Mandatory Arbitration of Discrimination Claims

Many employers require applicants and employees to agree to arbitrate such claims to avoid litigation. The EEOC does not favor mandatory arbitration. However, the U.S. Supreme Court’s decisions make it clear that employment discrimination plaintiffs may be compelled to arbitrate their claims under some circumstances.

Given this, employers may wish to consider inserting a mandatory arbitration clause in their employment applications or employee handbooks. To protect such a process against appeal, the employer should institute steps to protect against arbitrator bias, allow the arbitrator to offer a claimant broad relief, and allow for a reasonable amount of pre-hearing fact finding. Alternative dispute resolution or ADR is a grievance procedure that provides for binding arbitration as the last step.