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EEOC Changes Policy on Mandatory Arbitration

Of Counsel
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This past week, the EEOC withdrew its 1997 policy statement regarding mandatory binding arbitration agreements. In that policy statement, the EEOC took the position that the use of mandatory binding arbitration agreements as a condition of employment were contrary to the fundamental principles of the federal anti-discrimination statutes, including the right to pursue discrimination claims in court.

The EEOC’s reversal follows nearly 20 years of U.S. Supreme Court case law repeatedly affirming the use of mandatory binding arbitration agreements in the employment context. See, e.g., Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407 (2019); Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018); AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011); Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001).  Our previous discussion of some of those decisions can be found here.

It is unclear what impact, if any, the policy withdrawal will have on the EEOC’s processing of charges. The policy had previously instructed EEOC staff to process claims regardless of whether the charging party was bound by an arbitration agreement. While this policy no longer governs, the EEOC will no doubt continue to take the position that they are empowered to pursue discrimination claims in the public interest, even if the aggrieved individual is subject to an arbitration agreement covering issues that arise in their employment.