XII. LABOR STUDIES/LABOR UNIONS,
COLLECTIVE BARGAINING, DISPUTE
RESOLUTION, AND LABOR AND
EMPLOYMENT LAW REFEREED PAPERS

DISCUSSION

Susan J. Stabile
St. John's University School of Law

     My comments address Michael LeRoy and Peter Feuille's paper, "Short Circuiting Circuit City? Judicial Enforcement of Mandatory Employment Arbitration." This paper addresses the efficacy of a significant alternative to the private litigation system for resolving claims of employment discrimination and other employer/employee disputes. An increasing number of employers are requiring as a condition of employment that employees agree to resolve disputes through binding arbitration. These agreements take various forms, and their use is not limited to any particular industry. Although they sometimes form part of a negotiated employment contract, they more frequently appear as a provision in an employee handbook or in an employment application. (In the latter cases, it is something of a misnomer to even use the term "agreement," because there is no real choice in the employee's acceptance of binding arbitration.)

     The authors do not enter the fray on the question of the wisdom of mandatory arbitration. As they acknowledge, the view on this question is far from uniform, particularly regarding mandatory arbitration as a means of resolving discrimination claims. The United States Equal Employment Opportunity Commission (EEOC), the federal agency charged with the interpretation and enforcement of employment discrimination laws, stated several years ago its view that agreements that mandate binding arbitration of employment discrimination claims as a condition of employment are contrary to the fundamental principles evinced in these laws (EEOC 1997).

     Despite these concerns, the Supreme Court, in its 2001 decision in Circuit City Stores v. Adams (2001), unequivocally expressed its support for mandatory arbitration agreements specifically in the workplace context, ending any uncertainty from its earlier decision in Gilmer v. Johnson/Interstate Lane Corp. (1991).

     The specific question raised in LeRoy and Feuille's paper--the extent to which federal courts enforce mandatory agreements to arbitrate employment disputes--is an important one, in light of the increasing prevalence of such agreements. Much of the commentary on this question to date has been ideologically driven. Thus, it is particularly refreshing to see this analysis undertaken by authors without any apparent political axe to grind.

     In certain respects, the author's findings are not surprising. That enforcement of arbitration agreements was lowest before Gilmer, for example, is explained by the fact that many people assumed (without giving the question much thought) that many types of employment disputes, such as employment discrimination, were not matters to be dealt with by arbitration. It is similarly not surprising that district court enforcement of arbitration agreements increased following Gilmer but that circuit court enforcement did not. District courts generally feel more constrained by the Supreme Court than do circuit courts, and it is understandable that many circuit courts felt free not to follow the weak signal given by the Supreme Court in Gilmer. Gilmer, after all, involved what was essentially a commercial mandatory arbitration procedure.

     I have several questions, however, regarding the methodology and/or conclusions of this paper. First, the study examines federal court decisions addressing enforcement of arbitration agreements with individual employees. It located its decisions by working backward and forward from Gilmer and Circuit City, in the backward instance by finding cases cited in those two decisions, then cases cited in the cited cases, and so on. This guarantees picking up many cases, but clearly not all. It will not pick up, for example unreported cases. It will also not pick up cases that are not cited because they raise no new issues. Thus, the authors should conduct a broader search for other cases, which is not a difficult task to undertake.

     Second, the paper contains very little analysis of the types of claims and types of agreements in the cases they analyze. This failure is particularly striking in the analysis of cases pre- and post-Circuit City (which is the most relevant time period because it was in Circuit City that the Supreme Court gave the most explicit guidance). It would be useful to know, for example, whether there is any difference in the enforcement of voluntary versus involuntarily agreements to arbitrate. It would also be important to know the extent of the increase, if any, following Circuit City of enforcement of mandatory arbitration in the context of employment discrimination and similar claims (i.e., those claims traditionally viewed as requiring court resolution). Without knowing more about the about the types of claims, I am reluctant to draw any conclusions about the impact of Circuit City.

     Third, it seems to me that it is too early to draw conclusions about the post-Circuit City time period. It is true that the authors have 69 decisions, but they are all in a very small time frame, and it seems premature to think we can yet speak in terms of trends.

     Fourth, the author's final conclusion is courts deny enforcement of arbitration agreements that are unfair to employees; however, the paper does not demonstrate that. The authors presumably draw that conclusion from their own review and analysis of the decisions. Fairness is often in the eyes of the beholder, however, and the authors need to present some analysis of the factors that cause them to reach this conclusion.

     One final comment. The paper mentions the fact that there are many fallout issues that need to be addressed in the wake of Circuit City, a fact that should not be underemphasized. After Circuit City, one can no longer argue that the Federal Arbitration Act does not cover employment agreements, except with respect to the narrow statutory exception. As the authors recognize, however, that does not mean that courts will uniformly enforce arbitration agreements. There is wide scope for courts to continue to find problems with particular arbitration agreements, thus justifying nonenforcement. Because there is nothing to indicate that Congress plans to step in to provide any clear guidance, we are in for a very long period of continual uncertainty as courts attempt to develop a cohesive standard for when mandatory arbitration agreements are enforceable.

References

Circuit City Stores, Inc. v. Adams. 2001. 532 U.S. 105.

EEOC, EEOC Notice No. 915.002 1997. (July 10) Online http:/www.eeoc.gov/docs/mandarb.html.

Gilmer v. Johnson/Interstate Lane Corp. 1991. 500 U.S. 20.