Summary
In Matter of Wertheim Co. v Halpert (48 N.Y.2d 681), this Court held that because of the strong public policies embodied in Federal, State and local antidiscrimination laws, anticipatory agreements to arbitrate are unenforceable in the context of disputes involving claims of unlawful discrimination.
Summary of this case from Fletcher v. Kidder, PeabodyOpinion
Argued September 11, 1979
Decided October 11, 1979
Appeal from the Appellate Division of the Supreme Court in the First Judicial Department, MARTIN EVANS, J.
James P. Durante and Douglas P. Catalano for appellant.
Jonathan M. Plasse and Robert S. Churchill for respondent.
MEMORANDUM.
The order of the Appellate Division should be affirmed, with costs.
Although arbitration is a favored method of dispute resolution, arbitration agreements are unenforceable where substantive rights, embodied by statute, express a strong public policy which must be judicially enforced (Matter of Sprinzen [Nomberg], 46 N.Y.2d 623; see, also, Matter of Aimcee Wholesale Corp. [Tomar Prods.], 21 N.Y.2d 621). This is especially true in the area of discrimination where particular remedies are afforded by both State and Federal statutes (see 300 Gramatan Ave. Assoc. v State Div. of Human Rights, 45 N.Y.2d 176, 183-184).
Allowing the petitioner to pursue its claim in arbitration at this time risks chilling the exercise of the statutory right and poses the possibility of inconsistent verdicts in the two proceedings.
Indeed, in the case at bar, the claim sought to be arbitrated, arising as it does out of a claim of discriminatory conduct in employment, is presently the subject of an action pending in Federal court under section 2000e et seq. of title 42 of the US Code, title 7 of the Civil Rights Act of 1964. Although an award in arbitration could not bind the Federal court (see Alexander v Gardner-Denver Co., 415 U.S. 36) a verdict in the Federal proceeding might well be res judicata in any arbitration proceeding.
Chief Judge COOKE and Judges JASEN, GABRIELLI, JONES, WACHTLER, FUCHSBERG and MEYER concur in memorandum.
Order affirmed.