WASHINGTON -- The federal agency assigned to root out discrimination on the job can seek money or other damages in court for employees who have signed away their own rights to sue, a divided Supreme Court ruled Tuesday.
In a setback for employers, the high court held that the Equal Employment Opportunity Commission may sue on behalf of a short-order cook fired after he had a seizure at a Waffle House restaurant.
Like around 10 percent of American workers, Eric Scott Baker agreed when he was hired that any on-the-job dispute would be resolved by arbitration.
The EEOC did not sign such an agreement, and is not bound by it, Justice John Paul Stevens wrote for the majority.
The EEOC is "the master of its own case," and free to decide for itself whether it is in the public's interest to pursue a given lawsuit, Stevens wrote for himself and Justices Sandra Day O'Connor, Anthony M. Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen Breyer.
The agency had argued it should be able to ignore an arbitration agreement if pursuing the case would help employees in general or would make examples of employers who mistreat their workers.
Justice Clarence Thomas, a former EEOC chairman, found himself on the losing side of a ruling that establishes the agency's power to seek back pay and similar damages.
"I cannot agree that the EEOC may do on behalf of an employee that which an employee has agreed not to do for himself," Thomas wrote on behalf of himself, Chief Justice William H. Rehnquist and Justice Antonin Scalia.
Also Tuesday, the court heard arguments in two cases involving worker firings. Justices will decide how easy it is to sue for discrimination and what rights illegal immigrant workers have when mistreated by employers.
In the discrimination case, justices will spell out how much information must be included in lawsuits like the one Akos Swierkiewicz filed claiming he was fired because of his age (50) and origin (Hungarian). The court is considering reinstating his lawsuit.
Justices also will decide if illegal workers have rights to back pay just as American workers do when they are wrongly fired. The Bush administration argued that they are.
Arbitration, favored by many employers as cheaper, faster and more predictable than courtroom fights, involves an outside expert whose decision to settle a dispute is final.
Baker never went through that process. Instead, he went to the EEOC with his claim that Waffle House violated his rights under the Americans With Disabilities Act.
Many of those covered by arbitration agreements are low-wage workers like Baker. He agreed to arbitration as a condition of getting his minimum-wage job as a grill operator in West Columbia, S.C.
The high court's reasoning in his case would apply whether a worker sought arbitration or not -- the EEOC may still seek individual damages on a worker's behalf.
The Baker case is hard to square with the court's ruling last year that arbitration contracts are enforceable in federal court, employment lawyers said.
"What this takes away from the arbitration program is finality," said Lawrence Lorber, a Washington lawyer who represents employers. "For everybody concerned, that is one of the major reasons to have an arbitration agreement, rather than have the case meander around in court for years and years."
The decision may have little direct effect on individual workers. That is because the EEOC sues in fewer than 1 percent of employment discrimination cases brought to the agency. In 2000, the agency went to court in about 400 out of nearly 80,000 complaints.
"The probability of any particular arbitration agreement being harmed by this is practically zero," but the possibility that the EEOC could sue will keep employers on their toes, said Thomas Osborne, a lawyer for AARP, which filed a friend of the court brief supporting Baker.
"The language of business is money. They understand that, and they understand the effect of large damage awards."
Baker's case now goes back to a lower federal court to determine if Waffle House should have made accommodations for Baker's disorder.
The case is EEOC v. Waffle House, 99-1823.