Employers may have a new weapon to help them combat discrimination suits by disgruntled employees — craftily drafted arbitration clauses. That view will certainly carry the day if a recent superior court decision stands up on review. In a case that once again challenged the enforceability of an arbitration clause in the employment context, the court found that, despite a drastic reduction in the time frame for filing a discrimination suit under Massachusetts General Laws chapter 151B along with unliateral controls of procedural terms by the employer, the clause was enforceable.
The decision is good news for employers who seek a faster, less expensive and less risky way to deal with costly discrimination suits. Under Massachusetts law, employees who believe they suffer discrimination based on gender, race, handicap and other immutable characteristics can file an administrative suit with the Massachusetts Commission Against Discrimination (MCAD). If they choose, workers can later remove their cases for jury trials in the superior court. Neither of these venues is considered to be favorable to employers, who are particularly fearful of perceived favortism toward employees at the MCAD, whose job it is to eliminate and provide remedies for illegal discrimination. Now, employers can draft arbitration provisions that not only permit them to avoid both the MCAD and local courts, but also allow rules changes to include a time limit of 30 days rather than the statutory 300 permitted for filings at the MCAD and three years permitted for superior court actions. Arbitration, however, will not prevent the MCAD from carrying out its own, simultaneous investigation of a discrmination complaint with the employee acting as witness rather than party.
The new decision comes in the wake of a 2009 ruling by the state’s highest court that invalidated an arbitration clause because it was not specific enough about the types of claims it covered. There, the Supreme Judical Court first affirmed the principle that arbitration clauses are favored in Massachusetts, then added heightened requirements for enforcement of them in discrimination cases. Chapter 151B arbitrations must be stated in “clear and unmistakable terms,” the court held. Because the agreement under review required arbitration of “any claim, controversy or dispute arising out of or in connection with this Agreement or its negotiations” and did not specifically reference Chapter 151B, it was deemed insufficient.