News
Labor/Employment
Feb. 14, 2002
'Waffle House' Decision Won't Change Much for Employment Arbitration
Forum Column - By Samuel Estreicher - On Jan. 15, the U.S. Supreme Court decided a narrow issue in EEOC v. Waffle House Inc. - whether the Equal Employment Opportunity Commission, the agency responsible for administering the major federal employment discrimination statutes, is limited in its prayer for relief because Eric Baker, the charging party on whose behalf the agency brought suit, had entered into an an otherwise valid arbitration agreement requiring him to arbitrate his personal discrimination and other employment claims.
Forum Column
By Samuel Estreicher
On Jan. 15, the U.S. Supreme Court decided a narrow issue in EEOC v. Waffle House Inc. - whether the Equal Employment Opportunity Commission, the agency responsible for administering the major federal employment discrimination statutes, is limited in its prayer for relief because Eric Baker, the charging party on whose behalf the agency brought suit, had entered into an otherwise valid arbitration agreement requiring him to arbitrate his personal discrimination and other employment claims. The 6-3 majority held that the agency was not so limited: "The [Americans with Disabilities Act of 1990] specifically grants the EEOC exclusive authority over the choice of forum and the prayer for relief once a charge has been filed." The case was wrongly decided, but the practical implications will be modest for the following reasons.
Given the procedural posture of the case - neither Baker nor Waffle House, his former employer, had initiated an arbitration - the court did not decide, and expressly left open, "whether a settlement or arbitration judgment would affect the validity of the EEOC's claim or the character of the relief the EEOC may seek." In light of the court's pro-arbitration jurisprudence over the last 15 years, culminating most recently in Circuit City Stores Inc. v. Adams, 532 U.S. 105 (2001), where the court narrowly construed the Federal Arbitration Act's exclusion for employment contracts, it would seem highly unlikely that the res judicata/collateral estoppel question nominally left open in Waffle House would be answered in a manner that permitted employees to circumvent the effect of otherwise lawful waiver/settlement agreements or adjudicated arbitration awards by having the EEOC bring suit on their behalf. The lower-court case law on this point uniformly bars such relitigation, as the Waffle House dissent pointedly observed.
So what is the practical effect of the EEOC's victory in the Supreme Court? Not much, for the following reasons: First, the EEOC lacks the budget and staff to bring lawsuits in any but the smallest number of cases. And it takes a lawsuit by the EEOC, not the mere pendency of an administrative charge, to trigger the Waffle House ruling.
Second, the EEOC lacks the interest in bringing actions where employers use fair arbitration programs that conform to the so-called "Due Process Protocol" recommended by the American Bar Association, plaintiffs' bar groups and leading arbitration provider organizations. Despite the EEOC's anti-arbitration policy, which may change under the new administration, the agency knows it has enough on its plate without getting embroiled in the garden-variety, who-did-what-to-whom suits that are grist for employment lawyers and the employment arbitration mill.
What can we expect under Waffle House? For a few high profile cases where plaintiffs' lawyers try to bring class actions but are stymied by the fact that their named representatives have signed binding arbitration agreements, we may see plaintiffs' lawyers transferring the litigation to the agency to get the benefit of the Waffle House escape clause. It is unclear, however, how often this will happen, for plaintiffs' lawyers naturally will feel some reluctance to share these cases with the agency, and the EEOC cannot do this too often without straining its meager litigation resources.
One might have hoped that the court in Waffle House would have closed down this escape hatch, however slight the aperture, if only to have relayed the message to the plaintiffs' bar that the time has come to stop fighting rear-guard actions to employment arbitration. Alternate dispute resolution promises to improve the system of workplace justice for the overwhelming number of average claimants, if at the expense of the privileged few who can access the "litigation lottery."
Samuel Estreicher, professor of law and director of the center for labor and employment law at New York University and a partner with O'Melveny & Myers' New York office, co-wrote an amicus curiae brief for the Council on Employment Law Equity in the Waffle House case.
By Samuel Estreicher
On Jan. 15, the U.S. Supreme Court decided a narrow issue in EEOC v. Waffle House Inc. - whether the Equal Employment Opportunity Commission, the agency responsible for administering the major federal employment discrimination statutes, is limited in its prayer for relief because Eric Baker, the charging party on whose behalf the agency brought suit, had entered into an otherwise valid arbitration agreement requiring him to arbitrate his personal discrimination and other employment claims. The 6-3 majority held that the agency was not so limited: "The [Americans with Disabilities Act of 1990] specifically grants the EEOC exclusive authority over the choice of forum and the prayer for relief once a charge has been filed." The case was wrongly decided, but the practical implications will be modest for the following reasons.
Given the procedural posture of the case - neither Baker nor Waffle House, his former employer, had initiated an arbitration - the court did not decide, and expressly left open, "whether a settlement or arbitration judgment would affect the validity of the EEOC's claim or the character of the relief the EEOC may seek." In light of the court's pro-arbitration jurisprudence over the last 15 years, culminating most recently in Circuit City Stores Inc. v. Adams, 532 U.S. 105 (2001), where the court narrowly construed the Federal Arbitration Act's exclusion for employment contracts, it would seem highly unlikely that the res judicata/collateral estoppel question nominally left open in Waffle House would be answered in a manner that permitted employees to circumvent the effect of otherwise lawful waiver/settlement agreements or adjudicated arbitration awards by having the EEOC bring suit on their behalf. The lower-court case law on this point uniformly bars such relitigation, as the Waffle House dissent pointedly observed.
So what is the practical effect of the EEOC's victory in the Supreme Court? Not much, for the following reasons: First, the EEOC lacks the budget and staff to bring lawsuits in any but the smallest number of cases. And it takes a lawsuit by the EEOC, not the mere pendency of an administrative charge, to trigger the Waffle House ruling.
Second, the EEOC lacks the interest in bringing actions where employers use fair arbitration programs that conform to the so-called "Due Process Protocol" recommended by the American Bar Association, plaintiffs' bar groups and leading arbitration provider organizations. Despite the EEOC's anti-arbitration policy, which may change under the new administration, the agency knows it has enough on its plate without getting embroiled in the garden-variety, who-did-what-to-whom suits that are grist for employment lawyers and the employment arbitration mill.
What can we expect under Waffle House? For a few high profile cases where plaintiffs' lawyers try to bring class actions but are stymied by the fact that their named representatives have signed binding arbitration agreements, we may see plaintiffs' lawyers transferring the litigation to the agency to get the benefit of the Waffle House escape clause. It is unclear, however, how often this will happen, for plaintiffs' lawyers naturally will feel some reluctance to share these cases with the agency, and the EEOC cannot do this too often without straining its meager litigation resources.
One might have hoped that the court in Waffle House would have closed down this escape hatch, however slight the aperture, if only to have relayed the message to the plaintiffs' bar that the time has come to stop fighting rear-guard actions to employment arbitration. Alternate dispute resolution promises to improve the system of workplace justice for the overwhelming number of average claimants, if at the expense of the privileged few who can access the "litigation lottery."
Samuel Estreicher, professor of law and director of the center for labor and employment law at New York University and a partner with O'Melveny & Myers' New York office, co-wrote an amicus curiae brief for the Council on Employment Law Equity in the Waffle House case.
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