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How do arbitration agreements and the EEOC process work together?

Introduction

Many employers attempt to avoid the courtroom when it comes to dealing with employment related litigation. As such, many employers now require their employees to sign arbitration agreements at the time of hire. These arbitration agreements expressly waive both the employer and the employee’s rights to pursue claims in state and federal court. Oftentimes, this results in employees being prohibited from filing a lawsuit in court against their employer. Instead, the employer and employee agree to the arbitration process.

The arbitration process is essentially “court around the table,” which involves a neutral arbitrator, who acts as a judge. As in most lawsuits, the arbitration process allows for discovery, which includes written interrogatories, requests for production, and requests for admission, as well as depositions. However, the arbitrator governs the scope of discovery and can limit its use. Additionally, the employer will often set out the procedures for the arbitration process in the arbitration agreement itself, as specific contractual obligations. For example, the arbitration agreement might outline the scope of discovery and set specific limits on the number of discovery requests permitted or limit the number of depositions allowed.

Are arbitration agreements enforceable in discrimination cases?

Generally, yes. For a long time, courts did not enforce arbitration agreements, instead allowing employees to move forward with their claims in court. However, through the Federal Arbitration Act (“FAA”), courts now recognize and enforce binding arbitration agreements signed by employees. Notably, employees are still free to utilize the Equal Employment Opportunity Commission (“EEOC”) as a means to assert equal employment rights and to investigate the public interest.

The EEOC investigative process is an administrative requirement for many federal discrimination laws, which employees must go through prior to filing a lawsuit in federal court. Until the 1990s, it was unclear whether employees could still utilize the EEOC investigative process when there was an arbitration agreement. However, the United States Supreme Court (“Supreme Court”) clarified the issue in 1991, explaining that arbitration agreements do not preclude an individual’s right to file a Charge of Discrimination with the EEOC and to have the EEOC investigate that Charge.

In 2002, the Supreme Court held that the EEOC has the authority to bring forth a federal lawsuit on behalf of an employee who timely files a Charge of Discrimination, even when there is a binding arbitration agreement between the employee and the employer. The arbitration agreement is between the employee and employer, not the employer and EEOC. Therefore, the EEOC remains a viable means to have an employee’s potential employment issues investigated prior to beginning the arbitration process. If the EEOC determines that it wants to bring a lawsuit on behalf of the
employee, then the EEOC is not bound by the arbitration agreement.

If you feel your employment rights have been violated, or if you have any other questions regarding your employment rights, please contact the experienced Birmingham employment law attorneys at Wrady Michel & King. You can contact us either online or by calling us at (205) 319-9724. We are here to serve you.