Court Holds an Employer Does Not Always Have to Permit Dueling Remedies

I've tried, but can't, think of any other field of law outside of employment law where persons claiming to be injured must be given multiple and independent avenues for seeking relief. My point isn't that all employment claims should only be brought in a court - that would be unsatisfactory to all. Rather, I can't think of any other field that demands people claiming to be injured be permitted to seek redress for the same injury in multiple proceedings. In some instances, an employee can simultaneously litigate his claim in an administrative proceeding, an arbitration proceeding and in a court.

To make matters worse, an employer can settle a discrimination claim but, according to the EEOC (with court sanction), cannot enforce a provision in the settlement agreement which requires the employee to waive the right to file a charge of discrimination or which penalizes the employee if the employee files a charge. See EEOC v. 14 SunDance Rehab. Corp., 466 F.3d 490, 497 (6th Cir. 2006) (holding merely presenting an employee with a severance agreement which had an objectionable clause in it was not illegal). Endless litigation is highly inefficient and no matter how well intentioned, the cost of an absolutist rule against attempts to bring finality to disputes ends up hurting employees in the long run. We already have laws which regulate how and when coerced settlements may be set aside.

Two decades ago, the federal court of appeals in Chicago held an employer could not refuse to participate in an internal dispute resolution proceeding when the employee filed a lawsuit over the underlying dispute. This week, the federal court of appeals in New York disagreed. Oddly enough the employer was the Connecticut agency that investigates discrimination complaints. They had a problem employee who complained of discrimination and wanted to pursue a grievance with her union. The union contract, however, said the employee may either arbitrate her grievance or file a charge with the state agency. When she filed a charge, the union and her employer stopped processing the grievance. She, with the support of the EEOC, sued claiming the withdrawal of the grievance was retaliatory.

The court held that the choice of remedies (arbitration or a discrimination charge) provision was not retaliatory. In its view, the provision "only requires that the employee make a concrete choice, at a specific time, between filing a state claim with the CHRO and having the union pursue his or her grievance in arbitration." This view is irreconcilable with the decision of the Chicago court.

It is worth noting that the employee hands down lost her underlying discrimination and retaliation claims on the ground that she had been fired for insubordination. Despite this, the employer had a major lawsuit on its hands.

Tennessee employers are better off (for now) not looking to be a glutton for punishment. Don't rush out to include a choice of remedies provision in an employee handbooks, company policies or union contract. As I said, the courts disagree and the EEOC will fight this decision. The New York court's ruling is simply an interesting first step toward reducing the ridiculous cost and risk of employment litigation.