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EEOC Rescinds Policy Against Binding Arbitration for Workers (1)

Dec. 17, 2019, 5:52 PMUpdated: Dec. 17, 2019, 8:38 PM

The EEOC voted 2-1 to rescind its position that mandatory arbitration agreements that keep workers’ discrimination claims out of court clash with the civil rights laws the agency enforces.

The Dec. 16 decision follows U.S. Supreme Court rulings in recent years that bolster such pacts. In a 1997 policy statement, the Equal Employment Opportunity Commission said using these agreements as a condition of employment could “harm both the individual civil rights claimant and the public interest in eradicating discrimination.”

The agency enforces laws that prohibit workplace discrimination based on race, sex, color, national origin, religion, disability, age, and genetic information. In the wake of the #MeToo movement, arbitration agreements and other contracts have been criticized by worker advocates as a way to allow persistent harassment to continue and keep disputes out of court.

Corporations frequently require workers to sign arbitration agreements, citing its speedier method of resolving workplace disputes. Their use has steadily increased since a series of Supreme Court cases dating back to the 1990s. More than half of workers are subject to binding arbitration, according to a 2018 study from the Economic Policy Institute.

The commission pointed to a long list of Supreme Court rulings that found agreements to arbitrate employment-related disputes enforceable under the Federal Arbitration Act. It notes a 2002 decision that held that an arbitration agreement doesn’t bar the EEOC from pursuing cases on behalf of employees who file charges of discrimination.

The agency said the 1997 policy statement “does not reflect current law,” and said it shouldn’t be relied upon by EEOC staff in investigations or litigation.

“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,” the commission said.

The commission’s two Republican members, Janet Dhillon and Victoria Lipnic, voted to rescind the guidance. Charlotte Burrows, the lone Democrat on the board, voted against the move. Two seats on the commission remain vacant.

“The public policy concerns outlined in the EEOC’s 1997 policy statement are equally relevant—if not more so—today,” Burrows said in a Dec. 17 statement. She said instead of updating the policy statement to reflect legal developments, the commission instead abandoned it altogether. “I’m disappointed that the Commission is rescinding our longstanding position, particularly given the Commission’s ongoing efforts to combat sexual and other forms of harassment in employment.”

(Updated with additional reporting.)

To contact the reporter on this story: Erin Mulvaney in Washington at emulvaney@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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