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Does the EEOC Enforce Binding Arbitration Clauses?


The EEOC Will Enforce a Your Company’s Binding Arbitration Clause and Still Keep the Right to Sue on Your Behalf.

The Equal Employment Opportunity Commission (EEOC) will uphold mandatory binding arbitration policies outlined in employment contracts. However, the EEOC may still have the right to file a lawsuit on behalf of an employee. When your company includes a mandatory binding arbitration clause, make sure you work with a dedicated discrimination or sexual harassment lawyer to help you through the process.

It is not unusual for a company employment contract to include a mandatory binding arbitration clause. This mandatory arbitration is a legal proceeding that determines the outcome of any claim against your employer. You should have an attorney by your side to help you through the process and advocate for your rights. The discrimination and sexual harassment lawyers at the Derek Smith Law Group in New York City, Philadelphia, Miami, Los Angeles, and New Jersey can help protect your rights during your arbitration proceeding.

What Is a Mandatory Binding Arbitration Clause?

A mandatory binding arbitration clause is a common provision within many contracts. In employment contracts, an employer may include the clause to address employment discrimination, sexual harassment, retaliation, wrongful termination, and wage and hour issues that may occur in the workplace. The clause prohibits employees from filing a lawsuit against their employer.

Instead, they must attend an arbitration to settle their dispute. The results of the arbitration are binding in any court of law.

Mandatory Binding Arbitration Restrictions

Mandatory binding arbitration includes several restrictions.

  • It removes the opportunity for a trial.
  • It limits compensation to the terms within the contract.
  • It illuminates the right to an appeal.

If the arbitration hearing seems unfair or biased, you are stuck with the arbitrator’s decision.

Can You File a Lawsuit Against Your Employer If Your Contract Includes a Binding Arbitration Clause?

A binding arbitration clause in an employment contract illuminates the right for you to file a lawsuit against your employer. The EEOC has determined it will uphold an employer’s contractual binding arbitration clause. However, you may still file a charge with the EEOC. If the EEOC finds that the employer committed a horrific act of discrimination or sexual harassment, it may file a lawsuit against the employer on your behalf.

Consult with an experienced EEOC representation attorney about your rights if the EEOC files a lawsuit against your employer on your behalf.

What Are Examples of Horrific Acts of Discrimination or Sexual Harassment?

The EEOC reserves the right to sue your employer on your behalf, even if you must go through binding arbitration. Some examples of events that would lead to the EEOC lawsuit may include:

  1. Your employer sexually assaults you in the ladies’ room. She follows you into the bathroom after making sexually inappropriate comments towards you for days. She then corners you in the restroom and sexually assaults you.
  2. Your coworker calls you the “N” word daily. When you speak up and tell him to stop, he punches you and tells you, “there’s more where that came from.” You report the incident to your boss. You get fried from work for starting a problem.

Did the EEOC Ever Refuse to Uphold Binding Arbitration Agreements?

In July 1997, the EEOC adopted a policy statement known as the Policy Statement on Mandatory Binding Arbitration of Employment Discrimination Disputes as a Condition of Employment. At the time, the EEOC made it clear the mandatory binding arbitration clauses went directly against an employee’s right to justice.

When Did the EEOC Reverse Their Stance on Mandatory Binding Arbitration?

The Supreme Court immediately heard numerous cases against the EEOC’s policy in which they decided in favor of the employer. In each case, the employer had a mandatory binding arbitration clause in the employment contract. Each time the Supreme Court determined the clause was valid and the arbitration was enforceable.

As of December 17, 2019, the EEOC withdrew the policy statement. The EEOC will no longer override the mandatory binding arbitration clause in a contract.

What Does Rescinding This Policy Statement Mean for Employees?

The EEOC is no longer overriding mandatory binding arbitration clauses as a matter of policy. An employer who includes a mandatory binding arbitration clause in a contract can enforce the clause. As a result, employers can mitigate damages that may occur as the result of an EEOC charge and potential lawsuit.

Will the EEOC Still Investigate Your Claim Even if You Have a Mandatory Binding Arbitration Clause?

The EEOC may still choose to investigate your discrimination or sexual harassment claim. It can file a lawsuit on your behalf against your employer. Rescinding the law does not mean that the EEOC or other legal entities cannot challenge the ability to enforce each agreement as written.

Are Mandatory Binding Arbitration Clauses Always Enforceable?

A mandatory binding arbitration agreement may prohibit you from trying a case in federal court. However, it may not be enforceable. The clause must clearly state that you no longer have a right to seek remedies from the court. If it is not enforceable, you may proceed with your EEOC charge for discrimination or sexual harassment and a lawsuit in federal court.

Consult an employment contract attorney to determine if the mandatory binding arbitration clause is enforceable.

When Should I Contact an Employment Attorney?

As the victim of employment discrimination or sexual harassment, you have the right to justice and compensation. Mandatory binding arbitration does not prohibit you from having proper representation. Without such representation, you may give up your rights much too soon in the process.

Contact an employment lawyer as soon as you experience any form of workplace discrimination, sexual harassment, retaliation, or get fired from work. They can review your contract to verify your mandatory arbitration clause. They can also help you file your EEOC charge and advise you throughout the arbitration and EEOC processes.

Call Our EEOC Representation Lawyers for Your Free Consultation.

Do not blindly file your EEOC charge or enter an arbitration hearing. You deserve an attorney who will advocate for your rights and advise you appropriately along the way. If you are the victim of workplace discrimination or harassment, the employment discrimination and sexual harassment attorneys at the Derek Smith Law Group can help.

Do You Have a Mandatory Binding Arbitration Clause in Your Employment Contract? Please Call Us at 800.807.2209 to Learn More About Your Rights when Facing Arbitration.

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