6/16/08
In EEOC v. Ralphs Grocery Co., the Equal Employment Opportunity Commission claimed that a Chicago area grocery company's arbitration program unlawfully obstructed employees from filing discrimination charges because it required employees to first submit such claims to arbitration. The EEOC further claimed that the Company unlawfully retaliated against an employee by filing suit to compel her to arbitrate her discrimination claim.
On May 22, 2008, the case was resolved through a consent decree that includes significant concessions by the Company. Specifically, the consent decree requires the Company to revise its arbitration agreement to specify that employees have an unrestricted right to file discrimination charges. The Company also agreed to post a notice of this right at each of its locations and to make all employee requests for arbitration available to the EEOC for the following two years. In addition, the consent decree required the Company to waive the statute of limitations period for discrimination charges, notify its employees and former employees of their extended right to file discrimination charges, and pay a sum of $70,000 to the individual employee it sought to enforce its arbitration agreement against.
Employment agreements requiring employees to arbitrate or waive discrimination charges have been common practice for employers. As demonstrated by this case, the EEOC is willing to challenge these employment practices as retaliatory where employment agreements preclude the filing of discrimination charges. For this reason, employers should carefully reevaluate their employment agreements. Employment agreements should not restrict an employee's right to file a discrimination charge.
