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Mandatory Arbitration Clauses Are Limited

January 20, 1999
Related Topics: Staffing and the Law, Featured Article
Courts continue to deny compelled arbitration of employment disputes. Two examples follow.

In the first case, Caesar Wright, a longshoreman subject to a collective bargaining agreement (CBA) containing an arbitration clause, brought his disability discrimination claim directly to court without previous arbitration. The district court dismissed the case based on failure to arbitrate, and the Fourth Circuit Court of Appeals affirmed. However, upon appeal, the U.S. Supreme Court unanimously held that arbitration could not be compelled because the arbitration clause didn't clearly and unmistakably cover statutory discrimination claims. Wright vs. Universal Maritime Service Corp., US No. 97-889, 11/16/98.

In the second case, Anthony Craft, a former Campbell Soup Co. employee represented by the Food Process Workers and Warehousemen and Helpers Local Union 228, filed a grievance alleging race discrimination, harassment and safety violations. Despite an arbitration agreement in the CBA, Craft filed suit in federal court. Campbell's attempt to compel arbitration pursuant to the CBA was denied with respect to Craft's federal claims. Upon appeal ,the Ninth Circuit Court of Appeals agreed, and held that the 1925 Federal Arbitration Act does not apply to CBAs or employment contracts. Craft vs. Campbell Soup Co., 9th Cir. No. 97-15060, 12/2/98, 1998 Daily Journal DAR 12217.

Employers should be aware that arbitration clauses must clearly cover statutory claims, and that federal claims sometimes may not be forced into arbitration.

Source: D. Diane Hatch, a Human Resources consultant based in San Francisco, and James E. Hall, an attorney with Barlow, Kobata & Denis, based in Chicago and Los Angeles, December 21, 1998.

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