The Massachusetts Supreme Judicial Court is slated to decide whether employers can use arbitration provisions in hiring contracts to prevent employees from filing bias claims with the Massachusetts Commission Against Discrimination and the U.S. Equal Employment Opportunity Commission.

In Joulé Inc., et al. v. Simmons, et al., the SJC is being asked to determine whether an employee who signed an arbitration agreement referencing discrimination claims waived her right to file a complaint with the MCAD and EEOC. The decision could clarify the commonwealth’s role in enforcing laws against bias when arbitration provisions are involved.

The employee’s attorneys argue, in part, that the arbitration agreement should not be enforced because it is unclear and therefore does not meet the statutory requirements the SJC established in Warfield v. Beth Israel Deaconess Medical Center. They also say the agreement is invalid because it is “unconscionable, unfair in the circumstances” and “offends public policy.”

The employee is represented by Barbara A. Robb, Nancy S. Shilepsky, Shana I. Kaplan and Andrew P. Hanson, all of Shilepsky, Hartley, Robb, Casey, Michon in Boston.

MCAD, a defendant intervener in the case, focuses its argument on G.L.c. 151B, §5, saying in its brief that the public enforcement process for discrimination claims “cannot be abridged by the existence of a private arbitration agreement.”

MCAD attorneys Beverly I. Ward and Catherine Ziehl did not return messages seeking comment.

The plaintiffs’ attorneys, Thomas A. Reed, Herbert L. Holtz and Eugene J. Sullivan III, of Holtz & Reed in Boston, requested that the employee be required to pursue her discrimination claim in arbitration.

They contend that the arbitration provision was “stated in clear and unmistakable terms” and therefore meets the Warfield requirement of enforceability. They also argue that the agreement falls within the scope of the Federal Arbitration Act and the Massachusetts Arbitration Act.

“[The employee] may not revoke her agreement on grounds which have been routinely rejected by the courts or have no bearing on her own case and claims,” the appellant brief states.

Discrimination complaint

In April 2008, Randi Simmons was hired as a branch manager at the Boston office of Joulé, a staffing company headquartered in New Jersey. She says she was asked to sign a pre-employment contract containing the arbitration provision, but only after she was hired and had turned down another job offer.

The agreement said any discrimination claims against the company would be resolved by binding arbitration through either the American Arbitration Association or the Judicial Arbitration and Mediation Service.

Simmons was fired in July 2009. Joulé said she was “helping to sabotage the success of other team members, who she often second guesses and criticizes.” But she claims she was dismissed because she became pregnant.

After Simmons filed discrimination complaints with the MCAD and EEOC, Joulé sued her in Superior Court in an attempt to enforce the arbitration agreement. The judge ruled against Joulé, finding that the arbitration agreement “does not preclude Simmons from being a party to the MCAD action.”

‘Seeking guidance’

Employment attorneys are watching Joulé because MCAD’s enforcement powers are at stake, and because the court could issue a broad decision offering general guidance to lawyers for crafting enforceable arbitration provisions, said Reed, the plaintiffs’ attorney.

“I don’t think there’s been a SJC case since Warfield that has further interpreted the use and enforceability of arbitration agreements in employment law,” he said. “I think practitioners are looking at this case and seeking additional guidance from the SJC. The court could essentially give advice to practitioners, or it could offer a very narrow opinion.”

The New England Legal Foundation and Associated Industries of Massachusetts have filed an amicus brief on behalf of the plaintiffs. They say a ruling in favor of the defendants would make arbitration agreements “a dead letter in the Commonwealth” and would “violate the public policy favoring arbitration long recognized by this Court.”

Meanwhile, the attorney general, Massachusetts Employment Lawyers Association and American Civil Liberties Union have filed amicus briefs asking the SJC to uphold the lower court’s decision.

The ACLU called the case a common example of an arbitration agreement being offered on a “take-it or leave-it basis,” which places employees at a disadvantage.

The Employment Lawyers Association said MCAD’s “prosecutorial presence is crucial to support the Commonwealth’s overriding public policy to prohibit discrimination.”

Finally, the AG urged the SJC to follow the U.S. Supreme Court’s ruling in EEOC v. Waffle House Inc. The court ruled that private arbitration agreements do not prevent EEOC enforcement actions.

Growing trend

A case similar to Joulé cropped up a year ago when the Massachusetts Bar Association sued a former employee in Superior Court, alleging that she had violated the terms of her employment contract by filing an MCAD complaint after she was fired.

The contract contained a binding arbitration clause, but the court ruled against the MBA after MCAD intervened. The case, Massachusetts Bar Association v. Wellington, is pending on appeal.

MCAD has also intervened in another case involving the penetrability of arbitration agreements: Lia Northampton Inc. v. Mantha, which also has not been affirmed by an appeals court.

“This is a new attempt that employers seem to be making,” Robb said of the arbitration provision-related challenges to MCAD’s enforcement powers. “We see this as something that really needs to be cleared up.”