Other Bulletins

July 2001
Employment Law Newsletter

Will Mandatory Arbitration of Employment Disputes Be Advantageous to Your Company?
by Deborah D. Ferriter

The U.S. Supreme Court ruled in Circuit City Stores v. Adams that an employer may have the opportunity to resolve all employment disputes through a mandatory arbitration program. The decision has been widely reported as an important victory for businesses that want to have workplace disputes settled by arbitration rather than in court. You should not rush, however, to institute mandatory arbitration agreements to cover the employees in your organization.

Circuit City involved claims under California laws, which parallel Massachusetts employment practices laws. There remain unanswered questions, however, regarding limits that may be placed on mandatory arbitration contracts by Title VII of the Civil Rights Act, the Age Discrimination in Employment Act and the Americans With Disabilities Act (“ADA”). The Supreme Court is expected to rule in EEOC v. Waffle House, Inc. whether the Equal Employment Opportunity Commission is bound by an arbitration agreement between an employee and employer. A lower court held that the EEOC could apply its authority to enforce the ADA even though the employee entered into an agreement to arbitrate employment disputes or claims. The Massachusetts Commission Against Discrimination has similar authority to prosecute court actions on behalf of the named individual.

An employer must evaluate the advantages and disadvantages to arbitrating employment practices. If the employer chooses to adopt an arbitration program, the arbitration agreement must be crafted to protect it from legal challenge.

Advantages:

• Arbitration may cost less than litigation;
• The dispute is kept private between the employer and the employee; and
• Arbitration decisions generally may be more conservative

Disadvantages:

• Arbitration programs may lead to more claims because of the lower cost and relative ease of the process;
• The outcome greatly depends on the selection of the arbitrator, and on his or her experience, knowledge, ability and wisdom. It can be difficult to identify and analyze an arbitrator’s prior decisions, which are rarely published.
• The rules of evidence are more relaxed in arbitration. An arbitrator may allow evidence which a judge might exclude.
• There is limited review of and remedy for any error made by an arbitrator.

Will your arbitration agreement be enforceable?

The Court’s decision in the Circuit City case does not mean that every employment arbitration agreement will be enforced. Last month, the Preservation of Civil Rights Protection Act was introduced in the U.S. Congress. If the bill is enacted, employment arbitration agreements will be unenforceable unless the employee and employer voluntarily agree to arbitrate a claim after it has arisen. Even if the bill fails, an arbitration agreement may be held unenforceable by a court if it is deemed to unfairly favor the employer. When evaluating the fairness of an arbitration agreement, courts have analyzed the following factors.

• Did the employee voluntarily enter into the arbitration clause or was it a condition for getting or keeping a job?
• Was the language in the arbitration provision brought to the employee’s attention at the time of application?
• Were the implications of the arbitration provision explained to the employee?
• Did the employer provide specific examples of the type of issues that would be arbitrable?

The legislative and judicial landscape governing the enforceability of arbitration agreements is uncertain. If you are considering adopting a mandatory arbitration program, we encourage you to seek legal advice before making this important decision.

Debbie Ferriter is a member of the firm’s Employment Law Practice Group. She can be reached at (413) 272-6249 or dferriter@bulkley.com.

Fore! Recent Disability Cases!
by Sandra J. Staub

The public debate prompted by the case pitting golfer Casey Martin against PGA Tour, Inc. – to allow a golf cart as a reasonable accommodation or not – highlights one of three recent disability law cases which may be instructive to employers.

Mr. Martin’s case is not an employment discrimination case, but a case of discrimination under the Americans with Disabilities Act (“ADA”) against a person with a disability in a place of public accommodation. Mr. Martin uses a cart while golfing because he suffers from Klippel-Trenaunay-Weber Syndrome, a degenerative circulatory disorder. On May 29, 2001, the U. S. Supreme Court ruled that the PGA must allow Mr. Martin to use a golf cart in tournament play, despite PGA rules which prohibit use of carts. Allowing Mr. Martin to use a cart is required because such accommodation does not fundamentally alter the nature of golf competitions run by the PGA. Reasonable accommodation in employment required by the ADA and Chapter 151B of the Massachusetts General Laws (“151B”) is similar to that required for Mr. Martin: an accommodation which allows the employee to perform the fundamental duties of the job without imposing an undue hardship on the employer.

Another recent case highlights a difference between the ADA and 151B. Massachusetts’ highest court recently decided that mitigating or corrective devices may not be considered in determining whether an employee has a disability under 151B. The Boston police department had challenged whether an officer-in-training should be deemed a person with a disability because his hearing impairment had been effectively eliminated with the use of a hearing aid. The Supreme Judicial Court ruled that the employee still has a disability, and thus may be subject to protection under 151B, despite his use of the hearing aid. Under the ADA, use of mitigating or corrective devices can remove employees from the class of protected people under the ADA.

In the third recent case, a federal court of appeals for the circuit including Massachusetts focused on the fact-based inquiry required under both the ADA and 151B to determine whether an employee’s impairment substantially limits a major life activity. American Airlines, Inc. had attempted to accommodate an employee who suffered from carpal tunnel syndrome, while maintaining that the employee was not a person with a disability. The court ultimately agreed with the airline and denied the employee’s claim that carpal tunnel syndrome substantially limited her in the major life activity of working. What is particularly noteworthy about the case is how the court conducted an “individualized inquiry” mandated by the ADA (and also by 151B). This included an analysis of the skills of the employee and the nature of jobs she was and was not prevented from performing. The decision does not preclude carpal tunnel syndrome as a disability and the court did not decide whether working is a major life activity.

In the decisions discussed above, the courts acknowledged the detailed, case-by-case inquiries required under state and federal law into whether 1) a person has a disability, and 2) whether a given accommodation will undermine the essential nature of the position to be filled. Each inquiry should be conducted with attention to the facts of the specific situation. Employers should engage in and document a good faith effort to meet the letter and intent of the ADA and 151B without sacrificing essential work goals.

Sandy Staub is Counsel to the firm and a member of the Employment Law Practice Group. You can reach her at (413)272-6278 or sstaub@bulkley.com.