Tags: Supreme | Court | Facilitates | Employee | Lawsuits

Supreme Court Facilitates Employee Lawsuits

Tuesday, 15 January 2002 12:00 AM

The EEOC can act, the court majority said, even if the employees signed contracts mandating the use of arbitration rather than the courts in disputes with employers.

The case, out of South Carolina, had been closely watched by businesses, particularly because of a 5-4 Supreme Court ruling last spring that said most American workers can be forced into arbitration when they sign employment contracts that include arbitration clauses.

In the case earlier this term, the narrow majority said the plain language of the Federal Arbitration Act required employees to submit to arbitration, when their contracts called for it, rather than take their cases to court.

Employers generally prefer arbitration to the courts, where juries can award large damages.

The earlier decision, in Circuit City vs. Adams, appeared to close the federal courts to employees who had signed the contracts, an increasing number of American working men and women.

However, Circuit City did not address the issue of the EEOC going to court for the employee.

A 1972 amendment to the 1964 Civil Rights Act established a two-track system of private and public enforcement.

Before a private person could bring suit against an employer for some type of alleged discrimination, under the amended law that person would have to file a complaint with the EEOC. If the commission believes the complaint has merit, it first must try to remedy the situation outside of the courts.

If that doesn't work, however, the EEOC may choose to go to court on its own hook to enforce an employee's rights. An individual can intervene, or join, the suit, but the employee can't file his own action if the EEOC suit is continuing.

On the other hand, if the EEOC declines to file a suit, then the employee has the right to bring their own lawsuit under the Civil Rights Act. The federal agency still has the right to join the employee-filed suit at some future time.

The Supreme Court apparently granted review in the present case to resolve the conflict between that legal avenue and the earlier decision in Circuit City.

The underlying facts of the current case involve Eric Scott Baker, who in June 1994 applied for employment with a Waffle House in Columbia, S.C.

His employer-supplied application form included a section saying any dispute with the prospective employer "will be settled by binding arbitration."

He was hired at a nearby Waffle House in West Columbia, S.C., apparently without filling out a separate application.

However, Baker had a seizure disorder. While on the job in August 1994, he suffered a 30-second seizure, then went home for the day. His manager told him not to report back to work because of his condition, according to court records, and he was fired that September.

Baker then filed a complaint with the EEOC saying his firing violated the federal Americans with Disabilities Act. The act, among other things, requires employers to accommodate disabled employees when it is "reasonable" to do so.

The EEOC in turn filed a petition with a federal magistrate on Baker's behalf. The magistrate subsequently recommended that Baker be compelled to enter arbitration. A federal judge disagreed, concluding that there had been no arbitration agreement because Baker had not filled out a second application with the West Columbia facility.

Waffle House filed an appeal of the judge's decision not to dismiss the case and compel arbitration. A divided appeals court panel ruled that there indeed had been an arbitration agreement, despite the judge's ruling.

And the appeals court said that agreement limited the EEOC's ability to go to court on his behalf, even though the EEOC was not a party to the agreement.

The Justice Department, acting for the EEOC, then asked the Supreme Court for review.

Tuesday, the Supreme Court majority reversed the appeals court.

"The only issue before this court is whether the fact that Baker has signed a mandatory arbitration agreement limits the remedies available to the EEOC," Justice John Paul Steven said in the majority opinion.

"The text of the relevant statutes provides a clear answer to that question," Stevens said. "They do not authorize the courts to balance the competing polices of the [Americans with Disabilities Act] and the [Federal Arbitration Act], or to second-guess the [EEOC's] judgment concerning which of the remedies authorized by law it shall seek in any given case."

Justice Clarence Thomas dissented, joined by Chief Justice William Rehnquist and Justice Antonin Scalia.

"Absent explicit statutory authorization to the contrary," Thomas said, "I cannot agree that the EEOC may do on behalf of an employee that which an employee has agreed not to do for himself."

Tuesday's decision reverses the appeals court and sends the case back down for a new ruling based on the high court's decision.

(No. 99-1823, EEOC vs. Waffle House)

Copyright 2002 by United Press International.

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The EEOC can act, the court majority said, even if the employees signed contracts mandating the use of arbitration rather than the courts in disputes with employers. The case, out of South Carolina, had been closely watched by businesses, particularly because of a 5-4...
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