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Third Circuit Allows Employees to Go Forward with Age Discrimination Lawsuit Despite Employer’s Arbitration Policy

businessmanIt is said that an “ounce of prevention is worth of a pound of cure.” Unfortunately, sometimes in life, prevention simply isn’t possible. When these circumstances arise, especially when it comes to your employment situation, the most important thing is to make sure that your response is the right one. This is one of many areas where the advice of an experienced New Jersey discrimination attorney can be key. Take for example, the case of two art institute employees, whose federal discrimination lawsuit survived their employer’s attack based upon its institution of an arbitration policy. The lawsuit survived because the men promptly and explicitly rejected the policy, according to a recent Third Circuit Court of Appeals decision that is binding in federal courts in New Jersey, Pennsylvania, and Delaware.

The employees, LaMont and Michael, were two men working as assistant directors of admissions at the Art Institute of Pittsburgh. In 2012, after each received “inexplicably harsh and unfair quarterly” performance reviews, complete with ratings of “below expectations,” each man filed a complaint with the Equal Employment Opportunity Commission. Michael alleged that the review was a pretext for age discrimination. LaMont’s assertions were similar but alleged that the basis in his case was age and race discrimination.

Less than two months after the men filed with the EEOC, the institute’s parent company instituted a company-wide alternative dispute resolution (ADR) policy. The policy established multiple tiers of dispute resolution, with the final tier being binding arbitration. The policy stated that it covered, among other things, all employee claims of discrimination, harassment, or wrongful termination.

Sometimes, as an employee, you may feel that such arbitration policies in your employment agreement are not in your best interest. You may believe, justifiably, that you’d be better off in court than in an arbitration hearing should you become a victim of employment discrimination. Your options may be somewhat limited, however, since your employer may make your consent to the policy a condition of employment (or continued employment). Even if your employer’s policy contains such a requirement, there may be ways to strengthen your position.

The policy in this case had a provision stating that, by remaining in their jobs, all company employees were implicitly consenting to the new policy. LaMont and Michael neither quit nor consented (either explicitly or implicitly). Instead, they explicitly objected to the policy and its legality, contending that it was both a violation of federal law and enacted in retaliation against their EEOC filings.

The employer terminated LaMont and Michael in January and April 2013, respectively. They both sued for discrimination. The employer moved to dismiss, claiming that the ADR policy barred the men from suing.

The District Court agreed, but the Third Circuit decided that that was incorrect. The ruling pointed out that one of the essential things that the law requires in order to enforce ADR policies like this one is something called “mutual assent,” which is an indication that both sides actually agreed to the policy. This can be explicit or implicit. The employer argued that the men implicitly agreed to be subject to the policy by staying in their jobs. If the men had stayed silent and remained on the job, the employer’s argument might have worked. However, both men promptly and explicitly rejected the ADR policy. By virtue of the men’s conduct, the evidence was clear that there was no implicit mutual assent.

Without any proof that the men agreed to be bound by the policy, there was nothing that barred the men from going forward with their discrimination complaints in federal court.

The diligent New Jersey age discrimination attorneys at Phillips & Associates have been helping victimized workers seek just outcomes for the harm they suffered for many years. If you believe that you have been harmed as a result of discrimination or sexual harassment, contact us right away. Our team is available online or at (609) 436-9087. Reach out today to set up a free and confidential consultation with one of our skilled and experienced attorneys to find out what we can do to help you.

More blog posts:

What a Pennsylvania Employee’s Court Success Means for New Jersey Workers, New Jersey Employment Lawyer Blog, Aug. 29, 2017

When an Employer Can (and Cannot) Demand Arbitration of Your New Jersey Age Discrimination Case, New Jersey Employment Lawyer Blog, Aug. 16, 2017

Photo credit: rogerp64, [CC0 License], via Pixabay

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