Supreme Court To Consider Second Arbitration Issue

March 26, 2001 ( - Having ruled in support of employer arbitration agreements, the Supreme Court has agreed to decide whether such agreements also bar government agencies getting involved.

About 10% of American workers are reportedly covered by arbitration agreements.

The nation’s highest court Monday agreed to hear an appeal by the Equal Employment Opportunity Commission (EEOC), which claims it should be allowed to obtain victim-specific relief, including back pay, reinstatement and damages. 

Last week the Supreme Court ruled in a 5-4 decision that arbitration agreements can be enforced in most employment contracts, rather than an employee going straight to court to seek a remedy.

The Case At Hand

The case at hand is an appeal from the 4th US Circuit Court of Appeals which held that the EEOC could not seek relief on behalf of workers covered by arbitration agreements.  The original case involved Eric Baker, who had a seizure disorder and was fired in 1994 from a Waffle House restaurant in West Columbia, South Carolina.  Baker filed a complaint with the EEOC alleging his discharge violated the Americans with Disabilities Act, but did not submit an arbitration claim.

The EEOC then brought its own enforcement action on behalf of Baker, alleging that Waffle House had engaged in unlawful employment practices on the basis of disability.

Waffle House argued the case should be decided in arbitration, as called for in the arbitration agreement it required of job applicants.  The 4th Circuit said that the agreement did not prevent the EEOC from getting involved, but said it could not seek damages specific to Baker’s case.  The court said that the EEOC could sue to stop the alleged workplace bias.
The Supreme Court is expected to rule on the case during their next term, which begins in October.

There is one item that impacted the lower court ruling, but is not expected to influence the Supreme Court decision.  Baker applied and  signed the arbitration agreement at one Waffle House, but was hired at a different location without filling out a new application.

The case is Equal Employment Opportunity Commission v. Waffle House, 99-1823.