Finally, the EEOC has come around on arbitration agreements as a condition of employment


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And it only took 22 years.

Back in 1997, Puff Daddy — he was Puff Daddy back then — was burning up the charts with his Biggie Smalls tribute, I’ll Be Missing You (feat. Faith Evans and 112). Meanwhile, the U.S. Equal Employment Opportunity Commission released this Policy Statement in which it posited that “agreements that mandate binding arbitration of discrimination claims as a condition of employment are contrary to the fundamental  principles evinced in [the federal anti-discrimination laws it enforces.]”

Now, here we are near the end of 2019. In that time, Puff Daddy became P. Diddy, then Puffy, then Diddy. Maybe, he’s Sean Combs again. I’m not sure. It’s to keep up with these things.

And finally, the EEOC has changed its position on arbitration agreements as a condition of employment.

On Tuesday, Dave Simpson for Law360 reported (here) that the EEOC had retracted its 1997 Policy Statement. Sure enough, if you head over to the EEOC’s webpage, “What You Should Know about the EEOC and Ensuring Clear and Accurate Guidance”, and scroll down the page a bit, there it is:

  • Policy Statement on Mandatory Binding Arbitration of Employment Discrimination Disputes as a Condition of Employment. Since its issuance, the Supreme Court has ruled that agreements to arbitrate employment-related disputes are enforceable under the Federal Arbitration Act (FAA) for disputes between employers and employees. Circuit City Stores v. Adams, 532 U.S. 105 (2001). However, in 2002, the Supreme Court further held that an arbitration agreement between an employer and employee does not bar the EEOC from pursuing victim-specific relief in litigation on behalf of an employee who files a timely charge of discrimination. EEOC v. Waffle House, Inc., 534 U.S. 279 (2002). Because of the Supreme Court’s rulings, discussed in more depth here, the Commission rescinds the 1997 Policy Statement. Nothing in this rescission should be construed to limit the ability of the Commission or any other party to challenge the enforceability of a particular arbitration agreement.

What does this mean for you? Not a heckuva lot. If you require individuals to sign arbitration agreements as a condition of employment, you can continue to do so — at least under federal law. Some states  **cough** California **cough** have their own rules. So, your mileage may vary at the state or local level.

Another alternative is an agreement in which the employees waive the right to a jury trial for subsequent employment claims. I like jury waivers. But, once again, your mileage may vary at the state and local level. New Jersey, I’m looking at you now.

I guess what I’m really saying is have a good employment lawyer on speed dial before your employees sign a document that impacts their ability to pursue discrimination claims against your business.



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