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Arbitration Agreement No Bar To EEOC Judicial Releif

The U.S. Supreme Court held an arbitration agreement made by a restaurant and its employee does not prevent the Equal Employment Opportunity Commission (EEOC) from pursuing judicial relief, once a charge is filed with the Commission, in EEOC v. Waffle House, 2002 WL 46763 (2002).  The Court, in a 6-3 decision, found the EEOC is not bound by a private arbitration agreement to which it was not a party.  The opinion noted the federal policy favors arbitration, however “the EEOC has the authority to pursue victim-specific relief regardless of the forum that the employer and the employee have chosen to resolve their disputes.”  In addition, the Court pointed out Title VII of the 1964 Civil Rights Act specifically grants the EEOC exclusive authority over the choice of forum and the requested relief, once a charge has been filed. 

The Court refused to decide whether an arbitration judgment or settlement would affect an EEOC claim, or the relief requested by the EEOC, calling it an “open question.”  The decision most likely will not severely impact employer use of arbitration agreements, since the EEOC chooses to litigate only 300-400 cases per year.  Nevertheless, the opinion will encourage employees to file charges with the Commission, even if a party to an arbitration agreement.