Do you require employees to sign an agreement to arbitrate workplace disputes as a condition of employment? If so, you don’t lose the right to force the case into arbitration if you don’t ask for it during an EEOC investigation.
You can, in fact, wait until the employee files a lawsuit and then ask the court to send the case to an arbitrator, according to a recent 8th Circuit Court of Appeals decision.
That’s good news, because many cases can be settled with the EEOC before anyone has to spend the money and time necessary to resolve a case through arbitration.
Recent case: Robert McNamara worked for Yellow Transportation for 23 years until he was discharged for allegedly breaking company rules and creating a hostile work environment.
McNamara claimed he was fired in retaliation for taking and for complaining that his boss favored women.
McNamara filed an EEOC complaint, and the company cooperated. The EEOC then told McNamara he could file his federal lawsuit.
It was then that Yellow Transportation said it wanted to enforce its arbitration agreement. McNamara admitted he had received a copy of the agreement back in 2001. The agreement specified that agreeing to arbitrate was a condition of employment.
McNamara tried to argue that the company lost the right to demand arbitration when it didn’t ask the EEOC to send the case to arbitration.
The 8th Circuit Court of Appeals didn’t agree. It said that since the EEOC can investigate allegations whether the case ends up in arbitration or not, it makes no sense to send the case to arbitration at the same time it is being handled by the EEOC. Employers can wait until the lawsuit is filed. (McNamara v. Yellow Transportation, No. 08-2654, 8th Cir., 2009)
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