Last month, the U.S. Equal Employment Opportunity Commission (EEOC) surprisingly announced that it was formally rescinding its longstanding “Policy Statement on Mandatory Binding Arbitration of Employment Discrimination Disputes as a Condition of Employment,” which took the position that mandatory arbitration provisions between employers and employees were contrary to federal antidiscrimination laws.
Originally issued in July 1997, the EEOC’s policy statement expressed its position that mandatory arbitration agreements could have “chilling effects” on charge filing because employees (1) may not be aware of their right to nonetheless file an EEOC charge despite such an agreement; or (2) might otherwise be discouraged from coming to the EEOC when they know that they cannot litigate their claim outside of arbitration. The policy statement also identified overall concerns with arbitration, arguing that, by its nature, arbitration does not allow for development of case law, lacks certain constitutional and procedural safeguards afforded by the federal court system, and includes structural biases against discrimination plaintiffs.
Continue Reading EEOC rescinds longstanding policy statement on mandatory binding arbitration