The Labor & Employment Blog is a forum for practitioners and Bloomberg BNA editors to share ideas, raise issues, and network with colleagues.
Monday, April 8, 2013
by Patrick Dorrian
The mandatory arbitration of employment discrimination claims has long been a source of contention between employers and employees, as well as the plaintiffs' and management bar. Forced arbitration deprives workers of the full protection of their statutory rights to be free from bias in the workplace, employees and their lawyers argue, while employers and their attorneys contend that arbitration is a necessary, cost-effective way to quickly resolve the ever-larger volume of job discrimination claims they face.
Legal issues surrounding whether and when class claims may be arbitrated has only added to the fight. Employees are seeking class arbitration as a way to ban together to limit what they say are the onerous costs of individual arbitration. But employers counter that allowing class arbitration strips the arbitration process of its benefits: lower costs and more expeditious resolutions.
The U.S. Court of Appeals for the Second Circuit is the latest federal appellate court to weigh in on class arbitration, holding in Parisi v. Goldman, Sachs & Co. that a former managing director of the investment bank could not pursue a pattern-or-practice claim on behalf of herself and a class of similarly situated female employees under Title VII of the 1964 Civil Rights Act.
Finding that the term "pattern or practice" only describes a method of proof, the appeals court rejected the managing director's contention that Title VII gives rise to a substantive pattern-or-practice claim that can only be resolved through class proceedings.
The arbitration aspect of the case was raised by the fact that the managing director had signed an agreement to arbitrate any employment disputes with Goldman, and that agreement was silent as to whether class arbitration would be permitted.
The Second Circuit found that in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., the U.S. Supreme Court held that the class arbitration of claims is prohibited where an arbitration provision is silent as to classwide arbitration.
In a separate development, the issue of class arbitration also is back before the Supreme Court, which recently heard oral argument regarding the standard for reviewing an arbitrator's decision to permit class arbitration.
The case, Oxford Health Plans LLC v. Sutter, arises in the healthcare context, but it is worth watching as the justices' decision is expected to build on Stolt-Nielsen and may have important ramifications for employment arbitration.
Other recent EEO developments include:
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