Public agencies such as the EEOC are not limited by the existence of an arbitration agreement between the employee and employer.
In EEOC vs. Waffle House, the Equal Employment Opportunity Commission (EEOC) filed a discrimination claim against the Waffle House restaurant chain on behalf of an employee who signed a mandatory arbitration agreement. The question of the case was: Could the EEOC make an end run around mandatory arbitration?
The case was a win for employees who do not like arbitration agreements. The court answered “yes” to the issue. The court considered the arbitration awards to be binding when it made its decision.
In Waffle House, the plaintiff had signed a mandatory arbitration agreement with Waffle House. He then filed a discrimination claim with the EEOC. The EEOC investigated the claim and filed a lawsuit against Waffle House on the plaintiff’s behalf. The EEOC is able to bring a case on behalf of the plaintiff because it is not a party to the arbitration agreement. It is not limited in what it can do such as filing a lawsuit. However, most employers may not look at the case decision as a setback to requiring mandatory arbitration agreements since the EEOC has limited resources and is likely to pick and choose its cases.
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