EEOC wary of mandatory arbitration

The Equal Employment Op-portunity Commission continues to believe that mandatory arbitration clauses are illegal.

Bob Johnson, EEOC regional attorney in St. Louis, said that the Supreme Court decision on the case of Circuit City Stores Inc. vs. Adams is being widely misinterpreted as a go-ahead for expanded use of mandatory ar-bitration clauses in employment contracts.

The EEOC policy states that "agreements that mandate binding arbitration of discrimination claims as a condition of em-ployment are contrary to the fundamental principles evinced in (discrimination) laws."

The court "simply decided it's not impermissible a very limited ruling," Johnson said. "There is no prohibition against arbitration of employment matters because of the arbitration act."

The judicial language used by Circuit City is important: " ... arbitration agreements can be enforced under the (Federal Arbitration Act) without contravening the policies of congressional enactments giving em-ployees specific protection against discrimination prohibited by federal law," wrote Justice Anthony M. Kennedy.

In other words, the rights are still there; the forum for asserting them has changed from a courtroom with a judge and jury to a conference room with an arbitrator.

The attorneys general of 22 states filed amicus briefs in Circuit City because they feared the ruling would nullify state discrimination rights as well as the common law rights.

Tim O'Reilly, of O'Reilly & Jensen LLC, said that a mandatory arbitration clause "takes away huge important rights an employee has ... the right to have a trial by jury to enforce their employment discrimination statutory rights in federal court ... (rights) that come from the Civil Rights Act, the (Family Medical Leave Act), the Americans With Disabilities Acts ex-tremely important protective rights that the Congress felt were useful and gives all those powers to one arbitrator."

The EEOC has a case set to be heard in the high court next year against Waffle House Inc. that may determine its ability to continue to assert federal claims for employees despite the Circuit City case.

According to John Fultz, head of the alternative dispute resolution division in St. Louis, the EEOC is construing the Circuit City case very narrowly.

Its position has been that because the EEOC isn't a party to contracts with mandatory arbitration clauses in them, it is free to investigate complaints and file suit against employers.