Alternative dispute resolution, or “ADR,” refers to any procedure where the parties to a dispute ask a neutral third party to help them reach an agreement to avoid litigation. Arbitration is one such ADR procedure that is widely used in the employment setting. These FAQs provide basic information about arbitration and the effects that decisions in arbitration cases, to which OFCCP was not a party, may have on OFCCP enforcement activities.
- What is arbitration?
- When will OFCCP consider an arbitration decision?
- Does a binding arbitrator’s award affect OFCCP’s enforcement authority?
- If an employee arbitrates a discrimination claim, and OFCCP brings an enforcement action based on the same conduct, can the employee get a double recovery?
1. What is arbitration?
Arbitration is a form of ADR in which an arbitrator, rather than a judge or jury, applies the law to the facts of a dispute to resolve the dispute. There are two forms of arbitration: binding and nonbinding. Under binding arbitration, the parties agree to accept the arbitrator’s decision as final, limiting their right to seek resolution of the dispute by a court. But under nonbinding arbitration, if either party rejects the arbitrator’s decision, the parties are generally free to go to court in the regular way.
2. When will OFCCP consider an arbitration decision?
OFCCP may consider an arbitration decision (to which it is not a party) during a compliance evaluation or complaint investigation when its subject matter is relevant to the subjects that OFCCP enforces. Issues under OFCCP’s enforcement authority which may also be the subject of an arbitrated dispute between a contractor and employee include discrimination based on race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or status as a protected veteran, or whether employees inquired about, discussed, or disclosed their compensation or that of others.
3. Does a binding arbitrator’s award affect OFCCP’s enforcement authority?
No. An employment agreement may require an employee of a federal contractor to submit claims against the employer to binding arbitration. But the arbitrator’s award does not preclude OFCCP from exercising its enforcement authority over an employer who is a federal contractor or subcontractor. Cf. EEOC v. Waffle House, Inc., 534 U.S. 279, 293–96 (2002).
4. If an employee arbitrates a discrimination claim, and OFCCP brings an enforcement action based on the same conduct, can the employee get a double recovery?
No. An employee can seek remedies through arbitration with his or her employer and simultaneously file a complaint with OFCCP. But irrespective of the arbitration’s outcome, the employee is not entitled to a double recovery of monetary damages. Cf. Waffle House, 534 U.S. at 296–97.