A federal court considering whether a broad arbitration clause included in an employment contract bars discrimination and retaliation claims has concluded it does.
That’s good news if you use employment contracts and want to push any subsequent employment-related claims into arbitration.
Recent case: James, who is black, worked for several years for a record company. When he discovered that others at competing labels were paid more, he negotiated a higher salary.
The label insisted on a written employment contract and included an arbitration clause in the agreement purporting to cover “all claims, disputes and other matters in question between the parties to this Agreement arising out of or in any way relating to this Agreement or the breach thereof.”
Then James was demoted and complained to HR. Within days, the label terminated him.
He sued, alleging race discrimination and retaliation for going to HR. But he also sought arbitration of other aspects of the employment agreement.
The record label asked the court to send everything to arbitration.
The court did. It reasoned that a broad clause specifying that disputes would be settled in arbitration also covers discrimination and retaliation. (Robinson v. Entertainment One, No. 14-CV-1203, SD NY, 2015)
Final note: Get expert legal help with employment contracts and arbitration agreements. They aren’t do-it-yourself projects.
Your goal: Making sure you don’t end up litigating twice—once in federal court to determine if the agreement is valid and then again in arbitration.