In Equal Employment Opportunity Commission (EEOC) v. Waffle House, Inc., ___ U.S. ___ (2002), the United States Supreme Court held that the EEOC may pursue an action to enforce the Americans with Disabilities Act (ADA) and may seek affirmative relief on behalf of an employee, even though the employee has signed an employment agreement requiring arbitration.
In his application for employment and as a condition of employment with Waffle House, Eric Baker agreed that any dispute or claim concerning his employment would be settled by binding arbitration. Following his discharge from employment, which occurred shortly after he suffered a seizure at work, he filed a timely charge of discrimination under the ADA with the EEOC. After an investigation and an unsuccessful attempt to conciliate, the EEOC filed an enforcement action. (Baker is not a party to the action.) The EEOC sought injunctive relief, affirmative relief to make Baker whole (including backpay, reinstatement, and compensatory damages), and punitive damages for malicious and reckless conduct.
Based on arguments by Waffle House, the U.S. Court of Appeals for the 4th Circuit determined that, “when an employee has signed a mandatory arbitration agreement, the EEOC’s remedies in an enforcement action are limited to injunctive relief.” Therefore, it concluded the EEOC could not seek relief such as backpay, reinstatement, compensatory damages, and punitive damages on behalf of Baker. The United States Supreme Court agreed to hear the EEOC’s argument that the Court of Appeals was wrong.
The Supreme Court concluded that arbitration clauses in employment contracts do not bind the EEOC and do not prohibit it from seeking relief other than injunctive relief. The Court noted that once the EEOC decides to file suit on its own, the employee has no control over the suit (the EEOC may pursue the action and appropriate relief without the employee’s consent or desire). The Court also held that the Federal Arbitration Act does not require parties to arbitrate when they have not agreed to do so and, because the EEOC is not a party to employment arbitration agreements, it cannot be bound by those agreements. The Court found that the EEOC is charged with the right to enforce anti-discrimination laws, and it has the concomitant right to enforce the laws both by seeking to vindicate the public interest through injunctive relief and by pursuing relief on behalf of the victim.
Thus, the Court determined that the EEOC, despite the arbitration clause signed by Baker, could pursue relief such as backpay, reinstatement, and compensatory and punitive damages, even though the relief would inure to Baker’s benefit.