Employment: Effect of Arbitration Clause on EEOC
Zuckerman, Susan C., Dispute Resolution Journal
The Supreme Court held, 6-3, that the Equal Employment Opportunity Commission is not precluded by an arbitration agreement between an employee and an employer from seeking to obtain victim-specific remedies in an enforcement action in court. The decision resolved a split in the circuits and reversed the 4th Circuit's ruling that a mandatory arbitration agreement limited the EEOC's remedies to seeking injunctive relief.
The Supreme Court relied on statutory authority allowing the EEOC to employ its enforcement powers, remedies and procedures to carry out the ADA's prohibition on discrimination based on a disability. Amendments to Title VII unambiguously authorized the EEOC to obtain compensatory and punitive damages from an employer it proves engaged in unlawful employment practices. Nothing in these statutes or case law materially changed the EEOC's statutory function or the remedies otherwise available. The Federal Arbitration Act only ensures the enforceability of private agreements to arbitrate but does not otherwise purport to restrict the choice of forum of a nonparty to an arbitration agreement.
The 4th Circuit's decision was based on an analysis of the competing policies underlying the ADA and the FAA. …