On Dec. 16, 2019, the Equal Employment Opportunity Commission (EEOC) rescinded its 1997 policy statement on “Mandatory Binding Arbitration of Employment Discrimination Disputes as a Condition of Employment (the 1997 Policy Statement), which had articulated the agency’s position against pre-dispute arbitration agreements on the grounds that such agreements violate public policy and undermine the enforcement of anti-discrimination laws.
As noted in a release published on the EEOC's website, the 1997 Policy Statement conflicts with many subsequent Supreme Court opinions holding that mandatory arbitration agreements of employment discrimination and other claims are enforceable pursuant to the Federal Arbitration Act. See, e.g., Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018); AT&T Mobility v. Concepcion, 563 U.S. 333 (2011); Circuit City Stores v. Adams, 532 U.S. 105 (2001). Accordingly, the EEOC has now instructed its staff to no longer rely upon the 1997 Policy Statement in investigations and litigation. The EEOC’s release further notes that the rescission should not be construed to “limit the ability of the Commission or any other party to challenge the enforceability of a particular arbitration agreement.”
The withdrawal of the policy statement is not expected to have a substantial effect on current practices, given that courts have consistently enforced pre-dispute agreements to arbitrate employment claims. Nonetheless, it is notable given recent legislative efforts in New York (see our prior alert) and elsewhere to ban mandatory arbitration of discrimination claims.