In a surprising decision, Massachusetts’ highest court ruled in July that not all arbitration agreements are created equally and, consequently, only some of them are enforceable by employers. When it comes to suits under the state’s anti-discrimination law (Chapter 151B), the language in a workplace arbitration clause must be clear and unequivocal. Unless it demonstrates that an employee specifically bargained away the right to sue at the Commission Against Discrimination or in state court, the worker’s lawsuit for sexual harassment, age or race bias, failure to reasonably accommodate, or other discrimination issues may escape arbitration. That means employers will face the far more difficult and expensive task of defending themselves in front of a jury or at the MCAD or its federal counterpart, the Equal Employment Opportunity Commission (EEOC).
The message for employers is clear: review any and all arbitration agreements you entered with your employees and, if you still believe arbitration of discrimination claims is in the company’s best interest, make sure Chapter 151B is specifically referenced. For many employers, arbitration is highly desirable because it’s faster, less expensive, and often yields more predictable results. It can also be easier to introduce evidence at an arbitration proceeding than it is in court or at the MCAD, venues where many employers feel that they are not always treated fairly. The last thing a company wants, then, is to find out after the fact that a case it believed would be handled quickly through arbitration will drag out for years at great expense and with perhaps more substantial risk.
Though not previously ruled on by the Massachusetts Supreme Judicial Court, the arbitrability of discrimination claims has generally been assumed by employment attorneys. In its July 2009 decision, the high court affirmed that principle, then added heightened requirements for enforcement of Chapter 151B arbitration agreements only. It did so despite the broad reaches of arbitration statutes at both the federal and state levels, both of which call for favoring arbitration in doubtful cases. Still, Chapter 151B arbitrations must be stated in “clear and unmistakable terms,” the court held. Because the agreement at issue read that arbitration was required of “any claim, controversy or dispute arising out of or in connection with this Agreement or its negotiations” and did not reference Chapter 151B, it was deemed insufficient. A single dissenter echoed the likely sentiments of numerous employers who currently use arbitration clauses like this one. She contended that the arbitration language was broad enough and clearly intended to cover all disputes that concerned the worker’s employment. She was, however, drowned out by a majority of 6 on the SJC.
Framingham employment lawyer Attorney Jack Merrill provides legal services to employees, employers and businesses throughout the Boston metro west and Worcester County region including Ashland, Dedham, Framingham, Franklin, Hopkinton, Maynard, Marlborough, Milford, Natick, Needham, Newton, Shrewsbury, Sudbury, Waltham, and Worcester, Massachusetts.
