Reason over Rhetoric: The Case for Enforcing Pre-Dispute Agreements to Arbitrate Employment Discrimination Claims

By: Craig Hanlon [1]

Volume 5.1

INTRODUCTION

In Equal Employment Opportunity Commission v. Waffle House, Inc. ,[2] the Supreme Court struck a violent blow against the fundamental principle of freedom to contract [3] and nullified the practical and positive effects of pre-dispute arbitration agreements as they govern employment-based discrimination claims.[4] Such agreements allow an employer and a prospective employee to agree, via a freely negotiated and voluntarily signed contract, that any employment related dispute will be settled through binding arbitration.[5] Astoundingly, the Supreme Court also managed to undermine the sanctity that is bestowed upon private agreements by ignoring the express expectations of the parties involved.[6] How did the Court accomplish such an outrageous result? The opinion was devoid of logic and reason, not to mention common sense and proper public policy. Regrettably, the Court fell victim to the fancy footwork of irrational and illogical arguments and failed to adhere to a straightforward, albeit technical analysis of the issue.[7] Instead of meticulously and methodically analyzing the issues, the Court conducted a cursory review of the relevant federal statutes[8] and made simple-minded and conclusory statements.[9] The Court also undermined the value of previous decisions regarding the validity of arbitration agreements[10] and their applicability to statutory claims in the employment context [11] as governed by the Federal Arbitration Act.[12] Moreover, the Court ignored the glut of evidence suggesting that such pre-dispute arbitration agreements are in practice more helpful to employees than some suggest,[13] and create circumstances in which aggrieved employees retain a better chance of obtaining the best possible reward at the lowest possible cost. Finally, by intruding into what is arguably Congress’ territory, the Court created a monster that will destroy all hope for the very class of people for whom the decision was ostensibly intended to benefit.

Part I of this article will briefly outline the relevant federal statutes to provide the necessary foundation for understanding the issue involved in Waffle House Specifically, this paper will discuss Title VII of the Civil Rights Act of 1964 (“Title VII”), the Equal Employment Opportunity Act of 1972 (“EEOC Act”), the Civil Rights Act of 1991 (“1991 Act”), the Federal Arbitration Act (“FAA”), and the Americans with Disabilities Act (“ ADA ”). Part II will examine the development of the relevant case law that set the parameters for the current debate, including the conflicting decisions in three Courts of Appeals cases that prompted Supreme Court review. Part III will critique the Court’s opinion in Waffle House by exposing the holes in the Court’s reasoning and will propose an alternative model for analyzing the issue raised in Waffle House . Part IV will discuss the arguments that are advanced both in support of and against pre-dispute arbitration agreements. Finally, Part V will offer a proposal, suggesting that Congress should act immediately to reach a more practical solution, one that would redefine the Equal Employment Opportunity Commission’s (“EEOC’s”) role and power in the context of such “mandatory,” pre-dispute arbitration agreements.

 I. STATUTORY HISTORY

A. Title VII of the Civil Rights Act of 1964

Congress enacted Title VII of the Civil Rights Act of 1964 (“1964 Act”) for the primary purpose of eliminating workplace discrimination. A major accomplishment of the 1964 Act was the creation of the EEOC. When defining the role and power of the EEOC, Congress explained that the agency would devote its powers primarily to investigating and informally resolving claims. If the EEOC was unable to solve a dispute between an employer and an aggrieved employee through informal methods of conciliation, the individual employee would then be left to pursue a claim alone. Thus, the EEOC was born as an investigative government agency vested with the responsibility of eradicating employment discrimination, yet was devoid of any real powers of enforcement.

 B. The Equal Employment Opportunity Act of 1972

The 1964 Act has undergone several amendments in the years since its inception. The amendments were made with the purpose of strengthening the existing protection of individual civil rights by developing greater, more realistic enforcement measures. Most significantly, in 1972, in the face of swirling criticism that the EEOC amounted to nothing more than a “toothless tiger,” and realizing that the status quo was insufficient, Congress enacted the Equal Employment Opportunity Act. The EEOC Act was the first step that Congress took in expanding the EEOC’s enforcement powers. This act gave the EEOC the power to pursue employment discrimination claims in federal court. Under the EEOC Act, an aggrieved employee would initiate an employment discrimination action with the EEOC by filing a charge, whereupon the EEOC would take exclusive jurisdiction over the claim. But, the EEOC only retained jurisdiction over the employee’s claim for a period of one hundred and eighty days. After this period of time, the EEOC was then required to either take action, or issue a “right to sue letter.” With a right to sue letter in hand, the individual employee now became personally responsible for pursuing his claim without further assistance from the EEOC.

C. The Civil Rights Act of 1991

The 1991 Act expanded the remedies available to plaintiffs pursuing claims under federal anti-discrimination statutes. Prior to the 1991 Act, claimants were limited in their range of remedies. They were limited to pursuing only backpay and equitable relief, limited in the forum in which they could pursue such remedies, and their claims were settled through a bench trial. The 1991 Act gave the EEOC the flexibility to choose which remedies it would pursue.Congress believed that by expanding the remedies available to plaintiffs, the laws would not only be better situated to compensate discrimination victims, but would also finally live up to their purpose of eliminating workplace discrimination by deterring employees from discriminating.

The 1991 Act also formally recognized the use of alternative dispute resolution methods, including arbitration, to resolve disputes that arose under the federal anti-discrimination statutes. Therefore, while the 1991 Act indicated an attempt to strengthen the EEOC’s enforcement powers, on the other hand it signified that Congress recognized the benefits to be gained from using alternative dispute resolution methods, such as arbitration, to settle claims arising under the statute. And, as the case law analysis will show, the Court soon recognized that, while it would be improper to compromise the substantive rights afforded by the Civil Rights Acts, it would be beneficial to change the forum in which these rights were pursued.

 D. The Federal Arbitration Act

Congress enacted the Federal Arbitration Act in 1925 so that the courts would recognize and honor arbitration agreements, and hold them as equally enforceable as contracts. Additionally, Congress intended to alleviate the costs and delays brought upon by litigation. Until the FAA codified the validity of arbitration agreements, courts refused to enforce such agreements on the ground that this would have the effect of usurping the jurisdiction of the courts. But the question of whether the FAA applied to arbitration agreements embedded in employment contracts would remain in dispute. In recent years, however, the Supreme Court has confirmed the FAA’s applicability to employment contracts, and has reaffirmed the nation’s federal policy in favor of arbitration. This trend has solidified the claim that arbitration is a fair and efficient forum for settling disputes, even as it covers employment-related discrimination claims.

E. The Americans with Disabilities Act

The Americans with Disabilities Act (“ ADA ”), passed in 1991, intended to broaden the class of people for whom federal anti-discrimination laws would apply. Congress took this opportunity to expressly authorize the use of alternative dispute resolution processes for settling claims arising under federal anti-discrimination statutes. Thus, the case for using arbitration agreements regarding claims arising under the ADA was significantly strengthened by such explicit Congressional language in the text of the statute. Statutory claims arising under the Age Discrimination in Employment Act (“ADEA”) are subject to arbitration agreement clauses in employment contracts where Congress has not expressly indicated that they wish to restrict the settlement of these claims solely to a judicial forum. Thus, it follows, when Congress does expressly encourage the use of arbitration to settle a statutory claim arising under the ADA by indicating such in the text of the statute, such arbitration agreements must be upheld. Unfortunately, it seems that the courts are reluctant to follow this simple logic.

I. CASE LAW DEVELOPMENTS AND THE CIRCUIT SPLIT THAT LED TO WAFFLE HOUSE

A. Alexander v. Gardner-Denver Co.

Alexander v. Gardner-Denver Co. was the Supreme Court’s first bite at the pre-dispute arbitration agreement apple. In Alexander , the Court had to determine whether an employee had waived his right to sue in federal court under Title VII when the employee was a beneficiary of a collective bargaining agreement that required mandatory arbitration of all employment disputes. A critical fact in Alexander was that the dispute had been submitted to arbitration and was successfully settled in favor of the employee. The Court held that Mr. Alexander did not waive his right to have his Title VII claim heard in court simply because he submitted to a contractually mandated arbitration proceeding and felt that allowing an individual to waive his or her Title VII rights via a collective bargaining agreement would undermine all that Congress had intended to protect when they enacted Title VII. The Court determined that the arbitral forum would not be sufficient for deciding Title VII disputes primarily because of the limited discovery and fact-finding procedures used in arbitration. Finally, the Court rejected Gardner-Denver’s contention that allowing employees to relitigate discrimination claims previously decided in arbitration, while at the same time binding the employers by the arbitral decisions, would be unfair. The first blow had been struck and it seemed as if it might have been a knockout against arbitration.

B. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.

Mitsubishi Motors represented a significant turning point in the Court’s jurisprudence regarding pre-dispute arbitration agreements. In Mitsubishi , the Court ordered enforcement of a private arbitration agreement between two parties and announced it was no longer skeptical of the arbitral forum.The Court clearly articulated a powerful point: by voluntarily entering into an arbitration agreement, the party is by no means waiving any substantive rights , but rather, they are simply agreeing to a specified forum in which their substantive rights will be settled. Additionally, the Court announced that it would uphold arbitration agreements unless it was clear that Congress’ intent was to preclude a waiver of judicial remedies for the statutory rights at issue. The Court had succeeded in resuscitating pre-dispute arbitration agreements by focusing on the strong federal policy in favor of arbitration.

C. Gilmer v. Interstate Johnson Lane Corp.

In Gilmer , the Court addressed the question of whether a claim arising under the FAA could be subject to arbitration pursuant to an agreement embedded in a securities registration application. The Supreme Court affirmed a decision of the Court of Appeals for the Fourth Circuit, holding that a claim under the ADEA could be subjected to binding arbitration. The Court pointed out that even in its recent amendments to the ADEA, Congress did not explicitlypreclude arbitration or other nonjudicial resolution of claims and rejected Gilmer’s contention that arbitration is improper because it deprives him of the judicial forum provided for by the statute. The Court then proceeded to review the relevant statutory language of the FAA and its applicability in this case,and reached its conclusion based on the strong federal policy in favor of arbitration, emphasizing that an employee’s statutory Title VII rights do not pre-empt the arbitration agreement. Instinctively, the Court also rejected the arguments that are usually offered up in objection to the use of arbitration as a forum for solving employment discrimination claims. By defending the arbitration process and its innate ability to handle statutory claims that carry with it significant public policy implications, the Court foreshadowed its position in the next major case involving arbitration agreements and their applicability to employment contracts.

D. Circuit City Stores, Inc. v. Adams

The Court in Circuit City extended its blessings to the use of arbitration agreements and finally laid down the law on the applicability of the FAA to employment contracts. The precise issue that faced the Court in Circuit Citywas whether the exemption clause in Section 1 of the FAA exempted only employment contracts of transportation workers, rather than all employment contracts. Although the Court faced a seemingly obscure technical issue of statutory interpretation, it was an issue of extreme practical significance. The Court reversed the Court of Appeals for the Ninth Circuit and held that the Section 1 exemption is confined to transportation workers. The Court unequivocally confirmed their approval of arbitration agreements in the employment context by announcing, “we have been clear in rejecting the supposition that the advantages of the arbitration process somehow disappear when transferred to the employment context.”

E. The Circuit Split

1.  Equal Employment Opportunity Commission v. Frank’s Nursery & Crafts, Inc.

In Frank’s Nursery , the Court of Appeals for the Sixth Circuit reversed a district court, which had dismissed the EEOC’s claims brought on behalf of an individual employee and a class of similarly situated employees, and compelled the individual employee to arbitrate its claim pursuant to the agreement. The district court set forth three grounds for its decision: 1) the agreement was enforceable in light of Gilmer , 2) the EEOC was bound by Adams’ arbitration agreement, and 3) while it is acknowledged that as a general principle the EEOC can sue for injunctive relief on behalf of a class of individuals, the EEOC could not do so here because there was not a class of individuals that had suffered discrimination on the basis of race. The EEOC challenged only two of those conclusions on appeal. Specifically, the EEOC claimed that the district court erred in holding that the arbitration agreement precluded the EEOC from pursuing substantive relief on behalf of the employee, and that the district court erred by preventing the EEOC from recovering general injunctive relief on the ground that the EEOC had failed to identify a class of individuals.

The Court of Appeals for the Sixth Circuit disagreed, citing “the plain language of Title VII and the unequivocal intent of Congress that the EEOC should possess an independent right to eradicate employment discrimination on behalf of the public interest.” The Sixth Circuit was concerned that, by signing an arbitration agreement with their employer prior to starting their job, employees could determine whether and when the EEOC would be able to “protect the public interest.” In the Sixth Circuit’s mind, this would undermine the Congressional mandate for the EEOC to “represent an interest broader than that of a particular individual when it exercises its authority to sue.”

The Sixth Circuit spent considerable effort distinguishing between the EEOC and Adams as parties to the action. For example, the Sixth Circuit addressed the issue of whether the FAA was applicable and concluded that, because the district court had ordered the employee to arbitrate and not the EEOC, the FAA was in applicable. Since Adams had never personally initiated a lawsuit, and had not yet initiated any arbitration action, the court concluded that Adams had not breached any part of her arbitration agreement. With respect to principles of preclusion and waiver, the Sixth Circuit held that preclusion principles cannot apply since Adams and the EEOC were not in privity and did not possess identical causes of action or interests. The Sixth Circuit further explained that an employee cannot prevent the EEOC from suing by waiving his right to sue under Title VII. Ultimately, the Sixth Circuit granted the EEOC the authority to do as it pleased, notwithstanding an express agreement between the parties.

2. Equal Employment Opportunity Commission v. Kidder, Peabody & Co.

In Kidder, Peabody , the Court of Appeals for the Second Circuit affirmed the decision of the district court below and dismissed the EEOC’s action against defendant Kidder, Peabody. The district court had dismissed the EEOC’s action on the ground that the EEOC was barred from seeking monetary damages because the individuals on whose behalf they were suing had agreed with the defendant employer to submit all claims arising from their employment to binding arbitration. Mimicking the route taken by the district court, the Second Circuit began with an analysis of the Gilmer decision. The Second Circuit recognized the widespread support among circuit courts, both before and after Gilmer , that the EEOC may not seek monetary relief on behalf of an employee who had waived, settled or previously litigated their claim.

Next the Second Circuit cited the Third Circuit case of Equal Employment Opportunity Commission v. United States Steel Corp ., to support its conclusion that while the EEOC may not seek monetary remedies on behalf of an individual who had agreed to arbitrate his employment related claims, it may still pursue injunctive relief. The Second Circuit emphasized the point that, although they were precluding the EEOC from pursuing monetary damages on behalf of the employee in federal court, the employee was not left without a remedy; employees could still pursue the same substantive relief and obtain the same monetary award through arbitration. Additionally, the Second Circuit said that the EEOC would still be allowed to serve its role in protecting the public interest by pursuing injunctive relief. Ultimately, the Second Circuit attempted to strike the right balance between the public’s interest in upholding the EEOC’s mandate to eradicate employment discrimination, and the competing public interest in encouraging arbitration.

3. Equal Employment Opportunity Commission v. Waffle House, Inc.

The Court of Appeals for the Fourth Circuit followed the approach taken by the Second Circuit and precluded the EEOC from suing in court to obtain victim-specific relief on behalf of an employee when that employee had already agreed to settle any dispute that may arise concerning his employment through binding arbitration. The Supreme Court in Waffle House however, expressed an even more sympathetic attitude toward the national policy favoring arbitration. There, the Court was faced with an additional obstacle because the district court found that there was no enforceable arbitration agreement. Once the Court disposed of that issue, it discussed the powers of the EEOC and emphasized its mandate to enforce antidiscriminatory employment laws. However, the Court still found that the EEOC’s “role in vindicating in federal court the individual interests of the charging party implicates the competing federal policy favoring the enforcement of arbitration agreements.”

The Supreme Court recognized that the Fourth Circuit left the door open when it proclaimed that “it should be remembered that arbitration agreements will not preclude the EEOC from bringing actions seeking class wide and equitable relief,” and that also in Gilmer , the Supreme Court may have implicitly recognized that the EEOC was not bound by private arbitration agreements when acting in its public role.

III. ILLOGICAL AND INCOMPLETE: THE SUPREME COURT’S REASONING IN WAFFLE HOUSE, EXPOSED

A. Critique of the Court’s Analysis

The Supreme Court began its analysis by looking at the provisions of Title VII, which define the EEOC’s authority. As it documented the history of Title VII, its amendments, and how Congress expanded the powers of the EEOC from merely an investigative and conciliatory agency to one empowered to bring its own enforcement actions, the Court pointed out that arbitration proceedings had not yet been mentioned in the statutes. Without any further analysis, the Court concluded that, “these statutes unambiguously authorize the EEOC to obtain the relief that it seeks in its complaint if it can prove its case against respondent” (emphasis added). If the issue had been “unambiguously ” decided by the statutes and amendments that created the EEOC, it is unlikely that this case would have reached the Supreme Court. This was the first example of the Court’s inability to foster a complete and logical analysis of the issue, and of its proclivity for using unsubstantiated and conclusory statements to sidestep a straightforward confrontation with the technical issues with which it was presented.

Next, the Court attempted to use two cases, decided under entirely different circumstances than those with which it was presented in Waffle House , to support its conclusion. In the first case, Occidental Life Ins. Co. of Cal. v. Equal Employment Opportunity Commission the Court claimed that the EEOC “does not function simply as a vehicle for conducting litigation on behalf of private parties.” To say so, the Court explained, would undermine “the agency’s independent statutory responsibility to investigate and conciliate claims by subjecting the EEOC to inconsistent limitations periods.”The Court’s reasoning does not make sense. How does preventing the EEOC from suing in court on the ground that they are a vehicle for conducting litigation on behalf of a private party in any way undermine their ability to investigate and conciliate claims? Quite the contrary, barring the EEOC from suing after the statute of limitations governing the employee’s individual right to sue has expired should enhance the agency’s ability to investigate and conciliate claims by creating an incentive for the EEOC to work harder and faster at investigating and conciliating the claim. Furthermore, that the Court extracted such language from a case dealing with whether the EEOC’s claim was time-barred under California ‘s one-year statute of limitations is evidence that the Court struggled to find support for its position. Occidentaland Waffle House bear no similarities other than the appearance of EEOC as a party in both cases.

The other case that the Court used as a “backdrop” to its analysis, General Telephone Co. of Northwest v. Equal Employment Opportunity Commission,dealt with whether the EEOC was required to comply with Rule 23 of the Federal Rules of Civil Procedure when it brought a discrimination claim on behalf of multiple employees. The Court stated in General Telephone that, “the EEOC is not merely a proxy for the victims of discrimination and that [its] enforcement suits should not be considered representative actions subject to Rule 23.” Apparently, the Court attempted to reason that, since the EEOC has the independent statutory authority to sue, then in no way does it derive any authority, any rights, or any limitations from the employee on whose behalf it is suing. However, in this case, as well as the previous case, the facts failed to lend any support to the Court’s position. The issue in General Telephone was couched in terms of a class action suit pursuant to Rule 23, which is a highly unique and specific form of litigation that provides virtually no basis for drawing an analogy outside its distinctive parameters.

Next, the Court spelled out the relevant provisions of the FAA and several recent cases dealing with the statute. The discussion was clear and, for once, logical, since it pointed to the “liberal federal policy favoring arbitration agreements,” and analyzed the situations under which the FAA provided for stays of proceedings and compulsion of arbitration. However, the Court announced that the FAA “ensures the enforceability of private arbitration agreements, but otherwise does not purport to place any restriction on a nonparty’s choice of a judicial forum.” On its face, this might not seem like such a serious setback. Yet, a closer analysis reveals fatal qualities. The Court was apprehensive about allowing a private agreement between two parties to bind someone who was not privy to the agreement.

Their argument was a two-step process: first they argued that even if the agreement is binding upon the individual, it was not binding upon the EEOC because the EEOC had the independent statutory authority to sue, and it was not a proxy or a representative of the litigant. If this was not persuasive, then, alternatively, the Court argued, since the EEOC was not a party of or privy to the agreement, it cannot be expected to be affected by it. This was not a faulty line of reasoning, however, in the process of describing to whom the arbitration agreement does not apply, the Court ignored to whom it doesapply: the employer. This side of the equation was lost in the Court’s discussion, as they ignored the FAA’s policy of enforcing the wishes of the contracting parties. The arbitration agreement at issue in Waffle House , as well as every other case involving pre-dispute arbitration agreements, bound not only the employee to the arbitral forum, but also the employer. This should have reminded the Court that employers are also parties to the contract; parties whose expectations to arbitrate employment related disputes should be recognized and upheld, rather than overlooked and ignored.Unfortunately, the Court has forgotten about its support for the FAA’s original purpose: to put arbitration agreements on the same footing as contracts. Lurking beneath the surface were those visceral and sympathetic sentiments that have no basis in reason, common sense or logic; specifically, the beliefs that the employer is the only party who could benefit from this type of agreement, that the employer has an unequal bargaining advantage over the employee, and that employers will have an equally advantageous position during the arbitration proceeding either because they are repeat players, or because they exercise practical control over the arbitrator by virtue of controlling the selection process. This explains why the Court made no mention of the equal extent to which the employer is bound by the arbitration agreement.

The Court continued its “analysis” by pointing to the Fourth Circuit’s failure to examine the text of the ADA and FAA, as well as the arbitration agreement between the parties. Yet, if the Court itself paid any attention to the language in the text of the agreement, it would have had no other choice but to reach the opposite conclusion. Specifically, the Court cited a portion of the agreement which stated, “the parties agree that any dispute or claimconcerning Applicant’s employment with Waffle House…. will be settled by binding arbitration ” (emphasis added). Nowhere in the text of the agreement did the parties agree that the parties themselves would arbitrate the claim; they simply agreed that the claim itself would be settled by binding arbitration. The Court’s failure to see the distinction here epitomized its lack of sharp focus necessary to fairly adjudicate this case. A simple breakdown of the logical analysis would be: if a claim, before it arises, is bound by an agreement to be settled through binding arbitration, then no matter whodecides to pursue that claim, they must take the claim as they have found it and settle it through arbitration. In this case, the EEOC should have taken the claim as received from the employee: embedded with an agreement to be settled by binding arbitration. It is only fitting that in its quest to rationalize its decision, the Court ignored the most crucial piece of evidence, the arbitration agreement itself.

B. A Model for a Proper Analysis of EEOC v. Waffle House

A proper analysis of this case requires tough-minded resistance to feel-good rhetoric. The Fourth Circuit’s position in Waffle House came closest to achieving this goal. However, the Fourth Circuit wavered when it had the opportunity to be logically consistent. The Fourth Circuit allowed the EEOC to enforce general anti-discrimination principles while demonstrating that courts should enforce binding arbitration agreements. Although the Fourth Circuit’s decision attempted to provide a practical solution that was beneficial to the EEOC, employers, and employees alike, the decision is illogical. Specifically, to the extent that the Fourth Circuit held that the EEOC cannot seek a monetary remedy in court on behalf of an employee (victim-specific relief) where there is a valid and enforceable arbitration agreement, its decision was sound.

But to the extent that the Fourth Circuit authorized the EEOC to sue the employer in court in the name of “broad-based injunctive relief” that “promotes the public’s interest,” it is simply playing a game of form over substance. Generally, the Fourth Circuit still allows the EEOC to sue the employer in court based on a claim arising from the employee’s agreement.This should be expressly forbidden by an employment contract that says that the parties agree that any dispute or claim that arises in connection with the term of employment will be settled by mandatory arbitration . It is not a stretch of an argument to say that the EEOC’s claim for broad-based injunctive relief against the employer arose in connection with the term of employment between the employer and employee who filed the charge that triggered the EEOC’s suit. The EEOC should take the victim as they find him. The Gilmer court, perhaps unknowingly, acknowledged this very view that the EEOC should not be allowed to sue based on an employee’s charge if that charge is superceded by an arbitration agreement. As the Court in Gilmer noted, “the EEOC’s role in combating age discrimination is not dependent on the filing of a charge; the agency may receive information concerning alleged violations of the ADEA ‘from any source,’ and it has independent authority to investigate age discrimination.” Thus, if the EEOC wants to sue a specific employer, it should be allowed to do so only after it has taken actionindependent of any specific claim filed with it by any particular employee, to investigate alleged violations of workplace discrimination laws, thus exercising its right to receive information “from any source.”

Courts should not be bullied into acting like politicians, compromising here to get what they want over there. Courts should stick to the law, and they should honor private parties’ expectations when they enter into agreements. So, to the extent that the Fourth Circuit takes a compromising position, pleasing the EEOC by letting them sue for broad-based injunctive relief, and pleasing the employers by honoring their expectations under their agreement (albeit, only to a limited extent), its analysis and conclusion are flawed. The EEOC should not be allowed to sue an employer in court for “broad-based injunctive relief” to “promote the public’s interest,” when that suit is based on a claim that arose in connection with a specific employee’s employment relationship, and where that employee had agreed with his employer that any such claim would be settled only by binding arbitration .

IV. PRE-DISPUTE ARBITRATION AGREEMENTS: UNFAIR AND UNJUST? OR EFFECTIVE AND EFFICIENT?

A. The Benefits of Arbitration, and the Use of Pre-DisputeArbitration Agreements

Arbitration’s signature characteristics, efficiency and informality, coupled with its ability to allow “a greater number of aggrieved employees to seek redress for their discrimination claims,” distinguishes it as an arguably superior forum as compared to litigation. These characteristics also build the foundation for the argument that allowing mandatory pre-dispute arbitration agreements is extremely practical. For purposes of employment discrimination, where the victims are usually the low-level or blue collar worker, no other characteristics could be more appealing when searching for a forum in which to settle their grievances. The premium should be placed on finding practical solutions, not harping on worst-case scenarios with inflammatory rhetoric.

The arguments in favor of using arbitration instead of litigation to resolve claims arising under federal employment discrimination statutes are overwhelming. First and most importantly, arbitration provides potentially aggrieved employees with the best possible access to a remedy. Today, since several factors have contributed to the formation of a virtual blockade that denies aggrieved employees any opportunity to recover appropriate relief, justice demands an alternative forum in which employees will have a realistic opportunity of obtaining relief. The time and cost of pursuing a claim through traditional methods of litigation present the most glaring and formidable obstacles to relief for employment discrimination victims. While it might not make a difference to the upper level managerial worker who can afford the services of an expensive lawyer, and who can withstand the grueling process of litigation, those employees who are less financially sound are chronically unable to attract the services of a quality lawyer. For example, experienced litigators maintain that good plaintiff’s attorneys will accept only one in a hundred discrimination claimants who seek their help. For those claimants who are denied the services because of their financial situation, the simpler, cheaper process of arbitration is the most feasible recourse. These are workers whose potential dollar recovery will simply not justify the investment of the time and money of a first rate lawyer in preparing a court action In addition, these are precisely the workers whom are most often the victims of employment discrimination, and around whom policy decisions should be formulated.

Next, arbitration significantly reduces the amount of time that is normally required before an employee can finally see the fruits of his labor and receive his redress through litigation. Arbitration cases are normally resolved in less than one year once the claim is submitted. The quickness with which aggrieved individuals can get from a mere allegation of a claim to a final allocation of a reward in an arbitration proceeding illustrates the practical advantages that exist for employees who agree to use mandatory, binding arbitration to resolve any potential dispute that might arise in connection with their employment. Two reasons for the speed with which arbitration claims are resolved are that parties to an arbitration proceeding usually are granted much more control over the time table than parties to a litigation proceeding, and the discovery process is limited, compared to litigation, so parties do not get bogged down in unnecessary and onerous discovery requests that are really intended to force the other party into submitting to an unfavorable settlement.

There are several other reasons why arbitration is more attractive than litigation when pursuing claims of workplace discrimination. First, arbitration offers a greater opportunity for employee reinstatement. Second, it helps to reduce the backlog of cases in federal courts. Third, the potential for jumbo-sized jury awards, which are the product of a combination of sympathetic feelings towards the victim and vengeful feelings toward the discriminator, is eliminated. Finally, arbitration proceedings are confidential and final.However, even though arbitration may be a more effective forum for resolving workplace discrimination claims, the question still remains whether employees should be forced to sign arbitration agreements before any dispute arises, or if they should be allowed to wait until after the incident, so that they will be in a better position to both evaluate their claim and bargain with their employer about the terms and conditions of any such agreement.

Pre-dispute arbitration agreements eliminate the obstacles presented by litigation, because these agreements bind both parties to a course of action at the outset of their relationship. Therefore, it is more desirable to enter into arbitration agreements before any dispute arises because it is likely that employers will not want to sign an arbitration agreement after the dispute has already risen. Without a mutual obligation up front, employers will have little to no incentive to agree to arbitration after the claim has arisen. Such prior agreements prevent the employers from gaining an advantageous position later on, which is what occurs when arbitration agreements are entered into after the dispute has arisen. Drawing upon this reality, one can conclude that employers will sign post-dispute arbitration agreements only when they are absolutely certain that the claimant will succeed, in an effort to stave off a potentially extravagant jury award. In all other instances where uncertainty exists (which, realistically, will cover a substantially majority of claims), employers can be expected to strong-arm the little employee, forcing him into protracted litigation, where an employee will likely not have the time, money or gumption to stay the course, or even the ability to obtain adequate legal counsel. In sum, since arbitration is a superior forum than litigation in which to resolve employment related claims of discrimination, and since employers would have little to no incentive to sign arbitration agreements after a dispute had already arisen, pre-dispute arbitration agreements are the most practical and beneficial tool for employers and employees to use to ensure that workplace discrimination claims are resolved fairly, efficiently, and beneficially for all parties involved.

B. Criticizing Arbitration and Pre-Dispute Arbitration Agreements

The primary argument for not allowing employers to include arbitration agreements in their employment contracts is that they are unfair, on the grounds that the parties have “unequal bargaining power.” Critics label such contracts as “adhesion contracts” in an attempt to signal that the potential employee is actually “coerced” into signing the agreement. Such claims are ludicrous at best, and offensive to any sense of dignity, at worst. Such an assertion implies that, in the normal course of business, employers and potential employees actually do “bargain” over the contractual terms. Otherwise, why would anyone be concerned with the levels of “bargaining power” if the parties are in fact not bargaining? Moreover, “unequal bargaining power” is a phrase that cannot be described or explained in any meaningful, measurable and realistic manner. Finally, even if there is such “unequal bargaining power,” “mere inequality in bargaining power … is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context.” And although opponents utilize the famous slippery slope scare technique and assert that soon all employees will be stripped of their bargaining power and forced into signing these clauses, the facts show that use of such arbitration agreement clauses in employment contracts is not as widespread as these critics may suggest.

Other arguments advanced to discredit the use of mandatory, pre-dispute arbitration agreements in employment contracts are that the employers exercise control over the arbitration process and retain significant advantages by virtue of being repeat players in the system, and by having control over the selection of the arbitrators. This argument is premised on the assumption that employers routinely discriminate, and are routinely brought to arbitration by the aggrieved individuals. This argument fails on its merits when real evidence is examined. Furthermore, if employers do in fact have control over the selection of the arbitrators and the process in general, this bias can be eliminated by both following the suggestions which have been offered by the Dunlop Commission, and adopting this paper’s proposal. It seems that where a problem exists with the use of these arbitration agreements, the most sensible solution is to attack that one specific problem head on, instead of giving up hope on the entire project.

Additionally, critics claim that the use of arbitration agreements usurps the power of the courts to create binding precedent by forcing claims into arbitration that may have otherwise been resolved through litigation. This is unpersuasive as a ground for rejecting the use of pre-dispute arbitration agreements because in the context of employment related discrimination claims, the result often depends on a conclusion of whether the particular employer, under the specific facts and circumstances, discriminated against the particular individual. Thus, in the large majority of cases, there is no binding precedent that is of much value anyway. In conjunction with this claim is the assertion that since arbitration decisions are not regularly reported and made publicly available, these decisions do not have the deterrent effect of a similar decision rendered in a court, especially where there are huge damage awards. Similarly, there is an argument that the limited amount of judicial review that is allowed for arbitration decisions makes it difficult for courts to correct errors that arbitrators may make, especially in statutory interpretation. Finally, with respect to procedural arguments against arbitration, the EEOC argues in its policy statement that the limited discovery in arbitration is more detrimental to employees than to employers because the employers already have access to the information that is likely to be relevant to resolving the dispute.

On balance, the arguments in favor of arbitration in general, and the use of pre-dispute arbitration agreements in particular, outweigh the arguments counseling against this process. The simplest explanation for why mandatory, pre-dispute arbitration agreements are advantageous is that, in practice, they provide the best tool for helping those individuals about whom we are most concerned: the little employees. One commentator said it best when, defending the use of these agreements, he proclaimed, “perhaps the validity of mandatory arbitration should depend more on a pragmatic assessment of what is likely to be best in practice for the great majority of workers, employers, and the public, rather than on abstract notions about the inviolability of statutory claims and the sanctity of the right to a jury trial.”Ultimately, for these workers, mandatory arbitration may be their only choice.

V. PROPOSAL

Congress must act now to stop the bleeding caused by the Supreme Court’s ill-advised decision in Waffle House . Congress should create a separate, specific division of the EEOC that is devoted solely to representing claimants in arbitration proceedings where the claimants are those who have entered into pre-dispute arbitration agreements with their employers and have subsequently filed a claim with the EEOC. This would assure that all aggrieved employees will have a real, practical ability to pursue their claims in a forum in which they can be reasonably certain of obtaining the relief they deserve at an affordable cost, a goal that is unattainable under the current system. At the same time, such a scheme will protect employers’ expectations not to be hauled into court after agreeing to arbitrate employment related disputes.

If an aggrieved employee has the power of the EEOC’s arbitration division in its corner should a dispute ever arise, there can be no more mention of any “unequal bargaining power” between the employer and the employee. Furthermore, if employees had access to the resources of a well-funded government agency during an arbitration proceeding, then no one would be able to reasonably claim that the arbitration process is unfair because employers are repeat players and have control over the arbitrators that handle the disputes.

One final obstacle would still remain in place should the EEOC take charge of all arbitration proceedings involving individuals who have agreed to mandatory and binding arbitration: the due process concerns that arise in the arbitration process. The answer to this problem is to follow the recommendations set forth in the 1994 report issued by the Dunlop Commission on the Future of Worker-Management Relations (“Dunlop Commission”). The Dunlop Commission suggested seven guidelines that would ensure due process in the arbitration process, including a recommendation that a person of their choice represent the employee in arbitration.

Finally, to have any real effect, the proposal would require greater funding for the EEOC. The goal is to transform the EEOC from a perpetually under-funded agency that suffers from a shortage of staff with a mountain of unfinished cases, into a more efficient government agency with not only the authority, but also the practical ability to live up to its Congressionally-announced purpose of eradicating workplace discrimination.

[1]Senior Notes Editor, The Cardozo Journal of Conflict Resolution. J.D. Candidate, Benjamin N. Cardozo School of Law, 2004. I would like to thank my parents for the support and encouragement they have given me throughout my academic career. I would also like to acknowledge the Executive Board of the Cardozo Journal of Conflict Resolution for helping to make this Note possible.

[2] 534 U.S. 279 (2001).

[3]See, e.g., Farnsworth on Contracts , § 5.1. (“The principle of freedom of contract rests on the premise that it is in the pubic interest to accord individuals broad powers to order their affairs through legally enforceable agreements”).

[4]See Waffle House ., 534 U.S. at 279 (2001) (holding that an agreement between an employer and an employee to settle all employment-related disputes through binding arbitration, does not bar the EEOC from later pursuing victim-specific judicial relief, such as backpay, reinstatement and damages in an ADA enforcement action in federal court).

[5]See What is an Arbitration Agreement? athttp://law.freeadvice.com/litigation/arbitration/agreement_arbitration.htm (last visited February 20, 2004).

[6]See Waffle House Inc ., 534 U.S. at 279 (2001). In its opinion, the Court focuses on the EEOC’s status as a non party to the contract, and how this status affects their rights and obligations in connection with the arbitration agreement. See id. (“The FAA … does not purport to place any restriction on anonparty’s choice of a judicial forum.”) Id . at 289 (emphasis added); (“We must also recognize that in this case the EEOC is not a party to any arbitration agreement” Id . ( citing Equal Employment Opportunity Commission v. Waffle House, Inc., 193 F.3d 805F.3d 805, 811 (4 th Cir.1999). However, nowhere in the Court’s analysis is any mention made to the expectations that the employer had in connection with the agreement to which it was a party; specifically, the expectation that any dispute would be settled by binding arbitration and that it would not suddenly and surprisingly find itself threatened with unwanted litigation. See id .

[6]See discussion, infra Part III.

[7]See Waffle House , 534 U.S. at 282-85.

[8]See id at 285 (concluding, for example, after having just begun its analysis that, “these statues unambiguously authorized the EEOC to obtain the relief that it seeks in its complaint if it can prove its case against respondent”) (emphasis added). It is a shame that even the Supreme Court suffers from the infirmity of covering up a lack of a credible, substantive argument by using such a word as unambiguously ; a word that is equally despised in legal arguments as clearly , and obviously . One should not need to point out that if the statutes so unambiguously authorized the EEOC to obtain the relief that it seeks, that the many clever lawyers and judges who interpreted those statutes along the way would have noticed this, thus preventing the issue from reaching the Court.

[9]See discussion, infra Part II.

[10]See Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (holding that the FAA applies to employment contracts, except for those covering workers engaged in transportation).

[11]See ., Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983) (describing the provisions of the Federal Arbitration Act as manifesting a “liberal federal policy favoring arbitration agreements”); Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (explaining that the purpose of the FAA was “to reverse the longstanding judicial hostility to arbitration agreements. . . and to place arbitration agreements on the same footing as other contracts.”); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625 (1985) (exclaiming that the FAA is “at bottom a policy guaranteeing the enforcement of private contractual agreements.”).

[12]See e.g. , Symposium : Effective Resolution of Disputes in the New Millennium: Perceptions, Myths and the Law: Essay Compulsory Arbitration Agreements. . . Issues Concerning The Enforcement of Compulsory Arbitration Agreement Between Employers and Employees , 31 St. Mary’s L. J. 1015 (2000) (concluding that binding arbitration agreements are a viable and economic alternative to avoiding the traditional time-consuming and costly practice of litigation); Samuel Estreicher, Saturns for Rickshaws: The Stakes in the Debate Over Predispute Employment Arbitration Agreements , 16 Ohio St. J. on Disp. Resol . 559 (2001) (claiming that arbitration should be available for resolving employment disputes because they are in the best interests of employers as well as most employees and the overburdened court system); Theodore J. St. Antoine, Krinock Lecture Series: Mandatory Arbitration of Employee Discrimination Claims: Unmitigated Evil or Blessing in Disguise? , 15 T.M. Cooley L. Rev. 1 (1998) (suggesting that most employees would be better off with mandatory arbitration as long as the full range of statutory remedies were available and the proceedings guaranteed due process).

See Michael H. LeRoy & Peter Feuille, When is Cost an Unlawful Barrier to Alternative Dispute Resolution? The Ever Green Tree of Mandatory Employment Arbitration? , 50 UCLA L. Rev. 143 (2002) (concluding, based on an analysis of drawn from a sample of 313 federal court decision in which a party to a mandatory arbitration agreement tried to litigate a legal claim arising from the employment relationship, that on a total cost basis, the average employment arbitration process costs less than the average employment discrimination lawsuit).

The author of this Note, as well as others, believes that this is the proper area in which Congress should exercise its legislative powers. See discussion infraPart V. See also Michael Z. Green, Proposing a new Paradigm for EEOC Enforcement After 35 Years: Outsourcing Charge Processing By Mandatory Mediation , 105 Dick. L. Rev. 305 (2001) (proposing that Congress establish funding, separate from the EEOC’s annual funding, to create a private mandatory mediation program to work with parties to resolve their EEOC charges); Senator Russell D. Feingold, Policy Essay: Mandatory Arbitration What Process is Due? , 39 Harv. J. on Legis. 281 (2002) (arguing that powerful parties in specific contractual settings, such as employment relationships, automobile franchises, and consumer credit, are abusing the promises of the FAA, and proposes legislative changes to prevent this abuse).

See Michael Z. Green, Debunking the Myth of Employer Advantage from Using Mandatory Arbitration for Discrimination Claims , 31 Rutgers L.J. 399 (2000) (arguing that the use of mandatory arbitration to resolve statutory employment discrimination disputes presents a significant number of disadvantages for employers, and citing statistics showing that employees are much more successful in arbitration, thereby suggesting that employees have an incentive to use arbitration after a dispute arises).

See discussion infra Part I.

42 U.S.C. § 2000e to § 2000e-17 (2000).

42 U.S.C. § 2000e-5(b) (2000).

42 U.S.C. § 2000e to § 2000e-17 (2000).

9 U.S.C. § 1 (2000).

42 U.S.C. § 12, 1-12, 13 (2000).

The word “mandatory” is used in quotes here to mock the critics who attempt to disguise their lack of a logical and coherent substantive argument against pre-dispute arbitration agreements with fancy rhetoric. Such inflammatory language attempts to induce the reader into feeling shock and outrage against employers who dare “force” little, innocent and helpless employees to give up their day in court through “mandatory” clauses in “adhesion contracts.” See ., Feingold, supra note 15; John W.R. Murray, Note: The Uncertain Legacy of Gilmer, Mandatory Arbitration of Federal Employment Discrimination Claims 26 Fordham Urb. L.J. 281 (1999); Julie L. Waters, Comment: Does the Battle Over Mandatory Arbitration Jeopardize the EEOC’s War in Fighting Workplace Discrimination? , 44 St. Louis L.J. 1155 (2000); David S. Schwartz, Enforcing Small Print to Protect Big Business: Employee and Consumer Rights Claims in an Age of Compelled Arbitration , 1997 Wis. L. Rev. 33 (1997).

See discussion infra Part V, and accompanying notes.

See 42 U.S.C. § 2000e to § 2000e-17 (2000). The statute states:

It shall be an unlawful employment practice for an employer – (1) to fail or refuse to hire or to discharge any individual, or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment because of such individual’s race, color, religion, sex, or national origin.

Id .

See 42 U.S.C. § 2000e (2000).

42 U.S.C. 2000e-5(b) (2000) (stating that “the commission shall endeavor to eliminate any such alleged unlawful employment practice by informal methods of conference, conciliation and persuasion.”).

See 42 U.S.C. 2000e-5(b) (2000). After the EEOC investigates, if it determines that there is no “reasonable cause” for the complaint, the EEOC will issue the employee a “right to sue letter.” 29 C.F.R. § 1601.28(b) (1999). This letter now allows the employee to pursue his claim independently.

See Julie L. Waters, Comment: Does the Battle Over Mandatory Arbitration Jeopardize the EEOC’s War in Fighting Workplace Discrimination? , 44 St. Louis L.J. 1155 (2000) (chronicling the EEOC from its inception and noting that the Commission’s early authority was restricted and that Congress enacted the 1972 amendments to the Civil Rights Act as a response to recognition that the authority that was granted to the EEOC was inadequate to combat workplace discrimination).

42 U.S.C. § 2000e (2000); 42 U.S.C. § 1981a (2000); 42 U.S.C. § 12101 (2000).

See Richard A. Bales, Compulsory Employment Arbitration and the EEOC , 27 Pepp. L. Rev. 1 (2000) (“Congress reinstated the EEOC’s prosecutorial power as part of the 1972 Equal Employment Opportunity Act Amendments to Title VII giving the EEOC authority to sue employers for violations of the statute”). See also Julie L. Waters, Comment: Does the Battle Over Mandatory Arbitration Jeopardize the EEOC’s War in Fighting Workplace Discrimination ?, 44 St. Louis L.J. 1155 (2000) (claiming that, “In 1972, Congress recognized that the authority granted to the EEOC was inadequate to fight discrimination”).

See Alfred Blumrosen, Black Employment and The Law 59 (1971) (coining the term, “toothless tiger”); Michael Z. Green, Proposing a New Paradigm for EEOC Enforcement After 35 Years: Outsourcing Charge Processing by Mandatory Mediation , 105 Dick. L. Rev. 305 (2001) (chronicling the underachievement of the EEOC with respect to enforcing federal employment discrimination laws, and noting, in particular, its reputation prior to the 1972 amendments to the Civil Rights Act of 1964 as a “toothless tiger”). See alsoThe 1970s: The “Toothless Tiger” Gets Its Teeth – A New Era of Enforcement,at http://www.eeoc.gov/abouteeoc/35th/1970s/index.html (exposing the EEOC’s weaknesses with respect to handling the numerous charges it receives and utilizing its authority to litigate effectively) (last visited Feb. 20, 2004); Bales, supra note 30, at 9 (2000) (claiming that the lack of any real enforcement authority rendered the EEOC toothless for the first decade of its existence (citing Hugh D. Graham, The Civil Rights Era, 133-34 (1990) (emphasis added).

See The 1970’s: The “Toothless Tiger” Gets Its Teeth – A New Era of Enforcement, at http://www.eeoc.gov/abouteeoc/35th/1970s/index.html (last visited Feb. 20, 2004 ).

See General Telephone Co. v. Equal Employment Opportunity Commission, 446 U.S. 318 (1980) (complaining that, “the EEOC does not have the authority to issue judicially enforceable orders to back up its findings of discrimination,” and adding further that the “burden of obtaining enforceable relief rests upon each individual victim of discrimination.”).

42 U.S.C. § 2000e-5(f) (2000). According to the statute, if the EEOC could not reach an agreement with the accused employer after attempting to conciliate, then, it was authorized to “bring a civil action against any respondent not a government, governmental agency, or political subdivision named in the charge.” Id .

See id .

See id .

See 42 U.S.C. § 2000e-5(f)(1) (2000). The statute states in relevant part:

A charge must be filed within 180 days after the occurrence of the allegedly unlawful practice, and the EEOC is directed to serve notice of the charge on the employer within 10 days of filing. The EEOC is then required to investigate the charge and determine whether there is reasonable cause to believe that it is true. This determination is to be made as promptly as possible and, so far as practicable, not later than 120 days from filing the charge.

Id at § 2000e-5(f)(1). See also Occidental Life Ins. Co. of Cal. v. Equal Employment Opportunity Commission, 432 U.S. 355, 359 (1977) (noting that Congress required a charge be filed within one hundred and eighty days of the occurrence of the alleged unlawful discrimination practice).

See 29 C.F.R. § 1601.28(a)(1) (noting that an employment discrimination claimant can request a notice of right to sue 180 days after filing a charge of discrimination) (emphasis added). See also 42 U.S.C. § 2000e-5(f)(1) (describing procedures for filing a court claim).

See 42 U.S.C. § 1981a(a) (1) (2000) (giving plaintiffs alleging intentional discrimination under Title VII and under the Americans With Disabilities Act the power to pursue punitive and compensatory damages and have their claims settled through a jury trial).

See 42 U.S.C. § 1981(a)(b), (c) (1994).

See 42 U.S.C. § 2000e-5(e)(5) (2000) (providing the EEOC with the power to seek back pay, reinstatement, injunctive relief, and attorney’s fees when an employer has committed unlawful discriminatory practices).

See ., CONG. REC. S28915 (Apr. 25, 1991) (making clear that punitive damages are meant not only to punish the employer from past acts of discrimination, but also deter them from future ones).

See 42 U.S.C. § 1981. The statute encourages the use of alternative means of dispute resolution “where appropriate and to the extent authorized by law.” Id.

See id .

See discussion infra Part III and accompanying notes.

See ., Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983) (discussing the liberal federal policy favoring arbitration, as manifested in the FAA). See also Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 472 U.S. 614 (1985), “[s]o long as the prospective litigant effectively may vindicate his or her statutory cause of action in the arbitral forum, the statute will continue to serve both its remedial and deterrent function,.” Id . at 637. “If Congress intended the substantive protection afforded by the ADEA to include protections against waiver of the right to a judicial forum, that intention will be deducible from the text or legislative history.” Id . at 628. See also Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213 (1985) (stating that the purpose of the FAA was “to reverse the longstanding judicial hostility towards arbitration agreements, and to place them on an equal footing with contracts.”

9 U.S.C. § 1 (2000). The statute states in part: “A written provision in any. . . contract. . . to settle by arbitration a controversy thereafter arising out of such contract … shall be valid, irrevocable, and enforceable.” Id .

H.R. Rep. No . 96, 68th Cong., 1st Sess. 1 (1924) (stating that under the bill, “an arbitration agreement is placed upon the same footing as other contracts”).

See id . (“Action should be taken at this time when there is so much agitation against the costliness and delays of litigation.”).

See Gilmer v. Interstate Johnson Lane Corp., 500 U.S. 20, 24 (1991) (describing the purpose of the FAA as intending to “reverse the longstanding judicial hostility towards arbitration agreements that had existed at English common law.”).

See Rebecca K. Beerling, Left Out of the Balance – The Public’s Need for Protection Against Workplace Discrimination: Waffle House and Kidder Peabody Attempt to Limit the Remedies Available to the EEOC by Balancing Policies Not in Conflict , 25 Hamline L. Rev. 295 (2002) (noting that even after Gilmer , the issue of whether employment contracts were subject to the FAA had not yet been addressed).

See Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (confirming that employment contracts are subject to the FAA unless an employee qualifies for one of the enumerated exceptions stated in the Act).

See generally , Southland Corp. v. Keating, 465 U.S. 1 (1984) (proclaiming that by passing the FAA, Congress had “declared a national policy favoring arbitration.”); Gilmer , 500 U.S. at 35 (expressing the strong federal policy favoring the enforcement of arbitration agreements).

Even the EEOC agrees to this. The agency encourages parties to use alternative dispute resolution processes to settle employment discrimination suits, so long as the process is fair, voluntary, confidential and enforceable.

42 U.S.C. §§ 12111 et seq . (1994).

The statute states: “Where appropriate and to the extent authorized by law, the use of alternative means of dispute resolution, including settlement negotiations, conciliation, facilitation, mediation, fact-finding, mini-trials, and arbitration, is encouraged to resolve disputes arising under this chapter.” Id.at § 12212.

29 U.S.C. § 621 (1994).

See Gilmer v. Interstate Johnson Lane Corp., 500 U.S. 20 (1991) (holding that a claim under the ADEA can be subjected to compulsory arbitration pursuant to an arbitration agreement in a securities registration application). Unlike the ADA , the ADEA does not expressly provide for “the use of alternative means of dispute resolution … to resolve disputes” under the act.See generally note 59, supra Part I.C. and discussion.

415 U.S. 36 (1974). In Alexander , plaintiff was an African-American employee who was fired from the Gardner-Denver company on the grounds that he had produced an allegedly excessive number of defective parts. Alexander was a member of a union, which had entered into a collective bargaining agreement with the employer, part of which banned discrimination based on race and called for private arbitration to settle the dispute. The union argued in arbitration that his termination was due to discrimination. The arbitrator found that just cause existed for Mr. Alexander’s termination, in spite of evidence indicating that white workers who suffered from similar performance problems were transferred to other jobs, instead of being terminated. The arbitrator’s award made no mention of the discrimination claim. Alexander then filed suit in federal district court, and his claim was dismissed on the ground that he was bound by the arbitration award; the Court of Appeals affirmed. See id .

See id .

See id . at 40.

See id . at 45.

The Court pointed out two specific factors Congress considered when enacting the statute: first, Congress had enacted Title VII for the precise purpose of protecting individual employee rights, and second, Congress had created the EEOC and outlined specific statutory enforcement procedures for protecting those rights. Id . at 48.

See id . at 57-58. The Court determined that the record of the proceeding is not as complete as it is in litigation, the arbitrator does not require cross-examination or testimony taken under oath, and the arbitrator is not required to set forth their reason for an award. Moreover, the Court explained that these procedures, which are absent in arbitration, are exactly the procedures that allow litigation to be a more equitable forum for deciding discrimination claims. In addition, the Court believed that the arbitration process, while desirable for resolving labor disputes because of its efficient and inexpensive qualities, was not suited as a proper forum for deciding Title VII issues. See id. at 57-58.

See id . at 58.

473 U.S. 614 (1985). In Mitsubishi , the parties were both corporations who had entered into a sales agreement in which the arbitration clause was embedded. A dispute arose regarding slackening automobile sales. The petitioner, a Japanese corporation that manufactures automobiles, withheld shipment of automobiles to respondent, a Puerto Rican corporation. Respondent disclaimed responsibility for the automobiles, and the petitioner brought the suit to compel arbitration in accordance with the agreement. The District Court ordered arbitration of the dispute, holding that the international nature of the agreement required enforcement of the arbitration clause, even as that clause covered antitrust claims under the federal antitrust statute known as the Sherman Act. The Court of Appeals reversed that portion of the decision that related to the antitrust claims. See id .

See Mitsubishi Motors , 473 U.S. 614 (1985). In holding that claims arising under the Sherman Act and embedded in a valid arbitration agreement are arbitrable pursuant to the Federal Arbitration Act, the Court rejected the claim that the clause does not contemplate the arbitration of the statutory claims because the arbitration clause at issue does not mention these statutes or statutes in general, and because the party objecting to the enforcement of the clause falls within the class for whose benefit the statutes were intended. Moreover, the Court declared, “we are well past the time when judicial suspicion of the desirability of arbitration and of the competence of arbitral tribunals inhibited the development of arbitration as an alternative means of dispute resolution.” Id . at 626.

The Court explained,

by agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum. It trades the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration.

Id . at 628.

While the phrase, “judicial remedies” may lead one to imply that the Court was referring to specific types of substantive remedies, that interpretation would contradict the distinction they make in this case between types of remedies and types of forums. Thus, the phrase, “judicial remedies” should be interpreted to mean all remedies, and distinguish only on the basis of the forum in which they are pursued/awarded.

After admitting that when an arbitration agreement is procured by fraud or overwhelming economic power sufficient “for the revocation of any contract.”See 9 U.S.C. § 2, the Court pointed out that “absent such compelling considerations, the (Federal Arbitration) Act itself provides no basis for disfavoring arbitration agreements statutory claims by skewing the otherwise hospitable inquiry into arbitrability.” Id . at 627.

500 U.S. 20 (1991). Gilmer was a financial services manager for Interstate. As a financial services manager, Gilmer was required to file a registration application with the New York Stock Exchange (NYSE). This registration application contained the arbitration provision, providing that Gilmer “agreed to arbitrate any dispute, claim or controversy arising between him and Interstate that is required to be arbitrated under the rules, constitutions or by-laws of the organizations with which I register.” Id . at 23. The relevant rule, NYSE Rule 347 provides for arbitration of “any controversy between a registered representative and any member or member organization arising out of the employment or termination of employment of such registered representative.” Upon being fired, Gilmer first filed a charge with the EEOC, and then sued in federal district court on the grounds that his termination was due to his age (being sixty-two at the time he brought suit) and in violation of the Age Discrimination in Employment Act (“ADEA”). Interstate filed a motion to compel arbitration pursuant both to the registration application, and the Federal Arbitration Act. The District Court denied the motion on the grounds that Congress had intended to protect claimants suing under ADEA from waiving their right to a judicial forum. The Court of Appeals for the Fourth Circuit reversed, after “finding nothing in the text, legislative history, or underlying purposes of the ADEA indicating a congressional intent to preclude enforcement of arbitration agreements.” SeeGilmer v. Interstate/Johnson Lane Corp., 895 F.2d 195, 197 (4 th Cir. 1990)).

500 U.S. 20 (1994).

See Gilmer , 895 F.2d 195 (4 th Cir. 1990).

See Gilmer , 500 U.S. at 20 (1994).

See id . at 29. The Court referred to its decision in Mitsubishi , where it stated that “[i]f Congress intended the substantive protection afforded by the ADEA to include protection against waiver of the right to a judicial forum, that intention will be deducible from text or legislative history.” Mitsubishi Motors Corp. v. Soler Chrysler Plymouth, Inc., 473 U.S. 614 (1985).

See id .

See Gilmer , 500 U.S. , at 24-26. In particular, the Court stressed that the FAA provided for orders compelling arbitration when one party has refused to comply with an arbitration agreement, 5 (citing section four of the FAA), that this provision, along with others, manifests a “liberal federal policy favoring arbitration agreements” (citing Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24 (1983)), and finally, that it is clear arbitration agreements covering statutory claims are enforceable pursuant to the FAA. Id. at 25-6

See id .

See id .

See Gilmer, 500 U.S. at 30-31. The Court rejected Gilmer’s contention that arbitration panels tend to show bias in favor of the employers, pointing out that in this case, the NYSE rules entitle all parties to the arbitration to extensive information about the arbitrators, that all parties may make challenges to the arbitrators, and that upon request, arbitrators are commanded to disclose any potential conflicts of interest. Furthermore, the Court paid little attention to Gilmer’s further complaint that plaintiffs have an overwhelming burden to overcome when attempting to prove their ADEA claims in arbitration due to the limited discovery procedures. Id . The Court pointed out that there is no basis for finding that ADEA claims require more extensive discovery than claims arising under other statutes that have been held to be arbitrable by the Court, such as RICO and antitrust claims. Id . Finally, the Court rejected Gilmer’s contentions that arbitration is deficient because arbitrators do not issue written opinions, that this leads to a lack of public knowledge and an inability to obtain effective appellate review, and that any judicial review that is obtained is too limited to be effective. Id . at 32.

See Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001).

Id. The facts of Circuit City reveal that Adams was hired at a store in California that was part of a national retail chain specializing in consumer electronics. Adams had signed an application that contained an arbitration agreement clause, stating, “I agree that I will settle any and all previously unasserted claims, disputes or controversies arising out of or relating to my application or candidacy for employment … with Circuit City , exclusively by final and binding arbitration before a neutral arbitrator.” Two years later Adams filed suit in state court under the California Fair Employment and Housing Act, as well as other tort claims. Circuit City filed suit in U.S. District Court for the Northern District of California, seeking to enjoin the state court action and to compel arbitration pursuant to the FAA.

See id .

9 U.S.C. § 1 (1925). The exemption clause in section 1 of the FAA says the FAA does not apply to “employment contracts of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” Id .

See Circuit City , 532 U.S. at 109. It should be noted as well that this issue was raised in Gilmer , yet the Court reserved the issue for another occasion on the grounds that the arbitration agreement clause was embedded in a securities registration, which the Court found not to be an employment contract for purposes of the FAA.

See Estreicher, supra note 12 (“what may seem a technical lawyers’ debate over the meaning of words Congress used in 1925 should not obscure the practical importance of Circuit City for the future of employment disputes in this country.”).

194 F.3d 1070 (9 th Cir. 1999).

See Circuit City , 532 U.S. at 105.

Id . at 1312 ( citing Southland Corp. v. Keating, 465 U.S. 1, 16 (1984)).

177 F.3d 448 (6th Cir. 1999). The facts of this case are as follows: Adams, an African American, signed an application form for employment with Frank’s nursery, which contained an arbitration agreement clause. Adams was hired, and when a new position was made available 18 months later, someone else was appointed: a white woman whom Adams felt was less qualified for the position than her. Adams filed a complaint with the EEOC alleging racial discrimination. After attempting to conciliate with Frank’s, the EEOC filed suit in Federal District Court, prompting Frank’s to move to compel Adams to arbitrate in accordance with the terms of the agreement. The District Court granted the motion on the ground that the agreement was valid and enforceable under Gilmer , it bound the EEOC, and since the EEOC had not identified any class of individuals that suffered discrimination, the EEOC could not pursue its action for class wide injunctive relief.

See id .

See id . at 449.

See id . at 450.

See id . at 454.

Id . at 454.

Equal Employment Opportunity Commission v. Frank’s Nursery & Crafts, Inc. , 177 F3d 448, 459 (6th Cir. 1999).

Id .

See id .

See id . at 460 (“As for Adams , she has not raised a claim against Frank’s at all: she neither initiated an arbitration nor a federal lawsuit.”).

See id . at 463 (“As we view this case, preclusion cannot apply because the EEOC and Adams are not in privity, and because they do not possess identical causes of action or interests.”).

See id . at 466 (“an individual cannot, by making decisions about her own ability to sue for herself, override the power of the EEOC to sue in its own name.”).

156 F.3d 298 (2d Cir. 1998). The facts of the case are as follows: The EEOC filed suit against Kidder, Peabody under the Age Discrimination in Employment Act (ADEA), seeking back pay, liquidated damages and reinstatement on behalf of seventeen former employees, on the grounds that they were terminated because of their old age. The EEOC dropped its claim for injunctive relief for some of the individuals when Kidder, Peabody ceased its investment banking practice, to which these former employees belonged. Each of the individuals had signed an arbitration agreement pursuant to the securities industry U-4 registration. During the course of the action, three of the individuals arbitrated their claims pursuant to their agreement. Kidder, Peabody moved to dismiss on the grounds that the arbitration agreements precluded the EEOC from pursuing relief on behalf of those specific employees.

See id .

Equal Employment Opportunity Commission v. Kidder, Peabody & Co., 979 F. Supp. 245 (S.D.N.Y. 1997).

See Kidder, Peabody , 156 F.3d. at 301. The court used its analysis of Gilmerto introduce the proposition that the existence of an arbitration agreement will not, by itself, render the EEOC powerless in every instance. In fact, the court pointed out that the Gilmer court itself stressed that an employee who signed such an arbitration agreement could still file a charge with the EEOC; they simply were precluded from instituting a private judicial action. Further, the court pointed out that the EEOC wasn’t required to engage in every instance of alleged employment discrimination. “Moreover, nothing in the ADEA indicates that Congress intended that the EEOC be involved in all employment disputes.” See id . ( citing Coventry v. United States Steel Corp., 856 F.2d 513, 522 (3d Cir. 1988); Moore v. McGraw Edison Co., 804 F.2d 1026, 1033 (8 th Cir. 1986); Runyan v. National Cash Register Corp., 787 F.2d 1039, 1045 (6 th Cir. 1986)).

See Kidder, Peabody , 156 F.3d at 301. The court cites the reliance on the “distinctive enforcement scheme of the ADEA” and the willingness to concede that the EEOC does not represent the public interest to the same extent when it is seeking individual monetary relief, compared to when it is seeking class wide injunctive relief.

See 921 F.2d 489 (3d Cir. 1990) (holding that individual employees who fully litigated their claims under ADEA were precluded by res judicata from obtaining individual relief in subsequent EEOC action based on same claims where appellee sought to serve as representative of former employees).

See Kidder, Peabody , 156 F.3d at 302 (“where the individual has freely agreed to arbitrate the ADEA claim, that decision, like the decision to waive or settle a claim, prevents the EEOC from pursuing monetary remedies on behalf of the individual in the federal forum” (citing Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983)).

See Kidder, Peabody , 156 F.3d at 302. The court believed that the forum in which the employee pursued its relief would not change the value of the award, nor the deterrent effect it would have on employees. “We see no reason to believe that the threat of an award of monetary damages obtained by a private individual through arbitration has any less deterrent value than the threat of an award of monetary damage obtained by the EEOC” ( c iting Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974)).

See id. at 303.

See Kidder, Peabody , 156 F.3d at 298.

193 F.3d 805 (4th Cir. 1999). The facts of the case are as follows: Eric Baker filled out an employment application that contained a clause indicating that “any dispute or claim concerning Applicant’s employment with Waffle House, Inc., will be settled by binding arbitration.” Two weeks after accepting the offer of employment, Baker suffered a seizure while on the job. Baker was fired from Waffle House approximately three weeks later, and immediately filed a charge with the EEOC. The EEOC then filed an enforcement action against Waffle House under the Americans with Disabilities Act of 1990. The EEOC sought a permanent injunction against Waffle House from engaging in discriminatory practices on the basis of disability, and also south specific relief on behalf of Baker, including back pay, compensation, punitive damages and reinstatement. Waffle House sought to compel arbitration of the claim, pursuant to the agreement. The District Court declined to accept the magistrate’s recommendations that the EEOC be required to arbitrate the agreement and denied Waffle House’s motions. Waffle House filed an interlocutory appeal challenging the District Court’s denial of a stay of the proceedings and its refusal to compel arbitration.

534 U.S. 279 (2001).

One commentator has noted that this is the critical distinction between the circuits. See Howard Gardner, Recent Development: EEOC v. Waffle House, Inc ., 15 Ohio St. J. on Disp. Resol. 571, 577 (2000) (arguing that the difference between the Fourth and Second and Sixth Circuit’s view is the “degree to which the emphasis on upholding arbitration agreements is viewed.”).

See Equal Employment Opportunity Commission v. Waffle House U.S. Dist. LEXIS 23245 (D. S.C. Mar. 24, 1998).

See Waffle House , 193 F.3d at 809-12.

Id . at 812. Furthermore, the Court noted that the EEOC’s mandate “cannot outweigh the policy favoring arbitration when the EEOC seeks relief specific to the charging party who assented to arbitrate his claim.” Id .

Id . at 811 (citing Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 32).

See Waffle House , 193 F.3d at 811.

See Waffle House , 534 U.S. at 284.

See id . at 285.

See id .

Id .

Occidental Life Ins. Co. of California v. Equal Employment Opportunity Commission, 432 U.S. 355 (1977) (reversing the District Court’s grant of defendant’s motion for summary judgment on the ground that the EEOC’s claim was time barred). In Occidental , the employee had filed a claim with the EEOC alleging sexual discrimination. The EEOC went through the motions of its statutorily required conciliation process, and upon failing to reach closure with Occidental , it filed suit in Federal District Court . The court granted summary judgment for the defendant, on the ground that the claim was barred by the statute of limitations, but the Supreme Court reversed in light of the “procedural structure created by the 1972 amendments.” Id . at 368

Id . at 368.

Id .

See id . at 285 (claiming that “[A]gainst the backdrop of our decisions inOccidental and General Telephone , Congress expanded the remedies available in EEOC enforcement actions in 1991 to include compensatory and punitive damages.”).

See General Tel. Co. of Northwest v. Equal Employment Opportunity Commission, 446 U.S. 318 (1980).

See Fed. R. Civ. P . 23.

See General Telephone , 446 U.S. at 318.

Id . at 326.

See Equal Employment Opportunity Commission v. Waffle House, Inc., 534 U.S. 279, 285 (2002).

See Waffle House , 534 U.S. at 286-87 (citing Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991)) (holding that an employee’s Title VII statutory rights do not pre-empt an arbitration agreement entered into with an employer); Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (confirming that employment contracts are subject to the FAA unless an employee is employed in one of the enumerated exceptions stated in the Act); Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995) (supporting its claim that the language of each contract defines the scope of the particular dispute that is subject to arbitration, the Supreme Court said, “The FAA’s pro-arbitration policy does not operate without regard to the wishes of the contracting parties.”).

Waffle House , 534 U.S. at 286 (citing Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. at 25 (quoting Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1 (1983)).

See 9 U.S.C. §§ 3 & 4 (2000).

Waffle House , 534 U.S. at 287.

Id .

See generally Waffle House , 534 U.S. at 279.

See id . at 12.

See Michael Z. Green, Debunking the Myth of Employer Advantage from Using Mandatory Arbitration for Discrimination Claims , 31 Rutgers L. J. 339 (2000).

See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, at 24 (1991) (exclaiming that the FAA’s “purpose was to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements on the same footing as other contracts”).

See generally Feingold, supra note 15, (claiming that in employment contexts, “parties with little bargaining power are effectively coerced into waiving their rights to go to court.”) (emphasis added); David S. Schwartz, Enforcing Small Print to Protect Big Business: Employee and Consumer Rights Claims in an Age of Compelled Arbitration , 1997 Wis. L. Rev. 33 (1997) (arguing that enforcing pre-dispute arbitration clauses allows large firms the power to “displace the judiciary from its role in enforcing common law claims and statutory rights.”).

See Waffle House , 534 U.S. at 287.

See id . at 284.

Id .

In full, the agreement states:

The parties agree that any dispute or claim concerning Applicant’s employment with Waffle House, Inc., or any subsidiary or Franchisee f Waffle House, Inc., or the terms, conditions or benefits of such employment, including whether such dispute or claim is arbitrable, will be settled by binding arbitration. The arbitration proceedings shall be conducted under the Commercial Arbitration Rules of the American Arbitration Association in effect at the time a demand for arbitration is made. A decision and award of the arbitrator made under the said rules shall be exclusive, final and binding on both parties, their heirs, executors, administrators, successors and assigns. The costs and expenses of the arbitration shall be borne evenly by the parties.

Id.

See Equal Employment Opportunity Commission v. Waffle House, Inc., 193 F.3d 805 (4th Cir. 1999).

See id . at 806.

See Julie L. Waters, Comment: Does the Battle Over Mandatory Arbitration Jeopardize the EEOC’s War in Fighting Workplace Discrimination? , 44 St. Louis L.J. 1155 (2000) (arguing that the Fourth Circuit’s approach in Waffle House is the best solution to the problem of balancing the federal interest in enforcing arbitration agreements with the EEOC’s interest in protecting individuals and the public).

See Waffle House , 193 F.3d at 806.

See id.

See id .

See id .

See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991).

Id . at 28 (citing 29 CFR §§ 1626.4, 1626.13 (1990)).

Unfortunately, if circumstances don’t change, the practical realities of the EEOC will preclude it from taking such a proactive stance. Therefore, the author suggests increasing the EEOC’s funding to enable to carry out its statutorily pronounced purpose of eradicating employment discrimination through investigative and conciliatory methods. See discussion, infra Part V.

See Waffle House , 193 F.3d at 806.

See, e.g ., Eric A. Hernandez, Mandatory Arbitration and Employment Discrimination: The Unfair Law , Cardozo Online J. Conflict Resolution (April 2001) at http://www.cardozojcr.com/articles_notes/vol2_an/hernandez.htm.

See generally , Harry T. Edwards, Advantages of Arbitration Over Litigation: Reflections of Judge, Arbitration 1982: Conduct of the Hearing, Proceedings of the 35th Annual Meeting, National Academy of Arbitrators 16, 27, 28 ( James L. Stern & Barbara D. Dennis eds., 1983); Betty Binns Fletcher, Arbitration of Title VII Claims: Some Judicial Perceptions, Arbitration Issues for the 1980’s, Proceedings of the 34th Annual Meeting, National Academy of Arbitrators 218-28 (James L. Stern & Barbara D. Dennis eds., 1982); Alvin B. Rubin, Arbitration: Toward a Rebirth, Truth, Lie Detectors, and Other Problems in Labor Arbitration, Proceedings of the 31st Annual Meeting, National Academy of Arbitrators, 30, 36 (James L. Stern & Barbara D. Dennis eds., 1979).

See St. Antoine, supra note 12 (arguing that, “the case for allowing mandatory arbitration – permitting employers to condition employment upon an employee’s arbitration agreement rather than litigate workplace claims, including statutory rights against discrimination is counter-intuitive and highly practical).

See generally Bales, supra note 30. Julie L. Waters, Comment: Does the Battle Over Mandatory Arbitration Jeopardize the EEOC’s War in Fighting Workplace Discrimination? , 44 St. Louis L.J. 1155 (2000); Charles B. Craver,The Use of Non-Judicial Procedures to Resolve Employment Discrimination Claims , 11 Kan. J.L. & Publ. Pol’y 141 (2001).

See Murray, supra note 22, (arguing that mandatory arbitration allows a greater number of aggrieved employees to have their discrimination claims heard than would otherwise be the case due to the dramatic proliferation of employment discrimination cases in federal and state courts, and the inability of the EEOC to respond effectively to this surge in recent years). See alsoCraver, supra note 161.

See Jay S. Siegel, Changing Public Policy: Private Arbitration to Resolve Statutory Employment Disputes , 13 The Labor Law, 87 (1997) (arguing that arbitration and mediation are the answer for preventing further clogging of our nation’s courts).

See ., St. Antoine, supra note 12; Michael Z. Green, Debunking the Myth of Employer Advantage from using Mandatory Arbitration for Discrimination Claims , 31 Rutgers L. J . 399 (2000).

See St. Antoine, supra note 12.

See id .

See id .

See id .

See id . at 7.

See McElroy, supra note 13, at 1015.

See Rosetta E. Ellis, Note , Mandatory Arbitration Provisions in Collective Bargaining Agreements: The Case Against Barring Statutory Discrimination Claims from Federal Court Jurisdiction , 86 Va. L. Rev . 307, 334 (2000).

See Susan A. FitzGibbon, Reflections on Gilmer and Cole , 1 Employee Rts. & Employment Pol’y J . 221 (1997).

See McElroy, supra note 13, at 1015 (arguing that the backlog of cases in district courts causes discrimination cases to linger for years); see also Richard A. Bales, Compulsory Arbitration of Employment Claims: A Practical Guide to Designing and Implementing Enforceable Agreements , 47 Baylor L. Rev . 591, 593 (1995) (describing the increase in employment litigation, which clogs court dockets, thus causing the parties to wait several years before trial); Evan J. Spelfogel, Mandatory Arbitration v. Employment Litigation , 54 Disp. Resol. J . 78 (1999) (noting that a case may take three to five years to reach trial).

See Leslie Grant, What is Arbitration? athttp://www.mediate.com/articles/grant.cfm (sampling the advantages that arbitration has over court action, making specific reference to privacy and finality) (last visited Feb. 20, 2004 ).

But see Michael Z. Green, Debunking the Myth of Employer Advantage from Using Mandatory Arbitration for Discrimination Claims , 31 Rutgers L.J. 339 (2000) (arguing that “the concern about juries has become a pervasive and misunderstood issue among employers.”).

See McElroy, supra note 13.

See Comm. on the Future of Labor-Management Relations, U.S. Dept. of Labor and U.S. Dept. of Commerce, Fact Finding Report 118 (Dec. 1994). See also , St. Antoine, supra note 12 (arguing that “for most run of the mill claims, employers will be inclined to wait them out, assuming that the great bulk will go nowhere.”).

See Murray, supra note 22; Green, supra note 12 (claiming that, “with evidence of resounding results on behalf of employers in the litigation process and absent evidence that arbitration will provide similar results, employers have no real advantage and little incentive to use mandatory arbitration”).

See Estreicher, supra note 12, at 567 (stating, “[A]n understanding of the underlying incentives of employers and employees makes clear that post-dispute arbitration, in all but the rarest cases, will not be offered by one party or accepted by the other.”).

See id .

See Michael Z. Green, Debunking the Myth of Employer Advantage from Using Mandatory Arbitration for Discrimination Claims , 31 Rutgers L.J . 399 (2000).

See Justin M. Dean, Note: Going, Going, Almost Gone: The Loss of Employees’ Rights to Bring Statutory Discrimination Claims in Court , 63 Mo. L. Rev. 801, 818 (1998) (using language from the Gilmer decision to illustrate that although the Court there expressed the view that “mere inequality in bargaining power. . . is not a sufficient reason to hold that arbitration agreements are never enforceable. . . ” it still acknowledged that a claim of unequal bargaining power can be made, and must be determined by a factual analysis on a case by case basis). The author further declares, incorrectly, that employees “must accept mandatory arbitration or risk being denied employment.” Id . at 818.

See ., Feingold, supra note 15, (claiming that employers are more “powerful parties [that] present [employers] with adhesion contracts that give the weaker parties no realistic choice as to the terms of the contract”); David S. Schwartz, Enforcing Small Print to Protect Big Business: Employee and Consumer Rights Claims in an Age of Compelled Arbitration , 1997 Wis. L. Rev . 33, 38 (1997) (giving an illustrative example of how “adhesive pre-dispute arbitration clauses systematically favor corporate defendants over adherents. . . ”).

See supra note 22.

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991).

See Michael Z. Green, Debunking the Myth of Employer Advantage from Using Mandatory Arbitration for Discrimination Claims , 31 Rutgers L.J. 399 (2000) (arguing that there is little to no empirical evidence that would suggest employers have a significant incentive (due to time and cost savings) to handle these disputes through arbitration).

See Bales, supra note 30, (claiming that the employer is likely to have better access to information regarding the arbitrators, and that arbitrators will suffer from a conflict of interest in realizing that the employer, rather than the employee, will be more likely to need an arbitrator in a subsequent case. This implies that the arbitrator will disregard the law and find in favor of the employer simply to secure the potential for business in the future should the employer just happen to discriminate again).

See Michael Z. Green, supra note 15, at 399 (explaining that, “without any empirical evidence of employer advantage, most of the scholarly debate has assumed that mandatory arbitration benefits employers. A great degree of this employer advantage rhetoric has relied on the reveres logic that employers would not be trying to use mandatory arbitration if it did not provide an advantage for them and a disadvantage for employees.”).

See infra note 204.

See discussion and accompanying notes infra Part V.

See EEOC Policy Statement on Mandatory Arbitration, 133 Daily Lab. Rep . (BNA), E-4 (July 11, 1997) [hereinafter, EEOC Policy Statement].

See Estreicher, supra note 12.

See id .

See EEOC Policy Statement.

See EEOC Policy Statement; See also Bales, supra note 30, (arguing that courts usually only reverse an arbitrator’s award if they acted in “manifest disregard of the law”) (citing Wilko v. Swan, 346 U.S. 427, 436-37 (1953), note 182).

See EEOC Policy Statement; See also Bales, supra note 30, (claiming that it is impossible for employees to prove disparate impact because they would have to obtain from the employer information regarding how the particular practice in dispute effects demographic segments of the employee population).

St. Antoine, supra note 12, at 2.

See id . at 8 (“the only choice for the ordinary worker with an ordinary claim may be a pre-dispute arbitration agreement – or nothing.”).

 

The author recognizes that a similar proposal has already been advanced. SeeGreen, supra note 14, at 305 (proposing that Congress create a private mandatory mediation program to assist the EEOC in its enforcement initiatives). However, the author distinguishes his proposal from the one cited based on the differences between arbitration and mediation, and on the details of each proposal. The proposals are parallel only to the extent that they both call for additional funding for the perpetually under-funded agency, and to the extent that the proposals both generally call for creating a new, separate division within the EEOC. See id . Additionally, the proposal advocated herein would mandate the EEOC be the default representation for aggrieved employees, allowing any individual to opt out and choose an arbitrator of his or her liking. Should an individual take such a route, the EEOC would not be cut out of the picture entirely, however, the EEOC would be required to work with this privately selected arbitrator to provide the individual with the same resources he or she would have had access to had he or she chosen the EEOC as his or her arbitrator.

See Jay S. Siegel, Changing Public Policy: Private Arbitration to Resolve Statutory Employment Disputes , 13 The Labor Law 87 (1997) (citing The 1994 Year End report on the Federal Judiciary, by the Supreme court, which revealed that between 20-25% of all cases pending on U.S. District Court dockets were private employment law disputes, and claiming it takes a significant amount of time for such cases to be resolved, and then only after the parties have gone through “the exhaustive and expensive discovery process before reaching the trial stage”). Id . at 89. Such a dismal reality can lead to only one conclusion, that it is practically impossible for parties to such disputes to resolve their claims swiftly or inexpensively, and that resort to alternative dispute resolution processes are necessary.

See ., Feingold, supra note 15 (claiming that in employment contexts, voluntary consent to such arbitration agreements is lacking and that “parties with little bargaining power are effectively coerced into waiving their rights to go to court,” emphasis added); Justin M. Dean, Note: Going, Going, Almost Gone: The Loss of Employees’ Rights to Bring Statutory Discrimination Claims in Court , 63 Mo. L. Rev . 801 (1998) (claiming that, “another problem with enforcing arbitration agreements in the employment context is theunequal bargaining powe r between employers and employees”) (emphasis added).

See, e.g ., Reginald Alleyne, Statutory Discrimination Claims; Rights “Waived” and Lost in the Arbitration Forum , 13 Hofstra Lab. L.J. 381, 426 (1996); Lisa B. Bingham, Employment Arbitration: The Repeat Player Effect , 1 Employee Rights & Empl. Pol’y J. 189, 192-93 (1997); Lisa B. Bingham, On Repeat Players, Adhesive Contracts, and the Use of Statistics in Judicial Review of Employment Arbitration Awards , 29 McGeorge L. Rev . 223, 241 (1998).

See Craver, supra note 161 (raising concerns about the due process protections in arbitration).

Commission on the Future of Labor-Management Relations, U.S. Dept. of Labor and U.S. Dept. of Commerce, Report and Recommendations 33 (Dec. 1994).

See id . The recommendations were as follows: 1) a jointly selected neutral arbitrator who knows the law, 2) simple, adequate discovery, 3) cost-sharing to ensure arbitrator neutrality, 4) representation by a person of the employee’s choice, 5) remedies equal to those provided by the law, 6) a written opinion and award, with reasons, and 7) limited judicial review, concentrating on the law.

See id .

See Bales, supra note 30 (“The efficacy of the EEOC’s prosecutorial power, however, is significantly constrained by the EEOC’s chronic lack of funds. The resultant backlog of cases and shortage of staff permits the EEOC to file suit in only a small percentage of the cases it considers”). See also Green, supra note 14 (“With just enough financial support to barely operate, the EEOC will undoubtedly continue to be criticized for not spending more time investigating charges, despite limited resources and growing responsibilities.”).

See e.g. , U.S. Equal Employment Opportunity Commission: An Overview, at, http://www.eeoc.gov/Overview.html; Rebecca K. Beerling, Left Out of the Balance – The Public’s Need for Protection Against Workplace Discrimination: Waffle House and Kidder Peabody Attempt to Limit the Remedies Available to the EEOC by Balancing Policies Not in Conflict , 25 Hamline L. Rev. 295 (2002) (“In an attempt to eliminate workplace discrimination Congress enacted the Civil Rights Act of 1964 Title VII.”); 42 U.S.C. § 2000e (2000).