law also now makes clear that the EEOC continues to be fully available to employees as an avenue to assert EEO rights and to investigate in the public interest, regardless of whether the parties have entered into an enforceable arbitration agreement.”

Rescission necessary. After listing the particular Supreme Court decisions both inside and outside the employment landscape that the Commission sees as conflicting with the 1997 Policy Statement, the Commission concluded that its earlier arbitration policy “does not reflect current law, is rescinded, and should not be relied upon by EEOC staff in investigations or litigation.”

But has that much changed? At the time it issued its earlier guidance, the Commission made some statements that are arguably still true today. In its 1997 Policy Statement, the Commission said: “The private right of access to the judicial forum to adjudicate claims is an essential part of the statutory enforcement scheme. The courts cannot fulfill their enforcement role if individuals do not have access to the judicial forum.”

The Commission also said, “The private arbitral system differs in critical ways from the public judicial forum and, when imposed as a condition of employment, it is structurally biased against applicants and employees.”

Lawyers’ Committee reacts. The Lawyers’ Committee for Civil Rights Under Law quickly registered its opposition to the Commission’s reversal of its longstanding mandatory arbitration policy. “Today, close to 60 percent of Black workers, who are over-represented in low-wage jobs and more likely to experience employment discrimination and harassment, are subject to forced arbitration,” said Dariely Rodriguez, Director of the Economic Justice Project at the Lawyers’ Committee. “Workers who have experienced discrimination deserve their day in court, and businesses that violate the law must be held accountable. The EEOC is charged with protecting the rights of workers and enforcing our country’s federal employment discrimination laws. By abandoning its important policy position opposing mandatory arbitration, the EEOC is giving businesses a license to prioritize corporate interests over the interests of workers.”

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