The Federal Arbitration Act Precludes New York from Exempting Claims from Arbitration

When parties to a contract agree to settle any claims that may arise between them through arbitration, the Federal Arbitration Act (the FAA) sets forth a national policy favoring arbitration. As a matter of public policy, however, New York has sought—through the 2018 enactment of §7515 of the New York Civil Practice Law and Rules—to exempt certain types of claims from arbitration, including claims alleging discrimination under the New York State Human Rights Law. Through §7515, New York seeks to provide those who claim to have been victimized by sexual assault a public forum in which to air their grievances.

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Arbitration Agreement Does Not Bar New York State Division of Human Rights Proceeding

Earlier this month, the federal court for the Western District of New York issued a decision in Charter Communications, Inc. v. Derfert, No. 20-cv-915, 2021 WL 37726 (W.D.N.Y. Jan. 4, 2021) holding that an employment arbitration agreement did not preclude a hearing before the New York State Division of Human Rights (the Division) on an employee’s discrimination claim.

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