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Does A Mandatory Arbitration Clause Mean You Can't Go To The EEOC?

Since 1997, the Equal Employment Opportunity Commission has had a policy against employers using mandatory arbitration clauses and agreements in employment contracts. It was the position of the EEOC that requiring employees to arbitrate any disputes with their employers would not be in the public interest if it bypassed the agency's enforcement of discrimination and harassment claims.

The agency said that requiring mandatory arbitration as a condition of employment could "harm both the individual civil rights claimant and the public interest in eradicating discrimination."

Especially in light of the #MeToo movement, many people feared that requiring people to arbitrate their disputes would prevent the details from becoming part of the public record. That could mean bad actors would be shielded from public scrutiny of their actions. Proponents argue that arbitration is faster and less expensive than courtroom litigation.

The Supreme Court weighs in

In the meantime, however, the U.S. Supreme Court has issued some important rulings on the subject. In 1991, for example, the high court clarified that the fact that an employee has a mandatory arbitration agreement does not bar the employee from filing a complaint with the EEOC. So, it's already clear that you can go to the EEOC with a discrimination or harassment claim even though you have signed a mandatory arbitration agreement.

In 2002, the Supreme Court made a corresponding ruling. It held that the EEOC was still able to enforce the law and provide relief to a specific victim even though that person had signed a mandatory arbitration agreement.

In other words, a mandatory arbitration clause or agreement does not prevent an employee from filing a charge with the EEOC. It also does not prevent the EEOC from taking action on the case.

That said, in 2018 the Supreme Court ruled that mandatory arbitration agreements in the employment law arena are enforceable under the Federal Arbitration Act. Presumably, this decision assumed that alleged victims would still have access to the EEOC. Moreover, some states have changed their laws to be more protective of employees. For example, in California, mandatory arbitration must offer the same remedies to victims as they would have in a court.

EEOC policy officially changes

With these rulings in mind, the EEOC recently decided to withdraw its policy document on the subject. The policy document was never legally binding but was meant to provide guidance to stakeholders and the courts. However, the withdrawal of the document likely won't change much, as these Supreme Court rulings changed many of the underlying assumptions and the document was considered somewhat outdated.

If you have questions about your mandatory arbitration agreement, talk to an experienced employment law attorney.

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