State of Wisconsin

Labor and Industry Review Commission




Fair Employment Decision[1]







Dated and Mailed:



ERD Case No. CR201700593


EEOC Case No. 26G201700576C

March 13, 2018




The decision of the administrative law judge (copy attached) is affirmed.  Accordingly, the dismissal of the complaint is affirmed.



By the Commission:





Georgia E. Maxwell, Chairperson







Laurie R. McCallum, Commissioner







                                                                                                                                                                David B. Falstad, Commissioner



Procedural History

On February 27, 2017, complainant filed a claim with the Equal Rights Division of the Department of Workforce Development (hereinafter “ERD” or “DWD”), alleging that he was discharged from his employment in retaliation for having opposed discrimination in the workplace, in violation of the Wisconsin Fair Employment Act (“WFEA”), Wis. Stat. §§ 111.31-111.395.  On August 7, 2017, an ERD equal rights officer issued an initial determination finding no probable cause to believe that discrimination occurred.  Complainant filed a timely appeal and the matter was certified to hearing on the issue of probable cause.


On September 25, 2017, respondent filed a “Motion to Compel Arbitration” in which it argued that complainant had signed an employment agreement that contained a mandatory arbitration clause and, therefore, complainant's ERD complaint should be dismissed in deference to arbitration.  Complainant submitted a response on October 19, 2017.  On October 27, 2017, the administrative law judge issued an Order of Dismissal based upon the mandatory arbitration provision in the employee agreement.  On November 17, 2017, complainant petitioned for commission review of that decision.


Memorandum Opinion

When complainant began his employment with respondent on April 28, 2016, he signed an Employee/Employer Agreement, which included a provision mandating arbitration for the resolution of all employment disputes, including discrimination claims.  (Respondent's Brief in Support of its Motion to Compel Arbitration (“Resp. Brief”), Exh. 1, ¶ 6)  In August, 2016, complainant was promoted to assistant department manager at a different store, at which time he signed (albeit electronically) the 2016 Employee Agreement.  The acceptance page of the 2016 Employee Agreement put complainant on notice that “[a]ny and all claims shall be resolved by binding arbitration” (Id., Exh. 2), and the agreement incorporated by reference respondent's Manual for Department and Assistant Department Managers (the “Manual”), which included the following provision:


8. Remedy; Arbitration. In consideration of employment, or continued employment, or promotion, you agree that all problems, claims, and dispute(s) experienced within your work area and/or related to your employment with Menards, if you are currently employed by Menards shall first be resolved as outlined in the Team Member Relations section of the Grow With Menards Team Member Information Booklet, which is posted on MyMenards intranet site.  If you are unable to resolve the dispute by these means, choose not to utilize such means, or you are no longer employed by Menards you agree to submit your dispute(s) to final and binding arbitration. Problems, claims, or disputes subject to binding arbitration include, but are not limited to: statutory claims under 42 U.S.C. § 1981, the Age Discrimination in Employment Act (ADEA), Fair Labor Standards Act (FLSA), Title VII of the civil Rights Act of 1964, Title I of the Civil Rights Act of 1991, Americans with Disabilities Act (ADA), Family Medical Leave Act (FMLA), and non-statutory claims such as contractual claims, quasi-contractual claims, tort claims, and any and all causes of action arising under state laws or common law.  Menards agrees that it shall submit any and all claims it may have, if any, in compliance with this section, except as provided in paragraph 8 of this Manual.


*     *     *


  This provision constitutes an express waiver of the right to court, jury, or administrative review or to participate in a class action.


Nothing in this Manual infringes on your ability to file a claim or charge of discrimination with the U.S. Equal Employment Opportunity Commission or comparable state or local agencies.  These agencies have the authority to carry out their statutory duties by investigating the charge, issuing a determination, filing a lawsuit in Federal or state court in their own name, or taking any other action authorized under these statutes.  You understand that you have the right to participate in such action.  If you file a complaint or charge with any federal, state, or local administrative agency, such agency will have exclusive jurisdiction until they either dismiss your complaint or charge or issue a “Right to Sue” notice to you.


Menards is engaged in commerce using U.S. Mail and telephone service.  Therefore, this Manual is subject to the Federal Arbitration Act, 9 U.S.C. §§ 1-16, as amended from time to time.


(Id., Exh. 5 at 10-11)(emphasis in original). 


The 2016 Employee Agreement and the referenced Manual to which complainant agreed requires him to resolve all employment-related disputes, including those concerning alleged discrimination, pursuant to arbitration.  Agreements to arbitrate federal and state employment discrimination claims are enforceable, subject to “such grounds as exist at law or in equity for the revocation of any contract.”  Federal Arbitration Act (“FAA”), 9 U.S.C. § 2; Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001); Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991).   


Arbitration and similar agreements often contain an additional provision waiving the right to file a claim in the normal forum.  Whether they contain such a provision or not, however, the agreements will also typically provide for – as the arbitration agreement does in this case – a limited “right to file” and/or “right to participate” in proceedings before the U.S. Equal Employment Opportunity Commission (“EEOC”) and certain other agencies.  These provisions evolved principally out of the insistence by the EEOC and the federal courts that any limitations on the right to file a charge or participate in an EEOC investigation were void as against public policy since they interfere with the investigative and enforcement jurisdiction of the EEOC.[3]


… “[T]he EEOC is not merely a proxy for the victims of discrimination....  Although [it] can secure specific relief, such as hiring or reinstatement..., on behalf of discrimination victims, the agency is guided by ‘the overriding public interest in equal employment opportunity ... asserted through direct Federal enforcement.'” … A strong public policy prohibits interference with governmental law enforcement activities.  


*     *     *


A strong public policy interest also prohibits interference with the right to file a charge with EEOC.    This notice to the EEOC serves to trigger law enforcement proceedings by the EEOC that include an investigation and, if there is a finding of discrimination, may include conciliation and litigation. Thus, every charge filed with the EEOC carries two potential claims for relief: the charging party's claim for individual relief, and the EEOC's claim “to vindicate the public interest in preventing employment discrimination.”  [[4]]


Because these right-to-file/right-to-participate provisions are required principally to protect the investigative and enforcement jurisdiction of the EEOC, and not as a means of vindicating the individual rights of the employee signatory to the underlying agreement,[5] they are often referred to as “agency rights” clauses.  The question presented in this case is what effect, if any, the particular agency rights clause at issue has on the mandatory arbitration agreement, and on ERD's jurisdiction to investigate and enforce complainant's case notwithstanding the agreement to arbitrate.


With regard to the application of agency rights provisions, the commission is not working with an entirely blank slate.  Recently, the commission decided Xu v. Epic Systems, ERD Case No. CR201301600 (LIRC Oct. 24, 2017).  In Xu, the employee was terminated by the employer and, in exchange for certain severance benefits, executed a general release and waiver of all employment claims that included an agency rights provision protecting the employee's “right to file a charge or complaint with administrative agencies such as the federal EEOC that I cannot be prohibited from or punished for filing as a matter of law.”  Notwithstanding the release, the employee filed a WFEA claim with ERD.  After a somewhat tortured procedural history, ERD concluded that the waiver was knowing and voluntary, and dismissed the complaint.  The employee appealed.  The commission ruled that “the language used in the severance agreement … was intended to preserve the complainant's right to file a complaint with the ERD,” and remanded the case back to ERD.  In doing so, however, the commission noted that if discrimination is subsequently found, “the complainant will not be eligible for back pay, reinstatement, or any other type of individual relief that might ordinarily be awarded as a result of such finding, having waived his right to such relief.”


When deciding Xu, the commission did not have before it the decision of the Wisconsin Court of Appeals in Menard, Inc. v. DWD and Fenhouse, App. No. 2015AP587 (Wis. Ct. App. 2016)(unpublished),[6] a decision which respondent offered in support of its Motion to Compel Arbitration.  In Fenhouse, the employee had, at the beginning of his employment, entered into a mandatory arbitration agreement with an agency rights clause essentially identical to the one before us.  Nevertheless, the employee filed a claim with ERD alleging that the termination of his employment violated the WFEA.  When ERD certified the case for hearing, the employer filed a Motion to Stay further proceedings in deference to arbitration.  After ERD denied the motion, the employer filed a complaint in circuit court seeking a writ of prohibition against ERD proceeding with the case.  The writ was granted by the circuit court on the grounds that ERD lacked jurisdiction, and on appeal that decision was affirmed.


As an unpublished decision, Fenhouse is not controlling authority.  Wis. Stat. § 809.23(3)(b).  However, after reviewing the Fenhouse decision, the commission has found DWD's own representations concerning its authority and jurisdiction, as well as the court's analysis of the issues, to be both instructive and generally persuasive.  Consequently, the commission has revisited its decision in Xu, and issues this opinion in order to bring needed clarity to this important area.


Unlike the broad investigative, enforcement and prosecutorial authority granted to EEOC, the protection of which is at the root of agency rights provisions,[7] ERD's statutory authority is limited to that of an adjudicative body charged with deciding particular disputes that are filed with it.  Wis. Stat. § 111.39(4)(a).  This point was made clear by DWD itself in Fenhouse, where it asserted that ERD, “unlike the EEOC and perhaps other states' employment-law agencies, has no independent ability to prosecute claims for violations of the WFEA. Rather, the DWD's only statutory role in enforcing the WFEA is to adjudicate claims between employers and their employees.”  Fenhouse ¶ 24 (emphasis in original).  Consequently, where an employee has agreed to waive his or her discrimination claim against an employer, or to have it adjudicated in another forum, there remains no ancillary ERD authority that requires protection.[8]


As a result, for purposes of agency rights provisions, ERD is not an agency comparable to the EEOC.  In the vernacular of the Enforcement Guidance's assertion that limitations on an employee's right to file a discrimination claim with the EEOC are necessarily “null and void as a matter of public policy,” ERD's authority is – unlike the EEOC's – limited to adjudicating “the charging party's claim for individual relief,” and ERD does not have broader authority to engage in “direct [governmental] enforcement … to vindicate the public interest in preventing employment discrimination.”  Therefore, the commission finds that the particular agency rights provision at issue in this case did not protect the right of complainant to file a claim with ERD.[9]  Moreover, unlike the EEOC, a waiver of the right to file a discrimination claim with ERD does not otherwise intrude upon ERD's investigative or enforcement authority, is consistent with the structure of the WFEA, is enforceable, and is not violative of either law or public policy.  To the extent that anything in Xu held otherwise, it is hereby overruled.[10]


Nevertheless, waivers of the right to file claims with governmental agencies and the exceptions thereto – such as the agency rights provision at issue here – are ultimately matters of contract.  As such, the parties can agree to whatever they want.  However, the parties cannot by contract impose obligations on ERD that are inconsistent with the authority granted to it under the WFEA.  For example, parties could enter into a settlement agreement with a waiver of claims, but notwithstanding our holding above expressly protect the employee's right to file a claim with the ERD.  As noted above, however, ERD is an adjudicative body, and once the individual claim is waived (or, as in this case, required to be submitted to another forum for resolution) there remains no additional investigative, enforcement or other function for ERD to perform.


Again, Fenhouse addressed this apparent conflict between the agency rights language in the contract and the agency's statutory authority where it noted that, even where the agency rights language permits the individual to file with ERD, the fact that “the DWD apparently does not have such authority merely means that the notice in the agency-rights clause has limited import to Fenhouse vis-à-vis the DWD.”  Fenhouse ¶ 25.  Adopting DWD's own position that it had no statutory authority to do anything other than adjudicate the individual claim that was subject to the arbitration agreement, the Fenhouse court affirmed the circuit court's writ of prohibition on the grounds that ERD “lacks jurisdiction.”  Id. ¶ 11.  Similarly, the commission concludes that the parties' agreement to preserve the employee's right to file a claim with the agency cannot require – or even empower – ERD to investigate or adjudicate claims that have been waived or committed to an alternate forum for resolution, and holds that ERD is without authority to proceed with such claims.  Xu is hereby overruled.


Applying the above principles to the case at hand, the commission affirms the dismissal of the complaint.  Just as in Fenhouse, and as required by Circuit City and Gilmer, complainant's discrimination claim must be pursued in another forum pursuant to the parties' arbitration agreement.  And regardless whether the interpretation of the parties' agency rights provision either (i) fails to authorize complainant's right to file an ERD complaint in the first instance, or (ii) permits complainant to file some sort of complaint that falls outside the scope of the arbitration agreement but that ERD has no authority to process, the result is the same: the case must be dismissed, and the ALJ's decision is affirmed.


This conclusion accords with the commission's earlier decision in Carrington v. General Electric, ERD Case No. 200701080 (LIRC Apr. 30, 2010), in which the employee had committed, pursuant to an agreement that also contained an agency rights clause, to arbitrate any employment claim that the employee could otherwise pursue “in court.”  After concluding that the employee was free to file an ERD complaint since the arbitration agreement applied only to “court” proceedings and not to agency proceedings, the Carrington commission stated that if arbitration had been the “final, binding, and exclusive means for resolving all state claims, it would be arguable that the complainant's charge should be dismissed,” citing Circuit City Stores; Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (1995); and Southland Corp. v. Keating, 465 U.S. 1 (1984).


In his petition for review, complainant raises a handful of arguments, two of which warrant discussion.  The first is that he is not subject to the mandatory arbitration agreement at all.  He contends that his signature exists on only the original Employee/Employer Agreement, and that that agreement applies only to current employees and not to employees who have been discharged.  This argument fails.  First, while complainant may not have applied his signature to a hard copy of the 2016 Employee Agreement after his promotion to assistant department manager, respondent presented unchallenged documentation indicating that complainant had read online and agreed to the new employment agreement.[11]  Documents that are “electronically signed” (e.g., “click-through” agreements) are legally enforceable.  Wis. Stat. § 137.15.  Second, even assuming the suggestion in complainant's argument that the 2016 Employee Agreement was never agreed to, then the original Employee/Employer Agreement would control and its arbitration provisions are, in every material way, identical to the 2016 Employee Agreement.  The fact that the original Employee/Employer Agreement – unlike the 2016 Employee Agreement – does not expressly state that the arbitration requirement continues to apply once an employee ceases working for respondent is immaterial; it applies to “all problems, claims, and disputes experienced related to my employment area,” including discrimination claims, without qualification.  Absent adding qualifying language to the parties' agreement, which the commission cannot do, the only reasonable reading of the original Employee/Employer Agreement's mandatory arbitration provision is that it applies to all claims and disputes related to complainant's employment, whether or not a current employment relationship exists.


The second issue raised by complainant that warrants mentioning is his argument that the arbitration agreement is unenforceable under Wis. Stat. § 788.01, which states that the general enforceability of arbitration agreements provided for under Wisconsin statutes “shall not apply to contracts between employers and employees.”  Whether the parties' arbitration agreement is enforceable under Wis. Stat. § 788.01 is of no moment. As noted above, it is enforceable under the FAA and the Supreme Court's decisions in Circuit City and Gilmer.  To the extent there is any conflict between federal and state law, the FAA controls and any state law limitations must yield.  Circuit City, 532 U.S. at 122; Allied-Bruce, 513 U.S. at 272; Southland Corp., 465 U.S. at 16.


The commission has considered the remaining arguments raised by complainant in his petition, and finds them similarly unpersuasive.  Because the commission is satisfied that complainant is subject to an agreement which requires him to resolve his claims of employment discrimination pursuant to arbitration, the dismissal of complainant's discrimination complaint filed with ERD is affirmed.


[1] Appeal Rights:  See the green enclosure for the time limit and procedures for obtaining judicial review of this decision.  If you seek judicial review, you must name the Labor and Industry Review Commission as a respondent in the petition for judicial review.


Appeal rights and answers to frequently asked questions about appealing a fair employment decision to circuit court are also available on the commission's website


[2] The original complaint in this case identified the respondent employer as “Menards.”  Although certain documents in the record, including the Order of Dismissal from which complainant appeals, have referred to the employer as “Menards Corp.,” the employer has represented itself in this matter as “Menard, Inc.” (Respondent's April 4, 2017, Position Statement) without objection from the complaining party, and the caption has been so corrected.

[3] See, generally, Enforcement Guidance on Non-Waivable Employee Rights under Equal Employment Opportunity Commission (EEOC) Enforced Statutes, EEOC Notice No. 915.002 (Apr. 10, 1997) (hereinafter the “Enforcement Guidance”).

[4] Enforcement Guidance, Section III.A (quoting General Telephone Co. v. EEOC, 446 U.S. 318, 326 (1980).

[5] Indeed, even the EEOC has acknowledged that an employee who files with the EEOC may still be (i) required to submit his or her individual claim to arbitration if he/she so agreed, and (ii) denied the right to pursue individual recovery in an EEOC proceeding over a settled claim.   See, Enforcement Guidance, Sections III.A (citing Gilmer) and III.C.

[6] The Court of Appeals decision in Fenhouse can be found at:

[7] “The agency-rights clause itself shows it to be primarily intended to protect agencies' independent right to enforce employment laws….”  Fenhouse ¶ 21.

[8] There is, however, one exception that has been historically recognized, and that is ERD's very limited jurisdiction – subject to a complaining party's tendering back the consideration received under the agreement – to adjudicate a challenge to the enforceability of the waiver, arbitration agreement or similar commitment.  See Dotz v. Johnsonville Sausages, ERD Case No. CR201201749 (LIRC Nov. 30, 2015), and the cases cited therein.  Consequently, regardless the language in the underlying agreement, an employee would not be barred from filing a claim with ERD where the filing is limited, at least initially, to challenging the enforceability of the agreement.

[9] On this one point, the commission parts ways with Fenhouse.

[10] As noted in Xu, a secondary reason cited in the Enforcement Guidance for protecting the rights of individuals to file claims with the EEOC is the anti-retaliation provisions of civil rights statutes.  Yet, aside from public policy grounds, even the EEOC seems to acknowledge that such agreements are not automatically suspect since they “may also amount to separate and discrete violations of the anti-retaliation provisions of the civil rights statutes.”  Enforcement Guidance, Section II (emphasis added).  While anti-retaliation concerns are also present under the WFEA, Wis. Stat. § 111.322(3), such concerns are not implicated when an employer is simply seeking to enforce the benefit of the bargain it struck with the employee under the waiver or arbitration agreement and the alleged retaliation – barring ERD from entertaining claims that have been waived or committed by the parties' agreement to resolution in a different forum – has no nexus with either current or prospective employment.  See, e.g., deMoya v. Wisc. Dept. of Veterans Affairs, ERD Case No. CR201104078 (LIRC Dec. 12, 2013).

[11] Resp. Brief, Exh. 2 at 2.