EEOC Retracts Arbitration Opposition

January 10, 2020

The Equal Employment Opportunity Commission has rescinded its 22-year-old arbitration policy opposing mandatory arbitration agreements because it does not reflect current case law, including numerous Supreme Court decisions.

The 1997 policy statement concluded that mandatory arbitration “harm both the individual civil rights claimant and the public interest in eradicating discrimination.”  It also stated that employers “the law seeks to regulate should not be permitted to exempt themselves from federal enforcement of civil rights laws.  Nor should they be permitted to deprive civil rights claimants of the choice to vindicate their statutory rights in the courts.”

Regardless of any arbitration agreement, the EEOC continues to be fully available to employees as an avenue to assert EEO rights and to investigate in the public interest.

Outlook:  While the rescission will have little practical impact on employers, several bills have been introduced in Congress to limit or prohibit mandatory arbitration agreements.  EEOC’s action along with courts continuing to strike down state prohibitions on these agreements is likely to increase political pressure to enact some bipartisan federal legislation.