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EEOC Changes Perspective on Mandatory Arbitration

In 1997, the Equal Employment Opportunity Commission (EEOC) issued a policy statement regarding mandatory arbitration in Employment Discrimination Disputes. Agreements mandating binding arbitration of discrimination claims as a condition of employment were considered “contrary to the fundamental principles” reflected in the employment discrimination laws enforced by the Commission.
Recently, the EEOC has posted a change to that policy on its website entitled the “Recission of Mandatory Bind Arbitration of Employment Discrimination Disputes as a Condition of Employment.” Noting that the Supreme Court has upheld arbitration of employment-related disputes under the Federal Arbitration Act since the issuance of the 1997 policy statement, the EEOC also points to the Court’s rejection of concerns about arbitration for employment discrimination. Because of these decisions, the EEOC has concluded that its 1997 policy is at odds with current law and should not be relied upon by the EEOC in investigations or litigation.
However, ​following case law on the issue, the EEOC will continue to accept charges of discrimination even when a mandatory arbitration agreement exists. “Case law also now makes clear that the EEOC continues to be fully available to employees as an avenue to assert EEO rights and to investigate in the public interest, regardless of whether the parties have entered into an enforceable arbitration agreement.”