Wednesday, September 16, 2015

EEOC Seeks Carve-outs in Employment Arbitration Clauses

The Equal Employment Opportunity Commission (EEOC) processed nearly ninety thousand charges last year. Reportedly, the EEOC will not hesitate to take action against employers that prevent employees from filing EEOC claims, which includes mandatory arbitration agreements. Such agreements should contain a carve-­outs that expressly allow employees to file EEOC charges, as one franchisee of major restaurant chains in Florida recently learned. The company had a mandatory arbitration provision with no exception for the filing of administrative charges by employees with the EEOC. The EEOC sued, alleging such agreements constitute a pattern and practice of resistance to rights secured by Title VII of the 1964 Civil Rights Act. Thus far, a federal court ruled that the EEOC was authorized to file suit against employers in the absence of an underlying charge of discrimination. The court also ruled that the EEOC had standing to sue, itself, even if not a party to the arbitration agreement in question. In what was perhaps a subsequent remedial measure, the company already amended its agreements. Interestingly, the EEOC is on record in strong support of voluntary alternative dispute resolution programs that resolve employment discrimination disputes in a fair and credible manner, and are entered into after a dispute has arisen. It has even recognized that while even the best arbitral systems do not afford the benefits of the judicial system, well-designed ADR programs, including binding arbitration, can offer in particular cases other valuable benefits to civil rights claimants, such as relative savings in time and expense. However, it seems depriving employees of their right to file EEOC administrative charges will not be tolerated by the current EEOC, even if the employees will ultimately have to arbitrate their claims rather than litigate them in court. See more here-- and