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Restaurant Chain Accused of Violating Federal Law by Mandating Arbitration

Tuesday, September, 15, 2015

A federal judge recently refused to dismiss a claim filed against a restaurant chain over issues related to its mandatory arbitration requirement for job applicants. The claim was filed by the US Equal Employment Opportunity Commission. The attorney for the company, Doherty Enterprises, Inc., stated publicly that his client did not violate the law and that he expected to be victorious in the dispute.


The Equal Employment Opportunity Commission claims that Doherty required applicants to sign mandatory arbitration agreements and that requirement was in violation of the Civil Rights Act of 1964. Doherty owns more than 140 franchise restaurants throughout Florida, New Jersey, Georgia, and New York, including Panera Brad and Applebee’s establishments.


The lawsuit was filed against Doherty in September 2014. Doherty requested the case be dismissed, but the court refused. Doherty argued the lawsuit could not proceed because it was not premised on discrimination and because the Equal Employment Opportunity Commissions had not participate in pre-suit conciliation, required under the statute.


The court found the agency is free to seek immediate relief without pre-suit actions in such a case. It also rejected the company’s argument that the agency is limited to filing suit only based on discrimination. The court found the agency is free to file suit against company when there is “reasonable cause to believe that any person or group… is engaged in… the full enjoyment” of rights protected under the law.


Speaking on behalf of his client, the Doherty attorney stated he is confident further proceedings will reveal flaws in the actions of the agency and that his client’s policies do not violate the law in any way.