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Hooters’ Employee Not Bound to Dispute Arbitration Agreement

The 4th U.S. Circuit Court of Appeals has confirmed lower court rulings that former Hooters waitress and bartender Annette R. Phillips has the right to reject company-mandated arbitration and instead bring her sexual harassment charges before a court.

The three judges of the 4th Circuit unanimously agreed that the restaurant chain’s arbitration policies are biased strongly in the favor of the company and thus unfair to employees. Under Hooters’ arbitration rules, an employee making an complaint is required to provide a list of witnesses, while Hooters’ management is not required to do the same. Hooters’ is allowed to expand the scope of the arbitration hearing, while a complainant is not. The company also reserves the right to choose which 3 individuals will serve as “judges” in the arbitration hearing.

New employees of Hooters must sign an agreement stating that, in the case of a workplace dispute, the employee will settle his or his complaint using the company’s arbitration system, protecting the company from costly lawsuits. Hooters tried to force Phillips into abiding by this agreement by taking her to federal court, but lost that battle.

Judge Harvie Wilkinson III wrote in the judges’ decision, “By promulgating this system of warped rules, Hooters so skewed the process in its favor that Phillips has been denied arbitration in any meaningful sense of the word.” The decision also stated that, “Taken as a whole, the Hooters [arbitration] rules…..are so one-sided that their only possible purpose is to undermine the neutrality of the proceeding.”

The Hooters restaurant chain is best-known for its female waitresses, who wear uniforms consisting of tight, low-cut tank tops and tiny short-shorts. The company logo features an owl whose wide eyes could be construed to depict either a man’s ogling eyes or women’s breasts, which are sometimes referred to as “hooters” in slang.

Sources:

AP - April 8, 1999

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