Agreements to arbitrate workplace disputes are enforceable even if the employer required the worker to sign the agreement in order to be hired, the court said. Ruling 5-4 for Circuit City Stores, the justices said a gay former employee cannot sue over alleged harassment at work. Arbitration has increasingly been used to resolve a wide variety of disputes including employment discrimination claims. Supporters of arbitration say it is less complicated and less expensive than a lawsuit. But employees' advocates say the process can be tilted toward employers and that workers forfeit certain rights.
Appeals often are limited, damages can be capped and fact-finding can be restricted.
A number of federal appeals courts had ruled that employers could require arbitration of workplace disputes. But a San Francisco-based appeals court disagreed in 1999 and refused to enforce Circuit City's arbitration agreement. In 1997, Adams sued Circuit City in California state court, saying he resigned after being repeatedly harassed at work because he is gay. Circuit City asked a federal judge to rule that the 1925 Federal Arbitration Act required Adams to go to arbitration instead. The law makes commercial arbitration agreements enforceable in federal court.