Employees Must Arbitrate Discrimination Claims Only If Arbitration Agreement States Clear Intention

In Warfield v. Beth Israel Deaconess Medical Center, Inc., the Massachusetts Supreme Judicial Court (SJC) held that an employment contract purporting to waive or limit an employee’s rights under the Massachusetts anti-discrimination statute is enforceable only if the intent to do so is stated in “clear and unmistakable terms.”

Carol Warfield, the former chief of anesthesiology at Beth Israel Deaconess Medical Center (BIDMC), filed an action in Massachusetts Superior Court, alleging gender discrimination and retaliation in violation of Massachusetts General Laws ch. 151B (Chapter 151B). BIDMC moved to dismiss the action and compel arbitration of Warfield’s claims based on an arbitration provision in her employment agreement, which stated: “Any claim, controversy or dispute arising out of or in connection with this Agreement or its negotiations shall be settled by arbitration.” The Superior Court denied BIDMC’s motion finding that the arbitration clause in Warfield’s employment agreement did not cover her discrimination and retaliation claims “because the agreement did not govern her employment relationship . . . generally, but only the narrow topic of her duties as chief of anesthesiology, and the claims of discrimination fell outside this narrow topic.”

On appeal by BIDMC, the SJC agreed with the lower court. Specifically, the Court held that while “parties to an employment contract are free to agree on arbitration of statutory discrimination claims . . . parties seeking to provide for arbitration of statutory discrimination claims must, at a minimum, state clearly and specifically that such claims are covered by the contract’s arbitration clause.”

This decision provides clarity to Massachusetts employers regarding the use of arbitration agreements. Unless the agreement clearly articulates that statutory discrimination claims are subject to arbitration, courts in this Commonwealth will not compel arbitration of those claims. Due to the potential ramification of this decision, employers are well advised to review the arbitration provisions of all their employment agreements.