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EEOC Changes Stance on Mandatory Arbitration of Discrimination Claims

OutSolve

Two of the three commissioners voted to rescind 1997 EEOC policy opposing mandatory arbitration agreements

Mandatory arbitration as an employment condition continues to be in a state of flux. Some states have passed laws prohibiting mandatory arbitration for employment discrimination claims; however, some federal judges have struck down state-law bans on mandatory arbitration.

On December 16, 2109, EEOC rescinded its 1997 policy opposing mandatory arbitration for employment discrimination claims. In its 1997 policy statement, EEOC said that using agreements on mandatory arbitration as a condition of employment could “hurt both the individual civil rights claimant and the public interest in eradicating discrimination.”

To support its decision, EEOC pointed to a list of Supreme Court rulings endorsing the use of arbitration agreements, including in the employment context. The rulings held that arbitration agreements requiring employees to resolve discrimination claims in arbitration are enforceable under the Federal Arbitration Act. This includes a 2002 decision that held that an arbitration agreement doesn’t bar the EEOC from pursuing cases on behalf of claimants of discrimination.

EEOC also stated “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.”

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