Abstract

Excerpted From: Michael Z. Green, "Arbitration in Name Only": A Race Claims Mismatch, 27 Cardozo Journal of Conflict Resolution 235 (Symposium 2025) (114 Footnotes) (Full Document)

With arbitration's meteoric rise as a tool in resolving statutory employment discrimination matters beginning in the 1990s, concerns about lack of employee bargaining power received little consideration when raised in court challenges to the enforcement of employer-mandated agreements to arbitrate those claims. Only in rare circumstances, when an employer appeared to go to extremes in using its overwhelming bargaining power to implement an arbitration process so clearly unfair would a court find the agreement created an unfair "arbitration in name only" that should not be enforced.

Employers have become savvier in how they require employees to agree to resolve discrimination claims in arbitration as a condition of employment after experiencing thirty-five years of Supreme Court jurisprudence establishing mostly enormous support for enforcement pursuant to the Federal Arbitration Act (FAA). Congress has addressed these bargaining power differentials in at least one setting by amending the FAA to prohibit some sex-related discrimination claims from being subjected to pre-dispute arbitration agreements. Similar race-related discrimination claims have not received this same FAA protection.

A 2025 federal appellate decision permitting a football coach, Brian Flores, to proceed in court, rather than being ordered to arbitrate, provides a helpful analysis of power differentials when employees file statutory race discrimination claims. Because the agreement in Flores made the employer's principal executive officer the arbitrator, it represented an unenforceable ""arbitration in name only." This Article contends the Flores case shows exactly why employer use of power differentials to require arbitration of race-related claims must always be judged unenforceable as "arbitration in name only" and similar to sex-related claims.

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This Article has asserted that the decision by the United States Court of Appeals from the Second Circuit in Flores provides a great example of how an arbitration clause can go too far to not warrant enforcement. When imposed by the employer upon an individual employee to suppress his statutory race discrimination claims, the process was ultimately rejected as "arbitration in name only" by the Second Circuit. This Article contends that race discrimination claimants, with little bargaining power, should not have their statutory claims suppressed via any pre-dispute agreement to arbitrate. Instead, they should only be allowed to agree to arbitrate claims if they choose to do so, not when the employer has mandated it.

One option that some courts have taken when addressing unfair arbitration agreements that go overboard in limiting employee rights is to sever the offensive provisions.108 Examples of severed provisions by courts includes those that have reduced the statute of limitations or prohibited attorney's fees or punitive damages allowed by the statute.109 At least one court even severed an unfair provision similar to the one in Flores designating an arbitrator who works for the defendant.110 While a court might consider severance of offensive clauses in a pre-dispute arbitration agreement, when the claims involve racial discrimination, courts should follow the lead from Flores and refuse to enforce these "arbitration in name only" agreements, as a whole.111 Blanket refusals to enforce these agreements deter businesses from inserting "poison pills" attempting to prevent the overall rejection of their usage or limit businesses from including multiple offensive terms with the broader hope that severance of some terms will allow other improper terms to still make it into the arbitration process.112

When employers use their overwhelming bargaining power to pursue pre-dispute agreements to arbitrate that result in writing themselves out of the statutory regime Congress created to vindicate statutory race discrimination claims, only a blanket rejection of those actions would deter this improper use of their power differentials. Also, these unfair and one-sided agreements to arbitrate race discrimination claims should be treated similarly to claims related to sex discrimination, which are subject to blanket prohibitions from being mandated to arbitration. For the same reasons that Congress passed EFASASHA, including the power differentials that exist to deter or suppress the pursuit of those claims that Congress found important enough to provide a statutory regime to resolve,113 race discrimination claims by employees should not be enforced under the FAA for pre-dispute agreements.

Finally, as a pragmatic approach, businesses might abandon predispute arbitration of matters involving racial discrimination. These businesses may see the value in not sending a repressive message to individual Black workers when similar discrimination claims, if based on sex instead of race, could not be arbitrated due to EFASASHA.114 Although the NFL, with its history of dealing with concerns about race and the racial make-up of its workers and customers, still decided to insist that Flores must arbitrate his race discrimination complaints when it had to know that similar complaints based on sex discrimination could possibly be banned under EFASASHA. Only the NFL knows why it decided to continue to try to enforce arbitration of Flores' race discrimination claims when it was faced with this dilemma of inconsistent resolution processes after EFASASHA.

By deciding to continue with the litigation after the District Court refused to compel arbitration, the NFL forced the Second Circuit to find that the NFL's unusual use of its bargaining power to require that Flores agree to arbitrate his race discrimination claims should not be enforced. Without explicitly referencing EFASASHA, the Second Circuit found that the pre-dispute agreement in Flores underscored the same kinds of concerns about employer abuse of bargaining power that led to EFASASHA. By preventing an employee from being able to effectively vindicate a statutory discrimination claim through a fair public process, the result resembles the congressional result from EFASASHA. The NFL exercised its overwhelming bargaining power in an attempt to deny Flores' race discrimination claims from seeing the light of day in the courts by being relegated to a private arbitration process Flores never bargained for. As a result, the Second Circuit correctly decided that the arbitration agreement represented "arbitration in name only" that should not be enforced. Hopefully, other courts follow this reasoning, whether Congress or employers choose to do so or not.

Professor of Law, Dean's Research Chair, and Director, Workplace Law Program, Texas A&M University School of Law. I appreciate the thoughtful insights from Jean Sternlight, Myriam Gilles, and Homer La Rue about my comments that led to the draft of this Article, when offered during a panel on "Responding to Power Imbalances" at the Cardozo Journal of Conflict Resolution's Melnick Symposium on "The Next Century of Challenges for the FAA" held on November 7, 2025. I value Andrea Schneider's awesome support in inviting me to participate in this Symposium. I also thank all the Journal members for their outstanding coordination of the Symposium and for all edits related to making this Article evolve from its original draft to its completed form. I am grateful for the work by Texas A&M law school student research assistants, Shane Reynolds, Zaida Morgan, and Kaya Mason. This Article draws upon several of my published and unpublished writings over the past several years, including The Racial Implications for Black Claimants at the Federal Arbitration Act's Centennial, 41 Ohio St. J. on Disp. Resol. (Schwartz Lecture forthcoming 2026); Expanding the Ban on Forced Arbitration to Race Claims, 72 Kan. L. Rev. 455 (2024); Negotiating Race in the Workplace After Trump, 35 Harv. Negot. J. 195 (2019); Reconsidering Prejudice in Alternative Dispute Resolution for Black Work Matters, 70 SMU L. Rev. 639 (2017); and Can NFL Players Obtain Judicial Review of Arbitration Decisions on the Merits When a Typical Hourly Union Worker Cannot Obtain This Unusual Court Access?, 20 NYU J. Legis. & Pub. Pol'y 403 (2017) (co-author).