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HR Magazine: The Facts of the Case 
 

7/1/2001   
 
 

HR Magazine, July 2001Vol. 46, No. 7

Order in the Hearing!

In Circuit City Stores v. Adams, (U.S., No. 99-1379, March 21, 2001), the employee—Saint Clair Adams—applied for a job as a sales clerk at a Circuit City store in Santa Rosa, Calif., in 1995. Two years later he sued the Richmond, Va.-based electronics retailer in state court for discriminating against him because he is gay. Circuit Citythen asked a federal court to stop the lawsuit and require arbitration.

Under the Federal Arbitration Act of 1925 (FAA), the only employees who cannot be forced to arbitrate are certain transportation employees, the Supreme Court ruled. Many appeals courts had reached the same conclusion, but the U.S. Court of Appeals for the 9th Circuit disagreed in the Circuit City case, finding that the FAA's exemption covered all employment agreements.

The high court's opinion knocks down the 9th Circuit's broad interpretation and pre-empts state laws banning mandatory arbitration to boot. Union arbitration, which is governed by collective bargaining agreements and separate laws, is not affected.

The Circuit City case has been sent back to the 9th Circuit.

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