Arbitrating Discrimination Claims: Has its Time Come?
By: RICHARD A. ROSS
August 1999
The Minnesota Court of Appeals recently enforced an employment agreement requiring an employee to submit his discrimination claim to an Arbitrator. In Correll v. Distinctive Dental Services, P.A., the Court required the Plaintiff to submit his marital status discrimination claim (pursuant to the Minnesota Human Rights Act) to arbitration in accordance with the rules of the American Arbitration Association ("AAA").
Bryan Correll ("Correll"), a dentist, signed an employment agreement with his employer, Distinctive Dental Services, P.A. ("DDS"), that required any controversy or claim arising out of his employment to be settled by arbitration before the AAA. The agreement also provided that during his employment with DDS, Correll would not compete with DDS within seven miles of its offices.
After signing the employment agreement, Correll's wife, who was also a dentist, joined a competing dental practice within seven miles of DDS' offices. DDS terminated Correll's employment, claiming a breach of his non-compete clause. Correll filed a marital status discrimination charge with the Minnesota Department of Human Rights against DDS. After a Hearing was ordered before an Administrative Law Judge, DDS filed a demand for Arbitration before the AAA. Correll then went into District Court and successfully brought a motion to stay arbitration. DDS appealed and the Court of Appeals reversed.
In its legal analysis, the Minnesota Court of Appeals determined that the Minnesota Human Rights Act did not preclude arbitration under the "exclusivity" provision of the law. The Court also held that Minnesota had a strong public policy favoring arbitration agreements and acknowledged the "overwhelming recognition that Title VII claims are subject to consensual agreements to arbitrate ..."
Assuming the decision is not overruled by the Minnesota Supreme Court, discrimination claims under the Minnesota Human Rights Act, similar to claims under Title VII of the Civil Rights Act of 1964, as amended, (See: Patterson v. Tenet Healthcare, Inc., a 1997 Federal 8th Circuit Court of Appeals decision) are now potentially subject to mandatory arbitration.