The U.S. Equal Employment Opportunity Commission

Number 915.002 
Date July 10, 1997

1.   SUBJECT:  Policy Statement on Mandatory Binding Arbitration 
of Employment Discrimination Disputes as a Condition of 

2.   PURPOSE: This policy statement sets out the Commission’s 
policy on the mandatory binding arbitration of employment 
discrimination disputes imposed as a condition of employment.

3.   EFFECTIVE DATE:  Upon issuance.

4.   EXPIRATION DATE: As an exception to EEOC Order 205.001, 
Appendix B, Attachment 4, § a(5), this Notice will remain in 
effect until rescinded or superseded.

5.   ORIGINATOR: Coordination and Guidance Programs, Office of 
Legal Counsel.

6.   INSTRUCTIONS:  File in Volume II of the EEOC Compliance 


     The United States Equal Employment Opportunity Commission 
(EEOC or Commission), the federal agency charged with the 
interpretation and enforcement of this nation’s employment 
discrimination laws, has taken the position that agreements that 
mandate binding arbitration of discrimination claims as a 
condition of employment are contrary to the fundamental 
principles evinced in these laws.  EEOC Motions on Alternative 
Dispute Resolution, Motion 4 (adopted Apr. 25, 1995), 80 Daily 
Lab. Rep. (BNA) E-1 (Apr. 26, 1995).1  This policy statement sets 
out in further detail the basis for the Commission’s position.

I.  Background

     An increasing number of employers are requiring as a 
condition of employment that applicants and employees give up 
their right to pursue employment discrimination claims in court 
and agree to resolve disputes through binding arbitration.  These 
agreements may be presented in the form of an employment contract 
or be included in an employee handbook or elsewhere.  Some 
employers have even included such agreements in employment 
applications.  The use of these agreements is not limited 

to particular industries, but can be found in various sectors of 
the workforce, including, for example, the securities industry, 
retail, restaurant and hotel chains, health care, broadcasting, 
and security services.     Some individuals subject to mandatory 
arbitration agreements have challenged the enforceability of 
these agreements by bringing employment discrimination actions in 
the courts.  The Commission is not unmindful of the case law 
enforcing specific  mandatory arbitration agreements, in 
particular, the Supreme Court’s decision  in Gilmer v. 
Interstate/Johnson Lane Corp., 500 U.S. 33 (1991).2 Nonetheless, 
for the reasons stated herein, the Commission believes that such 
agreements are inconsistent with the civil rights laws.  

II.      The Federal Civil Rights Laws Are Squarely Based In This 
Nation’s History And Constitutional Framework And Are Of A 
Singular National Importance

     Federal civil rights laws, including the laws prohibiting 
discrimination in employment, play a unique role in American 
jurisprudence.  They flow directly from core Constitutional 
principles, and this nation's history testifies to their 
necessity and profound importance.  Any analysis of the mandatory 
arbitration of rights guaranteed by the employment discrimination 
laws must, at the outset, be squarely based in an understanding 
of the history and purpose of these laws.  

     Title VII of the historic Civil Rights Act of 1964, 42 
U.S.C. § 2000e et seq., was enacted to ensure equal 
opportunity in employment, and to secure the fundamental right to 
equal protection guaranteed by the Fourteenth Amendment to the 
Constitution.3 Congress considered this national policy against 
discrimination to be of the "highest priority" (Newman v. Piggie 
Park Enters., 390 U.S. 400, 402 (1968)), and of "paramount 
importance"  (H.R. Rep. No. 88-914, pt. 2 (1963) (separate views 
of Rep. McCulloch et al.)),4 reprinted in 1964 Leg. Hist. at 
2123.5  The Civil Rights Act of 1964, 42 U.S.C. § 2000a et 
seq., was intended to conform "[t]he practice of American 
democracy . . . to the spirit which motivated the Founding 
Fathers of this Nation -- the ideals of freedom, equality, 
justice, and opportunity."  H.R. Rep. No. 88-914, pt. 2 (1963) 
(separate views of Rep. McCulloch et al.), reprinted in 1964 Leg. 
Hist. at 2123.  President John F. Kennedy, in addressing the 
nation regarding his intention to introduce a comprehensive civil 
rights bill, stated the issue as follows:

     We are confronted primarily with a moral issue.  It is as
     old as the Scriptures and it is as clear as the American

     The heart of the question is whether all Americans are to be
     afforded equal rights and equal opportunities, whether we
     are going to treat our fellow Americans as we want to be

President John F. Kennedy's Radio and Television Report to the 
American People on Civil Rights (June 11, 1963), Pub. Papers 468, 
469 (1963).6

     Title VII is but one of several federal employment 
discrimination laws enforced by the Commission which are "part of 
a wider statutory scheme to protect employees in the workplace 
nationwide," McKennon v. Nashville Banner Publ'g Co., 513 U.S. 
352, 357 (1995).  See the Equal Pay Act of 1963 ("EPA"), 29 
U.S.C. § 206(d); the Age Discrimination in Employment Act of 
1967 ("ADEA"), 29 U.S.C. §§ 621 et seq.; and the 
Americans with Disabilities Act of 1990 ("ADA"), 42 U.S.C. 
§§ 12101 et seq.  The ADEA was enacted "as part of an 
ongoing congressional effort to eradicate discrimination in the 
workplace" and "reflects a societal condemnation of invidious 
bias in employment decisions."  McKennon, 513 U.S. at 357.  The 
ADA explicitly provides that its purpose is, in part, to invoke 
congressional power to enforce the Fourteenth Amendment.  29 
U.S.C. § 12101(b)(4).  Upon signing the ADA, President 
George Bush remarked that "the American people have once again 
given clear expression to our most basic ideals of freedom and 
equality."  President George Bush's Statement on Signing the 
Americans with Disabilities Act of 1990 (July 26, 1990), Pub. 
Papers 1070 (1990 Book II).  

III.     The Federal Government Has The Primary Responsibility 
For The Enforcement Of The Federal Employment Discrimination Laws

     The federal employment discrimination laws implement 
national values of the utmost importance through the institution 
of public and uniform standards of equal opportunity in the 
workplace.  See text and notes supra in Section II.  Congress 
explicitly entrusted the primary responsibility for the 
interpretation, administration,  and enforcement of these 
standards, and the public values they embody, to the federal 
government.  It did so in three principal ways.  First, it 
created the Commission, initially giving it authority to 
investigate and conciliate claims of discrimination and to 
interpret the law, see §§ 706(b) and 713 of Title VII, 
42 U.S.C. §§ 2000e-5(b) and 2000e-12, and subsequently 
giving it litigation authority in order to bring cases in court 
that it could not administratively resolve, see § 706(f)(1) 
of Title VII, 42 U.S.C. § 2000e-5(f)(1).  Second, Congress 
granted certain enforcement authority to the Department of 
Justice, principally with regard to the litigation of cases 
involving state and local governments.  See §§ 
706(f)(1) and 707 of Title VII, 42 U.S.C. §§ 2000e-
5(f)(1) and 2000e-6.  Third, it established a private right of 
action to enable aggrieved individuals to bring their claims 
directly in the federal courts, after first administratively 
bringing their claims to the Commission.  See § 706(f)(1) of 
Title VII, 42 U.S.C. § 2000e-5(f)(1).7

     While providing the states with an enforcement role, see 42 
U.S.C. §§ 2000e-5(c) and (d), as well as recognizing 
the importance of voluntary compliance by employers, see 42 
U.S.C. § 2000e-5(b), Congress emphasized that it is the 
federal government that has ultimate enforcement responsibility.  
As Senator Humphrey stated, "[t]he basic rights protected by 
[Title VII] are rights which accrue to citizens of the United 
States; the Federal Government has the clear obligation to see 
that these rights are fully protected."  110 Cong. Rec. 12725 
(1964).  Cf. General Tel. Co. v. EEOC, 446 U.S. 318, 326 (1980) 
(in bringing enforcement actions under Title VII, the EEOC "is 
guided by 'the overriding public interest in equal employment 
opportunity . . . asserted through direct Federal enforcement'") 
(quoting 118 Cong. Rec. 4941 (1972)). 

      The importance of the federal government's role in the 
enforcement of the civil rights laws was reaffirmed by Congress 
in the ADA, which explicitly provides that its purposes include 
"ensur[ing] that the Federal Government plays a central role in 
enforcing the standards established in [the ADA] on behalf of 
individuals with disabilities."  42 U.S.C. § 12101(b)(3).

IV.     Within This Framework, The Federal Courts Are Charged 
With The Ultimate Responsibility For Enforcing The Discrimination 

     While the Commission is the primary federal agency 
responsible for enforcing the employment discrimination laws, the 
courts have been vested with the final responsibility for 
statutory enforcement through the construction and interpretation 
of the statutes, the adjudication of claims, and the issuance of 
relief.8  See, e.g., Kremer v. Chemical Constr. Corp., 454 U.S. 
461, 479 n.20 (1982) ("federal courts were entrusted with 
ultimate enforcement responsibility" of Title VII); New York 
Gaslight Club, Inc. v. Carey, 447 U.S. 54, 64 (1980) ("Of course 
the 'ultimate authority' to secure compliance with Title VII 
resides in the federal courts").9

     A.     The Courts Are Responsible For The Development And 
Interpretation Of The Law

     As the Supreme Court emphasized in Alexander v. Gardner-
Denver Co., 415 U.S. 36, 57 (1974), "the resolution of statutory 
or constitutional issues is a primary responsibility of courts, 
and judicial construction has proved especially necessary with 
respect to Title VII, whose broad language frequently can be 
given meaning only by reference to public law concepts."  This 
principle applies equally to the other employment discrimination 

     While the statutes set out the basic parameters of the law, 
many of the fundamental legal principles in discrimination 
jurisprudence have been developed through judicial 
interpretations and case law precedent. Absent the role of the 
courts, there might be no discrimination claims today based on, 
for example, the adverse impact of neutral practices not 
justified by business necessity, see Griggs v. Duke Power Co., 
401 U.S. 424 (1971), or sexual harassment, see Harris v. Forklift 
Sys., Inc., 510 U.S. 17 (1993); Meritor Savings Bank, FSB v. 
Vinson, 477 U.S. 57 (1986).  Yet these two doctrines have proved 
essential to the effort to free the workplace from unlawful 
discrimination, and are broadly accepted today as key elements of 
civil rights law.

     B.     The Public Nature Of The Judicial Process Enables The 
Public, Higher Courts, And Congress To Ensure That The 
Discrimination Laws Are Properly Interpreted And Applied

     Through its public nature -- manifested through published 
decisions -- the exercise of judicial authority is subject to 
public scrutiny and to system-wide checks and balances designed 
to ensure uniform expression of and adherence to statutory 
principles.  When courts fail to interpret or apply the 
antidiscrimination laws in accord with the public values 
underlying them, they are subject to correction by higher level 
courts and by Congress. 

     These safeguards are not merely theoretical, but have 
enabled  both the Supreme Court and Congress to play an active 
and continuing role in the development of employment 
discrimination law.  Just a few of the more recent Supreme Court 
decisions overruling lower court errors include:  Robinson v. 
Shell Oil Co., 117 S. Ct. 843 (1997) (former employee may bring a 
claim for retaliation); O'Connor v. Consolidated Coin Caterers, 
Corp., 116 S. Ct. 1307 (1996) (comparator in age discrimination 
case need not be under forty); McKennon, 513 U.S. 352 (employer 
may not use after-acquired evidence to justify discrimination); 
and Harris 510 U.S. 17 (no requirement that sexual harassment 
plaintiffs prove psychological injury to state a claim).  

     Congressional action to correct Supreme Court departures 
from congressional intent has included, for example, legislative 
amendments in response to Court rulings that:  pregnancy 
discrimination is not necessarily discrimination based on sex 
(General Elec. Co. v. Gilbert, 429 U.S. 125 (1978), and Nashville 
Gas Co. v. Satty, 434 U.S. 136 (1977), overruled by Pregnancy 
Discrimination Act of 1978); that an employer does not have the 
burden of persuasion on the business necessity of an employment 
practice that has a disparate impact (Wards Cove Packing Co. v. 
Atonio, 490 U.S. 642 (1989), overruled by §§ 104 and 
105 of the Civil Rights Act of 1991); that an employer avoids 
liability by showing that it would have taken the same action 
absent any discriminatory motive (Price Waterhouse v. Hopkins, 
490 U.S. 228 (1989), overruled, in part, by § 107 of the 
Civil Rights Act of 1991); that mandatory retirement pursuant to 
a benefit plan in effect prior to enactment of the ADEA is not 
prohibited age discrimination (United Air Lines, Inc. v. McMann, 
434 U.S. 192 (1977), overruled by 1978 ADEA amendments); and, 
that age discrimination in fringe benefits is not unlawful 
(Public Employees Retirement Sys. of Ohio v. Betts, 492 U.S. 158 
(1989), overruled by Older Workers Benefits Protection Act of 

     C.     The Courts Play A Crucial Role In Preventing And 
Deterring Discrimination And In Making Discrimination Victims 

     The courts also play a critical role in preventing and 
deterring violations of the law, as well as providing remedies 
for discrimination victims.  By establishing precedent, the 
courts give valuable guidance to persons and entities covered by 
the laws regarding their rights and responsibilities, enhancing 
voluntary compliance with the laws.  By awarding damages, 
backpay, and injunctive relief as a matter of public record, the 
courts not only compensate victims of discrimination, but provide 
notice to the community, in a very tangible way, of the costs of 
discrimination. Finally, by issuing public decisions and orders, 
the courts also provide notice of the identity of violators of 
the law and their conduct.  As has been illustrated time and 
again, the risks of negative publicity and blemished business 
reputation can be powerful influences on behavior.

     D.     The Private Right Of Action With Its Guarantee Of 
Individual Access To The Courts Is Essential To The Statutory 
Enforcement Scheme     

      The private right of access to the judicial forum to 
adjudicate claims is an essential part of the statutory 
enforcement scheme.   See, e.g., McKennon, 513 U.S. at 358 
(granting a right of action to an injured employee is "a vital 
element" of Title VII, the ADEA, and the EPA).  The courts cannot 
fulfill their enforcement role if individuals do not have access 
to the judicial forum.  The Supreme Court has cautioned that, 
"courts should ever be mindful that Congress . . . thought it 
necessary to provide a judicial forum for the ultimate resolution 
of discriminatory employment claims.  It is the duty of courts to 
assure the full availability of this forum."  Gardner-Denver, 415 
U.S. at 60 n.21.10

     Under the enforcement scheme for the federal employment 
discrimination laws, individual litigants act as "private 
attorneys general."  In bringing a claim in court, the civil 
rights plaintiff serves not only her or his private interests, 
but also serves as "the chosen instrument of Congress to 
vindicate 'a policy that Congress considered of the highest 
priority.'"  Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 
418 (1978) (quoting Newman v. Piggie Park Enters., Inc., 390 U.S. 
400, 402 (1968)).  See also McKennon, 513 U.S. at 358 ("[t]he 
private litigant who seeks redress for his or her injuries 
vindicates both the deterrence and compensation objectives  of 
the ADEA").

V.     Mandatory Arbitration Of Employment Discrimination 
Disputes "Privatizes" Enforcement Of The Federal Employment 
Discrimination Laws, Thus Undermining Public Enforcement Of The 

     The imposition of mandatory arbitration agreements as a 
condition of employment substitutes a private dispute resolution 
system for the public justice system intended by Congress to 
govern the enforcement of the employment discrimination laws.  
The private arbitral system differs in critical ways from the 
public judicial forum and, when imposed as a condition of 
employment, it is structurally biased against applicants and 

     A.     Mandatory Arbitration Has Limitations That Are 
Inherent And Therefore Cannot Be Cured By The Improvement Of 
Arbitration Systems

      That arbitration is substantially different from litigation 
in the judicial forum is precisely the reason for its use as a 
form of ADR.  Even the fairest of arbitral mechanisms will differ 
strikingly from the judicial forum.  

          1.     The Arbitral Process Is Private In Nature And 
Thus Allows For Little Public Accountability

     The nature of the arbitral process allows -- by design -- 
for minimal, if any, public accountability of arbitrators or 
arbitral decision-making.  Unlike her or his counterparts in the 
judiciary, the arbitrator answers only to the private parties to 
the dispute, and not to the public at large.  As the Supreme 
Court has explained:  

     A proper conception of the arbitrator's function is basic. 
     He is not a public tribunal imposed upon the parties by
     superior authority which the parties are obliged to accept. 

     He has no general charter to administer justice for a
     community which transcends the parties.  He is rather part
     of a system of self-government created by and confined to
     the parties. . . .

United Steelworkers of Am. v. Warrior and Gulf Navigation Co., 
363 U.S. 574, 581 (1960) (quoting from Shulman, Reason, Contract, 
and Law in Labor Relations, 68 Harv. L. Rev. 999, 1016 (1955)).

     The public plays no role in an arbitrator's selection; s/he 
is hired by the private parties to a dispute.  Similarly, the 
arbitrator's authority is defined and conferred, not by public 
law, but by private agreement.11  While the courts are charged 
with giving force to the public values reflected in the 
antidiscrimination laws, the arbitrator proceeds from a far 
narrower perspective:  resolution of the immediate dispute.  As 
noted by one commentator, "[a]djudication is more likely to do 
justice than . . . arbitration . . . precisely because it vests 
the power of the state in officials who act as trustees for the 
public, who are highly visible, and who are committed to reason."
Owen Fiss, Out of Eden, 94 Yale L.J.  1669, 1673 (1985).
     Moreover, because decisions are private, there is little, if 
any, public accountability even for employers who have been 
determined to have violated the law.  The lack of public 
disclosure not only weakens deterrence (see discussion supra at 
8), but also prevents assessment of whether practices of 
individual employers or particular industries are in need of 
reform.  "The disclosure through litigation of incidents or 
practices which violate national policies respecting 
nondiscrimination in the work force is itself important, for the 
occurrence of violations may disclose patterns of noncompliance 
resulting from a misappreciation of [Title VII's] operation or 
entrenched resistance to its commands, either of which can be of 
industry-wide significance."  McKennon, 513 U.S. at 358-59.

          2.     Arbitration, By Its Nature, Does Not Allow For 
The Development Of The Law

     Arbitral decisions may not be required to be written or 
reasoned, and are not made public without the consent of the 
parties.  Judicial review of arbitral decisions is  limited to 
the narrowest of grounds.12  As a result, arbitration affords no 
opportunity to build a jurisprudence through precedent.13  
Moreover, there is virtually no opportunity for meaningful 
scrutiny of arbitral decision-making.  This leaves higher courts 
and Congress unable to act to correct errors in statutory 
interpretation.  The risks for the vigorous enforcement of the 
civil rights laws are profound.  See discussion supra at section 
IV. B.

          3.     Additional Aspects Of Arbitration Systems Limit 
Claimants’ Rights In Important Respects

     Arbitration systems, regardless of how fair they may be, 
limit the rights of injured individuals in other important ways.  
To begin with, the civil rights litigant often has available the 
choice to have her or his case heard by a jury of peers, while in 
the arbitral forum juries are, by definition, unavailable.  
Discovery is significantly limited compared with that available 
in court and permitted under the Federal Rules of Civil 
Procedure.  In addition, arbitration systems are not suitable for 
resolving class or pattern or practice claims of discrimination.  
They may, in fact, protect systemic discriminators by forcing 
claims to be adjudicated one at a time, in isolation, without 
reference to a broader -- and more accurate -- view of an 
employer's conduct.  

     B.     Mandatory Arbitration Systems Include Structural 
Biases Against Discrimination Plaintiffs

     In addition to the substantial and inevitable differences 
between the arbitral and judicial forums that have already been 
discussed, when arbitration of employment disputes is imposed as 
a condition of employment, bias inheres against the employee.14

     First, the employer accrues a valuable structural advantage 
because it is a "repeat player."  The employer is a party to 
arbitration in all disputes with its employees.  In contrast, the 
employee is a "one-shot player"; s/he is a party to arbitration 
only in her or his own dispute with the employer.  As a result, 
the employee is generally less able to make an informed selection 
of arbitrators than the employer, who can better keep track of an 
arbitrator's record.  In addition, results cannot but be 
influenced by the fact that the employer, and not the employee, 
is a potential source of future business for the arbitrator.15 A 
recent study of nonunion employment law cases16 found that the 
more frequent a user of arbitration an employer is, the better 
the employer fares in arbitration.17

     In addition, unlike voluntary post-dispute arbitration -- 
which must be fair enough to be attractive to the employee -- the 
employer imposing mandatory arbitration is free to manipulate the 
arbitral mechanism to its benefit.  The terms of the private 
agreement defining the arbitrator’s authority and the arbitral 
process are characteristically set by the more powerful party, 
the very party that the public law seeks to regulate.  We are 
aware of no examples of employees who insist on the mandatory 
arbitration of future statutory employment disputes as a 
condition of accepting a job offer -- the very suggestion seems 
far-fetched.  Rather, these agreements are imposed by employers 
because they believe them to be in their interest, and they are 
made possible by the employer's superior bargaining power.  It is 
thus not surprising that many employer-mandated arbitration 
systems fall far short of basic concepts of fairness.  Indeed, 
the Commission has challenged -- by litigation, amicus curiae 
participation, or Commissioner charge -- particular mandatory 
arbitration agreements that include provisions flagrantly 
eviscerating core rights and remedies that are available under 
the civil rights laws.18  

     The Commission's conclusions in this regard are consistent 
with those of other analyses of mandatory arbitration. The 
Commission on the Future of Worker-Management Relations (the 
"Dunlop Commission") was appointed by the Secretary of Labor and 
the Secretary of Commerce to, in part, address alternative means 
to resolve workplace disputes.  In its Report and Recommendations 
(Dec. 1994) ("Dunlop Report"), the Dunlop Commission found that 
recent employer experimentation with arbitration has produced a 
range of programs that include "mechanisms that appear to be of 
dubious merit for enforcing the public values embedded in our 
laws."  Dunlop Report at 27.  In addition, a report by the U.S. 
General Accounting Office, surveying private employers' use of 
ADR mechanisms, found that existing employer arbitration systems 
vary greatly and that "most" do not conform to standards 
recommended by the Dunlop Commission to ensure fairness.  See  
"Employment Discrimination:  Most Private-Sector Employers Use 
Alternative Dispute Resolution" at 15, HEHS-95-150 (July 1995). 

     The Dunlop Commission strongly recommended that binding 
arbitration agreements not be enforceable as a condition of 

     The public rights embodied in state and federal employment
     law -- such as freedom from discrimination in the workplace
     . . . -- are an important part of the social and economic
     protections of the nation.  Employees required to accept
     binding arbitration of such disputes would face what for
     many would be an inappropriate choice: give up your right to
     go to court, or give up your job.

Dunlop Report at 32.  The Brock Commission (see supra n.13) 
agreed with the Dunlop Commission’s opposition to mandatory 
arbitration of employment disputes and recommended that all 
employee agreements to arbitrate be voluntary and post-dispute.  
Brock Report at 81-82.  In addition, the National Academy of 
Arbitrators recently issued a statement opposing mandatory 
arbitration as a condition of employment "when it requires waiver 
of direct access to either a judicial or administrative forum for 
the pursuit of statutory rights."  See National Academy of 
Arbitrators’ Statement and Guidelines (adopted May 21, 1997), 103 
Daily Lab. Rep. (BNA) E-1 (May 29, 1997).

     C.     Mandatory Arbitration Agreements Will Adversely 
Affect The Commission’s Ability To Enforce The Civil Rights Laws

     The trend to impose mandatory arbitration agreements as a 
condition of employment also poses a significant threat to the 
EEOC's statutory responsibility to enforce the federal employment 
discrimination laws.  Effective enforcement by the Commission 
depends in large part on the initiative of individuals to report 
instances of discrimination to the Commission.  Although 
employers may not lawfully deprive individuals of their statutory 
right to file employment discrimination charges with the EEOC or 
otherwise interfere with individuals' protected participation in 
investigations or proceedings under these laws,19 employees who 
are bound by mandatory arbitration agreements may be unaware that 
they nonetheless may file an EEOC charge.  Moreover, individuals 
are likely to be discouraged from coming to the Commission when 
they know they will be unable to litigate their claims in 
court.20  These chilling effects on charge filing undermine the 
Commission's enforcement efforts by decreasing channels of 
information, limiting the agency's awareness of potential 
violations of law, and impeding its ability to investigate 
possible unlawful actions and attempt informal resolution.   
VI.     Voluntary, Post-Dispute Agreements To Arbitrate 
Appropriately Balance The Legitimate Goals Of Alternate Dispute 
Resolution And The Need To Preserve The Enforcement Framework Of 
The Civil Rights Laws

     The Commission is on record in strong support of voluntary 
alternative dispute resolution programs that resolve employment 
discrimination disputes in a fair and credible manner, and are 
entered into after a dispute has arisen.  We reaffirm that 
support here.  This position is based on the recognition that 
while even the best arbitral systems do not afford the benefits 
of the judicial system, well-designed ADR programs, including 
binding arbitration, can offer in particular cases other valuable 
benefits to civil rights claimants, such as relative savings in 
time and expense.21 Moreover, we recognize that the judicial 
system is not, itself, without drawbacks.  Accordingly, an 
individual may decide in a particular case to forego the judicial 
forum and resolve the case through arbitration.  This is 
consistent with civil rights enforcement as long as the 
individual's decision is freely made after a dispute has 

VII. Conclusion

     The use of unilaterally imposed agreements mandating binding 
arbitration of employment discrimination disputes as a condition 
of employment harms both the individual civil rights claimant and 
the public interest in eradicating discrimination.  Those whom 
the law seeks to regulate should not be permitted to exempt 
themselves from federal enforcement of civil rights laws.  Nor 
should they be permitted to deprive civil rights claimants of the 
choice to vindicate their statutory rights in the courts -- an 
avenue of redress determined by Congress to be essential to 

Processing Instructions For The Field And Headquarters

     1.     Charges should be taken and processed in conformity 
with priority charge processing procedures regardless of whether 
the charging party has agreed to arbitrate employment disputes.  
Field offices are instructed to closely scrutinize each charge 
involving an arbitration agreement to determine whether the 
agreement was secured under coercive circumstances (e.g., as a 
condition of employment).  The Commission will process a charge 
and bring suit, in appropriate cases, notwithstanding the 
charging party’s agreement to arbitrate.

     2.     Pursuant to the statement of priorities in the 
National Enforcement Plan, see § B(1)(h), the Commission 
will continue to challenge the legality of specific agreements 
that mandate binding arbitration of employment discrimination 
disputes as a condition of employment.  See, e.g., Briefs of the 
EEOC as Amicus Curiae in Seus v. John Nuveen & Co., No. 96-CV-
5971 (E.D. Pa.) (Br. filed Jan. 11, 1997); Gibson v. Neighborhood 
Health Clinics, Inc., No. 96-2652 (7th Cir.) (Br. filed Sept. 23, 
1996); Johnson v. Hubbard Broadcasting, Inc., No. 4-96-107 (D. 
Minn.) (Br. Filed May 17, 1996); Great Western Mortgage Corp. v. 
Peacock, No. 96-5273 (3d Cir.) (Br. filed July 24, 1996).

_________________                              __________________
Date                                        Gilbert F. Casellas

1.   Although binding arbitration does not, in and of itself, 
undermine the purposes of the laws enforced by the EEOC, the 
Commission believes that this is the result when it is imposed as 
a term or condition of employment.

2.   The Gilmer decision is not dispositive of whether 
employment agreements that mandate binding arbitration of 
discrimination claims are enforceable.  As explicitly noted by 
the Court, the arbitration agreement at issue in Gilmer was not 
contained in an employment contract.  500 U.S. at 25 n.2.  Even 
if Gilmer had involved an agreement with an employer, the issue 
would remain open given the active role of the legislative branch 
in shaping the development of employment discrimination law.  See 
discussion infra at section IV. B. 

3.   See, e.g., H.R. Rep. No. 88-914, pt. 1 (1963), 
reprinted in United States Equal Employment Opportunity 
Commission, Legislative History of Title VII and XI of the Civil 
Rights Act of 1964 ("1964 Leg. Hist.") at 2016 (the Civil Rights 
Act of 1964 was "designed primarily to protect and provide more 
effective means to enforce. . . civil rights"); H.R. Rep. No.88-
914, pt.2 (1963) (separate views of Rep. McCulloch et al.), 
reprinted in 1964 Leg. Hist. at 2122 ("[a] key purpose of the 
bill . . . is to secure to all Americans the equal protection of 
the laws of the United States and of the several States"); 
Charles & Barbara Whalen, The Longest Debate:  A legislative 
history of the 1964 Civil Rights Act 104 (1985) (opening 
statement of Rep. Celler on House debate of H.R. 7152: "The 
legislation before you seeks only to honor the constitutional 
guarantees of equality under the law for all. . . . [W]hat it 
does is to place into balance the scales of justice so that the 
living force of our Constitution shall apply to all people . . . 
."); H.R. Rep. No. 92-238 (1971), reprinted in Senate Committee 
on Labor and Public Welfare, Subcommittee on Labor, Legislative 
History of the Equal Employment Opportunity Act of 1972 ("1972 
Leg. Hist.") at 63 (1972 amendments to Title VII are a 
"reaffirmation of our national policy of equal opportunity in 

4.   William McCulloch (R-Ohio) was the ranking Republican of 
Subcommittee No. 5 of the House Judiciary Committee, to which the 
civil rights bill (H.R. 7152) was referred for initial 
consideration by Congress.  McCulloch was among the individuals 
responsible for working out a compromise bill that was ultimately 
substituted by the full Judiciary Committee for the bill reported 
out by Subcommittee No. 5.  His views, which were joined by six 
members of Congress, are thus particularly noteworthy.

5.   See also Albemarle Paper Co. v. Moody, 422 U.S. 405, 
416 (1975) (The Civil Rights Act of 1964 is a "complex 
legislative design directed at an historic evil of national 

6.   Commitment to our national policy to eradicate 
discrimination continues today to be of the utmost importance.  
As President Clinton stated in his second inaugural address:

     Our greatest responsibility is to embrace a new spirit of 
community for a new century . . . . The challenge of our past 
remains the challenge of our future:  Will we be one Nation, one 
people, with one common destiny, or not?  Will we all come 
together, or come apart?

     The divide of race has been America's constant curse.  And 
each new wave of immigrants gives new targets to old prejudices . 
. . . These forces have nearly destroyed our Nation in the past.  
They plague us still.

President William J. Clinton's Inaugural Address (Jan. 20, 1997), 
33 Weekly Comp. Pres. Doc. 61 (Jan. 27, 1997).

7.   Section 107 of the ADA specifically incorporates the 
powers, remedies, and procedures set forth in Title VII with 
respect to the Commission, the Attorney General, and aggrieved 
individuals.  See 42 U.S.C.§ 12117.  Similar enforcement 
provisions are contained in the ADEA.  See 29 U.S.C. §§ 
626 and 628.

8.   In addition, unlike arbitrators, courts have coercive 
authority, such as the contempt power, which they can use to 
secure compliance.

9.   See also H.R. Rep. No. 88-914, pt.2 (1963) (separate 
views of Rep. McCulloch et al.), reprinted in 1964 Leg. Hist. at 
2150 (explaining that EEOC was not given cease-and-desist powers 
in the final House version of the Civil Rights Act of 1964, H.R. 
7152, because it was "preferred that the ultimate determination 
of discrimination rest with the Federal judiciary").  

10.  See  also 118 Cong. Rec. S7168 (March 6, 1972) 
(section-by-section analysis of H.R. 1746, the Equal Opportunity 
Act of 1972, as agreed to by the conference committees of each 
House; analysis of § 706(f)(1) provides that, while it is 
hoped that most cases will be handled through the EEOC with 
recourse to a private lawsuit as the exception, "as the 
individual's rights to redress are paramount under the provisions 
of Title VII it is necessary that all avenues be left open for 
quick and effective relief").  

11.  Article III of the Constitution provides federal judges 
with life tenure and salary protection to safeguard the 
independence of the judiciary.  No such safeguards apply to the 
arbitrator.  The importance of these safeguards was stressed in 
the debates on the 1972 amendments to Title VII.  Senator 
Dominick, in offering an amendment giving the EEOC the right to 
file a civil action in lieu of cease-and-desist powers, explained 
that the purpose of the amendment was to "vest adjudicatory power 
where it belongs -- in impartial judges shielded from political 
winds by life tenure."  1972 Leg. Hist. at 549.  The amendment 
was later revised in minor respects and adopted by the Senate. 

12.  Under the Federal Arbitration Act, arbitral awards 
may be vacated only for procedural impropriety such as 
corruption, fraud, or misconduct.  9 U.S.C. § 10.  
Judicially created standards of review allow an arbitral award to 
be vacated where it clearly violates a public policy that is 
explicit, well-defined, "dominant" and ascertainable from the 
law, see United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 
29, 43 (1987), or where it is in "manifest disregard" of the law, 
see Wilko v. Swan, 346 U.S. 427, 436-37 (1953).  The latter 
standard of review has been described by one commentator as "a 
virtually insurmountable" hurdle.  See Bret F. Randall, The 
History, Application, and Policy of the Judicially Created 
Standards of Review for Arbitration Awards, 1992 BYU L. Rev. 759, 
767.  But cf. Cole v. Burns Int=l Sec. Servs., 105 F.3d 1465, 
1486-87 (1997) (in the context of mandatory employment 
arbitration of statutory disputes, the court interprets judicial 
review under the "manifest disregard" standard to be sufficiently 
broad to ensure that the law has been properly interpreted and 

13.  Congress has recognized the inappropriateness of 
ADR where "a definitive or authoritative resolution of the matter 
is required for precedential value, and such a proceeding is not 
likely to be accepted generally as an authoritative precedent," 
see Alternative Dispute Resolution Act, 5 U.S.C. § 572(b)(1) 
(providing for use of ADR by federal administrative agencies 
where the parties agree); or where "the case involves complex or 
novel legal issues," see Judicial Improvements and Access to 
Justice Act, 28 U.S.C. § 652(c)(2) (providing for court-
annexed arbitration; §§ 652(b)(1) and (2) also require the parties' 
consent to arbitrate constitutional or statutory civil rights claims).  
Similar findings were made by the U.S. Secretary of Labor's Task 
Force on Excellence in State and Local Government Through Labor-
Management Cooperation ("Brock Commission"), which was charged 
with examining labor-management cooperation in state and local 
government.  The Task Force's report, "Working Together for 
Public Service" (1996) ("Brock Report"), recommended "Quality 
Standards and Key Principles for Effective Alternative Dispute 
Resolution Systems for Rights Guaranteed by Public Law and for 
Other Workplace Disputes" which include that "ADR should normally 
not be used in cases that represent tests of significant legal 
principles or class action."  Brock Report at 82.

14.  A survey of employment discrimination arbitration 
awards in the securities industry, which requires as a condition 
of employment that all brokers resolve employment disputes 
through arbitration, found that "employers stand a greater chance 
of success in arbitration than in court before a jury" and are 
subjected to "smaller" damage awards.  See Stuart H. Bompey & 
Andrea H. Stempel, Four Years Later:  A Look at Compulsory 
Arbitration of Employment Discrimination Claims After Gilmer v. 
Interstate/Johnson Lane Corp., 21 Empl. Rel. L.J. 21, 43 (autumn 

15.  See, e.g., Julius G. Getman, Labor Arbitration and 
Dispute Resolution, 88 Yale L.J. 916, 936 (1979) ("an arbitrator 
could improve his chances of future selection by deciding 
favorably to institutional defendants:  as a group, they are more 
likely to have knowledge about past decisions and more likely to 
be regularly involved in the selection process"); Reginald 
Alleyne, Statutory Discrimination Claims:  Rights 'Waived' and 
Lost in the Arbitration Forum, 13 Hofstra Lab. L.J. 381, 428 
(Spring 1996) ("statutory discrimination grievances relegated to 
. . . arbitration forums are virtually assured employer-favored 
outcomes," given "the manner of selecting, controlling, and 
compensating arbitrators, the privacy of the process and how it 
catalytically arouses an arbitrator's desire to be acceptable to 
one side").

16.  Arbitration of labor disputes pursuant to a 
collective bargaining agreement is less likely to favor the 
employer as a repeat-player because the union, as collective 
bargaining representative, is also a repeat-player.  

17.  See Lisa Bingham, "Employment Arbitration:  The 
effect of repeat-player status, employee category and gender on 
arbitration outcomes," (unpublished study on file with the 
author, an assistant professor at Indiana U. School of Public & 
Environmental Affairs).   

18.  Challenged agreements have included provisions 
that: (1) impose filing deadlines far shorter than those provided 
by statute; (2) limit remedies to "out-of-pocket" damages; (3) 
deny any award of attorney's fees to the civil rights claimant, 
should s/he prevail; (4) wholly deny or limit punitive and 
liquidated damages; (5) limit back pay to a time period much 
shorter than that provided by statute; (6) wholly deny or limit 
front pay to a time period far shorter than that ordered by 
courts; (7) deny any and all discovery; and (8) allow for payment 
by each party of one-half of the costs of arbitration and, should 
the employer prevail, require the claimant, in the arbitrator's 
discretion, to pay the employer's share of arbitration costs as 

19.  See "Enforcement Guidance on non-waivable employee 
rights under Equal Employment Opportunity Commission (EEOC) 
statutes," Vol. III EEOC Compl. Man. (BNA) at N:2329 (Apr. 10, 

20.  The Commission remains able to bring suit despite the 
existence of a mandatory arbitration agreement because it acts 
"to vindicate the public interest in preventing employment 
discrimination,"  General Tel., 446 U.S. at 326.  Cf. S.Rep. No. 
101-263 (1990), reprinted in, Legislative History of The Older 
Workers Benefits Protection Act, at 354 (amendment to ADEA § 
626(f)(4), which provides that "no waiver agreement may affect 
the Commission's rights and responsibilities to enforce [the 
ADEA]," was intended "as a clear statement of support for the 
principle that the elimination of age discrimination in the 
workplace is a matter of public as well as private interest").  
As a practical matter, however, the Commission's ability to 
litigate is limited by its available resources.

21.  Despite conventional wisdom to the contrary, the 
financial costs of arbitration can be significant and may 
represent no savings over litigation in a judicial forum.  These 
costs may include the arbitrator's fee and expenses; fees charged 
by the entity providing arbitration services, which may include 
filing fees and daily administrative fees; space rental fees; and 
court reporter fees.

22.  The Dunlop Commission similarly supported voluntary forms 
of ADR, but based its opposition to mandatory arbitration on the 
premise that the avenue of redress for statutory employment 
rights should be chosen by the individual rather than dictated by 
the employer.  Dunlop Report at 33. 

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