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Employee arbitration mandates have limitations

It's becoming increasingly popular for employers to make signing an arbitration agreement mandatory for employees. By signing such agreements, employees often waive the right to file a complaint or lawsuit with a court or governing entity. Instead, employees must present complaints before a binding arbitration committee who makes a final decision in the case.

Employers are going to such agreements because it helps cut down on litigation costs and reduces the number of complaints made to certain government entities. However, arbitration agreements can't stop employees from making complaints or reports to certain agencies, including the Equal Employment Opportunity Commission.

While the EEOC doesn't file a lot of lawsuits compared to the number of complaints it gets annually, it does seek to protect an employee's ability to make those complaints. A recent report states that the EEOC has filed suit against Doherty Enterprises, which is a corporation managing chains such as Panera Bread. According to the complaint, the company has an arbitration agreement that does not include a carve-out for EEOC-related reports.

The lawsuit is still pending, but the court has ruled that the EEOC has standing to file the case, which could be a problem for other companies. Experts are advising companies to ensure mandatory arbitration agreements don't block employees from making reports to the EEOC.

When dealing with any type of employment dispute--or tool to manage those disputes--companies should seek experienced advice. It's important to deal with issues in a legal and timely way, but organizations must also understand the legal implications of actions for the future. Sometimes, a one-sized-fits-all approach isn't the best answer.

Source: Forbes, "Employers, Don't Forget The EEOC Carve-Out In Your Mandatory Arbitration Agreement," Richard Tuschman, Sep. 14, 2015

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