In a decision that may have significant implications for employment discrimination claims, the U.S. Court of Appeals for the Second Circuit ruled on March 21, 2013 that employees who have signed arbitration agreements with their employers may be barred from litigating Title VII “pattern-or-practice” discrimination claims.  In Parisi v. Goldman Sachs & Co., the court held that Title VII does not grant employees a substantive statutory right to bring pattern-or-practice discrimination claims.  “Pattern-or-practice” simply refers to a method of proof and does not constitute a “freestanding cause of action.”  Accordingly, arbitration agreements prohibiting class actions, which include pattern-or-practice discrimination claims, do not impermissibly preclude employees from vindicating substantive statutory rights and will be enforced.

The Second Circuit’s decision confirms that employee arbitration agreements may provide employers with an important tool to avoid class action discrimination claims.  However, the decision does not prohibit employees from using pattern-or-practice evidence to establish individual discrimination claims and does not affect the Equal Employment Opportunity Commission’s authority to pursue pattern-or-practice claims on behalf of a class of employees.