WASHINGTON — Employees claiming discrimination do not have a right to take their case to court if they have signed contracts agreeing to binding arbitration, the Supreme Court said Monday in a decision with the potential to curb civil rights litigation.
The decision was in an age discrimination suit involving a 62-year-old man who, like all registered stockbrokers, had signed a standard contract that says all disputes with employers will be arbitrated. The court ruled that the man's discrimination complaint "can be subjected to compulsory arbitration."
Civil rights attorneys saw the 7-2 ruling as ominous, saying they feared the ruling would lead other industries to require arbitration clauses. If so, employees would be stripped of their previously assumed right to a court hearing in discrimination cases.
"This decision slams the courthouse door on the employees in an entire industry," said Richard Seymour, staff counsel for the Lawyers Committee for Civil Rights Under Law.
Although the ruling dealt with an age discrimination complaint, its reasoning would apply to complaints involving race or sex discrimination, he said. "It's hard to say what it means for other industries, but it shows again (that) this court is not too concerned about civil rights claims," Seymour said.
But business attorneys saw the ruling as an opportunity. Employers, upset by the high cost of litigation, have looked to arbitration as a quicker and cheaper alternative. Typically, it takes years for a civil rights claim to be decided in a federal court, but arbitrators usually deliver a decision within a few months.
"We think arbitration is the way to solve these disputes," said Stephen Bokat, general counsel for the U.S. Chamber of Commerce. "There is less procedural wrangling. It takes less time to get a decision. It can be an enormous cost savings for business."
In March, the Bush Administration urged Congress to amend the federal anti-discrimination laws to "encourage" binding arbitration as an alternative to lawsuits. "In light of the litigation crisis facing this country . . . there is no reason to disfavor the use of such forums," the Administration said.
In speeches and other comments, the conservative members of the Supreme Court also have complained about the clogged courts and urged alternative ways of settling disputes.