Landmark Supreme Court Ruling Favors Arbitration of Employment Disputes
What church leaders need to know.

What church leaders need to know - Circuit City Stores, Inc. v. Adams, ___ U.S. ___ (2001)

Article summary.By a 5-4 vote, the United States Supreme Court ruled that a clause in an employment application requiring disputes to be settled through binding arbitration was legally enforceable. As a result, the Court threw out a lawsuit brought by an employee for alleged violations of a state nondiscrimination law and ordered the dispute to be resolved through arbitration. The Court did not address whether arbitration clauses in employment applications and contracts can preempt the EEOC of jurisdiction to process discrimination claims under federal laws. That issue will be addressed by the Supreme Court in another case later this year. However, the Court's conclusion that employers can compel employees to resolve their disputes under state law through binding arbitration is a significant victory for employers. Unlike federal law, most state nondiscrimination laws contain no limit on money damages and so the biggest exposure to liability is for state law violations. This article reviews the Court's historic ruling, describes the many advantages of arbitration, and provides church leaders with information that will help them evaluate whether or not they should implement an arbitration policy for employees.

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Posted: July 2, 2001
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