On March 21, 2001, in a 5-4 decision, the United States Supreme Court ruled employers can require employees to submit workplace disputes to binding arbitration, under a mandatory arbitration agreement. The case, Circuit City Stores, Inc. v. Adams No. 99-1379, 532 U.S. ____ (2001), resolves a conflict among lower federal courts over whether employees could be forced to arbitrate their employment discrimination disputes under state civil rights laws and tort claims. This decision represents a significant victory for employers who want to create alternative dispute resolution systems for their employees. The Supreme Court endorsed the use of arbitration to resolve workplace disputes under the Federal Arbitration Act ("FAA"), a 76-year-old law that requires enforcement of valid arbitration agreements. The FAA, however, does not apply to employment contracts in the maritime, railroad, and other transportation industries. Thus, employers in those industries cannot compel employees to enter
