Document Type

Article

Publication Date

2001

Abstract

Can a privately negotiated arbitration agreement deprive employees of the statutory right to sue in court on claims of discrimination in employment because of race, sex, religion, age, disability, and similar grounds prohibited by federal law? Two leading U.S. Supreme Court decisions, decided almost two decades apart, reached substantially different answers to this questionand arguably stood logic on its head in the process. In the earlier case of Alexander v. Gardner-Denver Co., involving arbitration under a collective bargaining agreement, the Court held an adverse award did not preclude a subsequent federal court action by the black grievant alleging racial discrimination. But ten years ago, in Gilmer v. Interstate/Johnson Lane Corp., the Court ruled that an individual employee's agreement to arbitrate all employment disputes prevented him from going to court with the claim he was terminated on the basis of age. Most disinterested observers have approved Gardner-Denver's rejection of arbitral finality, but have denounced Gilmer's enforcement of a so-called "mandatory arbitration" clause imposed on an employee as a condition of employment. Yet, if different results were justified, a good argument can be made from the perspective of voluntariness that the Supreme Court got it backwards. The arbitration provision in Gardner-Denver was negotiated by a union that was presumably more nearly equal in bargaining power to the employer than the isolated employee in Gilmer. The latter had to sign what was in effect a contract of adhesion. Nonetheless, however plausible may be the abstract objections to mandatory arbitration, my thesis is that the ordinary rank-and-file employee may well be better off as a practical matter having assured access to an arbitrator rather than theoretical access to a judge and jury. An increasing amount of empirical evidence suggests that is true even for the individual employee in the nonunion setting. A fortiori, it should be true for the employee represented by a union in the collective bargaining situation. Employers, too, are likely to gain from the use of arbitration instead of court litigation.