Last year, the Ninth Circuit Court of Appeals, which covers California, decided that federal antibias laws don’t prohibit employers from requiring job applicants and employees to sign mandatory arbitration agreements as a condition of employment. The case then went before a full panel of the Ninth Circuit for review—which has now handed down another strong pro-employer ruling endorsing mandatory arbitration agreements. We’ll explain the new decision.
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New Hire Won’t Sign Agreement
The case involved Donald Lagatree, who on his first day as a legal secretary for law firm Luce, Forward, Hamilton & Scripps in San Diego refused to sign a job offer letter containing a mandatory arbitration clause stating he would submit all workplace claims to arbitration. Thus, the firm withdrew its employment offer.
Eventually, the Equal Employment Opportunity Commission sued the law firm on Lagatree’s behalf, charging the firm retaliated against Lagatree by denying him employment based on his refusal to sign the arbitration agreement.
Court Backs Mandatory Arbitration
The full panel of the Ninth Circuit has reiterated that employers can require applicants and employees to arbitrate federal discrimination claims—such as for race, gender, and age bias—as an employment condition. In so ruling, the panel said it was overturning its notorious Duffield decision barring mandatory arbitration of federal discrimination claims.
However, the court’s decision did not lay to rest the retaliation issue. Instead, the court sent the case back to the lower court to allow the EEOC to further argue whether terminating or refusing to hire someone who is unwilling to sign a mandatory arbitration agreement amounts to retaliation. But the appeals court expressed strong skepticism that the EEOC could prevail on this issue.
Big Win for Employers but Use Caution
As a result of this ruling, you can enforce mandatory arbitration agreements involving federal dis-crimination claims. But until the retaliation issue is fully resolved, it’s important to continue to use caution and consult your attorney before terminating or refusing to hire someone who refuses to sign an arbitration agreement.