Supreme Court Upholds Right to Sue Over Harassment : Legal: The U.S. high court let stand a ruling that two women could ignore a company’s rule requiring arbitration.
In a case closely watched by companies and employees, the Supreme Court on Monday let stand a ruling in a Los Angeles dispute that allows two women to ignore a company’s rule requiring arbitration and sue for damages in court over alleged sexual harassment.
Separately, the court on Monday allowed a Philadelphia woman to sue Pfizer Inc. and its Irvine-based unit, Shiley Inc., over claims relating to the removal of an artificial heart valve, giving hope to many others nationwide with similar claims.
In the sexual harassment ruling, the high court’s action comes as something of a surprise. Over the last four years, the justices have insisted on enforcing agreements requiring that disputes be settled by arbitration, even when that means a worker loses the right to sue over job discrimination.
Those rulings have encouraged employers nationwide, and especially those in the securities industry, to require employees to sign arbitration agreements as a condition of employment.
Companies say that arbitration is faster and cheaper than litigation in federal court, which can drag on for years. However, civil rights lawyers say that aggrieved employees may be forced to go before a pro-business arbitration panel and that, even if they win, they fail to gain substantial damages for discrimination based on their race, gender, age or national origin.
The case involves Justine Lai and Elvira Viernes, employed as sales representatives in Los Angeles by the Prudential Insurance Co., who claim that a manager forced them into having sex with him. They filed a lawsuit seeking a jury trial and damages.
But the company said that the women should take their complaint to arbitration. They had signed a standard industry agreement that says that they will arbitrate “any dispute, claim or controversy” under rules set by the National Assn. of Securities Dealers.
In the Pfizer heart valve case, the court, without comment, refused to consider the pharmaceutical giant’s argument that Nina Michael of Philadelphia could not sue because federal regulators had given clearance to Pfizer to market the valve.
In other business cases, the court:
* Indicated that American affiliates of Japanese companies can give preferential treatment to Japanese executives without violating federal anti-discrimination laws (Papaila vs. Uniden America, 95-171).
* Refused to revive a controversial settlement plan offered by General Motors Corp. that would have given owners of pickup trucks a $1,000 coupon for buying a new one (General Motors vs. French, 94-2137). In a class-action lawsuit, more than 5 millions owners of these trucks made between 1973 and 1991 were seeking damages based on complaints that the vehicles were unsafe.
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Savage reported from Washington and Marsh from Orange County.
