Academic journal article Northwestern University Law Review

Is It a Bargain or a Steal? a Comment on Mccaskill and the Seventh Circuit's Treatment of Arbitration Clauses Waiving an Employee's Title VII Right to Attorney's Fees

Academic journal article Northwestern University Law Review

Is It a Bargain or a Steal? a Comment on Mccaskill and the Seventh Circuit's Treatment of Arbitration Clauses Waiving an Employee's Title VII Right to Attorney's Fees

Article excerpt

I. INTRODUCTION

When was the last time you read the fine print in your employee manual? Hidden among its endless provisions for sick leave, lunch breaks, and yes, even law firm partnership1 may be an arbitration clause. Maybe you noticed the arbitration clause and raised your objection-only to be told that acceptance of the arbitration provision was a condition of your hire or continued employment. Emboldened by numerous recent opinions enforcing these arbitration clauses, employers have begun to push arbitration clauses to further limit their liability under Title VII and other statutes. Consider the evolution of provisions in arbitration clauses for the award of attorney's fees to the prevailing plaintiff in claims arising under Title VII.

1. [Silence].2

2. Attorney's fees will be awarded3 in the case that "either party to the arbitration asserts a claim position, or defense which is not substantially justified by the law or facts."4

3. Each party shall pay its own costs and expenses, including attorney's fees related to such arbitration, regardless of the outcome of the arbitration?

4. The employee initiating the action in arbitration shall pay all parties' costs and expenses, including but not limited to attorney's fees and arbitration costs, regardless of the outcome of the arbitration.6

Compare these clauses to section 706(k) of Title VII:

In any action or proceeding under this title the court, in its discretion, may allow the prevailing party, other than the Commission or the United States, a reasonable attorney's fee as part of the costs, and the Commission and the United States shall be liable for costs the same as a private person.7

This Comment surveys the landscape of arbitration clauses governing the award of statutorily-provided attorney's fees and then focuses on the Seventh Circuit, where the court continues to grapple with these issues. Part II documents the McCaskill decisions and the Seventh Circuit's subsequent retreat from its original declaration on the attorney's fees issue. Part III first outlines the evolution of arbitration of statutory rights and then discusses how this has borne out in the debate over arbitration fees. Finally, Part IV analyzes how these two debates have colored the current treatment of arbitration clauses that purport to limit or waive the right to statutorily-provided attorney's fees.

Two very different perspectives have emerged from the debate over McCaskill, The first, which I will call the "freely-bargained for" viewpoint, regards statutory rights as a sort of fungible bargaining tool. The second perspective, "forced-surrender," views them as virtually inalienable rights. Part V of the Comment attempts to construct the framework within which these arguments are made and deconstruct them for a closer analysis.

II. MCCASKILL I AND II8

Gloria McCaskill, an African-American woman, was hired by SCI Management Corporation ("SCI") as a sales counselor in 1996.9 After employing McCaskill for one year,10 SCI presented her with an agreement for "Principles of Employment," which McCaskill signed." The Agreement contained a mandatory arbitration provision stating:

1. Matters Subject to Arbitration

Employee and the Company agree that, except for the matters identified in Section 2 below, all disputes relating to any aspect of Employee's employment with the Company shall be resolved by binding arbitration. This includes, but is not limited to, any claims against the Company, its affiliates or their respective officers, directors, employees, or agents for breach of contract, wrongful discharge, discrimination, harassment, defamation, misrepresentation, and emotional distress, as well as any disputes pertaining to the meaning or effect of this Agreement. The arbitration shall be conducted in accordance with the procedures attached hereto as Exhibit "A." This agreement to arbitrate shall cover disputes arising both before and after the execution of this document, except to the extent that any litigation has already been filed as to the date hereof. …

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