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EEOC case over restaurant's mandatory arbitration policy can proceed

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A federal judge has refused to dismiss a claim filed by the U.S. Equal Employment Opportunity Commission against a restaurant chain over the issue of its requirement that job applicants sign mandatory arbitration agreements.

The firm's attorney said the company, Allendale, New Jersey-based Doherty Enterprises Inc., has not violated the law, and that it expects to prevail in the dispute.

The EEOC said Tuesday that Doherty, which owns and operates more than 140 franchise restaurants, including Applebee's and Panera Bread, throughout Florida, Georgia, New Jersey and New York, required prospective employees to sign mandatory arbitration agreements in violation of Title VII of the Civil Rights Act of 1964.

The agency filed a lawsuit against the chain in the U.S. District Court in West Palm Beach, Florida, in September 2014. The court refused to dismiss the case against Doherty, which had argued the EEOC's lawsuit could not proceed because it was not premised upon a discrimination charge, and because the EEOC had not engaged in presuit conciliation, which is required under other sections of the statute, the EEOC said in a statement.

The EEOC said the court found that the section of Title VII in question, Section 707, permits the EEOC to seek immediate relief without the same presuit administrative process that is required under another section of Title VII.

It also rejected Doherty's argument that the EEOC is limited to claims of discrimination and retaliation under Section 707.

Title VII's Section 707 says actions can be filed against firms when there is “reasonable cause to believe that any person or group of persons is engaged in pattern or practice of resistance to the full enjoyment” of rights protected by Title VII.

“The court's order recognizes EEOC's critical role in eradicating employment discrimination,” Robert E. Weisberg, Miami-based EEOC regional attorney, said in a statement.

“Employers cannot immunize themselves from federal oversight by prohibiting employees from filing discrimination charges and communicating with EEOC. As the court held, Title VII gives the agency the authority to take immediate action to challenge the use of these types of overly broad arbitration agreements,” Mr. Weisberg said.

“Doherty is confident that further proceedings will reveal the flaws in the EEOC's position that the arbitration agreement does not violate Title VII no matter how the agency frames its arguments,” Doherty's attorney, Dena B. Calo a partner with Saul Ewing L.L.P. in Princeton, New Jersey, said in a statement. “Doherty continues to believe that the case has no merit and will vigorously defend against it.”