In Tucker v. Money Group, the Puerto Rico Supreme Court upheld the enforceability of an arbitration clause in an individual employment agreement, where the former employee asserted claims for wrongful termination and sex discrimination.
The Court held that arbitration clauses in privately negotiated employment contracts affecting interstate commerce are governed by the Federal Arbitration Act (FAA) and are enforceable against statutory discrimination claims under local laws, including Puerto Rico Act No. 100. Relying on Gilmer v. Interstate/Johnson Lane Corp., 500 US 20 (1991), and the FAA, the Court reaffirmed that valid arbitration agreements between private parties remain binding despite claims under local discrimination statutes.
The Court also distinguished that the exception recognized in Quiñones v. Asociación, 161 DPR 668 (2004), applies only to unionized employees covered by collective bargaining agreements, not to individual employment contracts. However, the Court clarified that certain sexual harassment claims under Puerto Rico Act No. 17 remain subject to a recognized exception to compulsory arbitration.
Read the full Opinion.
Employers are encouraged to review their employment agreements and evaluate whether to incorporate arbitration provisions, where appropriate.
Authors: Stella González, Wilfredo Soto Suarez & Nydin M. Watlington-Castro
