LANDMARK CASE ENFORCING MANDATORY ARBITRATION OF DISCRIMINATION CLAIM FILED IN LOCAL COURT BY EMPLOYEE AGAINST HER EMPLOYER UNDER ACT NO. 100-1959

In the landmark case Quiñones v. Asociación, 161 D.P.R. 668 (2004), the Supreme Court of Puerto Rico had the opportunity to assess the scope of an arbitration clause included in a collective bargaining agreement in the context of a discrimination claim filed in court under PR Act No. 100-1959. In that occasion, the Supreme Court found an exception to the mandatory arbitration rule and held that, despite the arbitration clause contained in the collective bargaining agreement, the unionized employee was free to pursue his discrimination claim in court without having to exhaust the remedial and grievance procedures set forth in the collective bargaining agreement.

Recently, in Kendall Hope Tucker v. Money Group, LLC, 2026 TSPR 9, the Supreme Court had the opportunity to assess whether the ruling in Quiñones v. Asociación, supra, extended to an arbitration clause included in a private employment contract executed by an individual employee directly with her employer. In this context, the Supreme Court held that arbitration clauses contained in valid contracts executed by an individual employee and their employer – as opposed to collective bargaining agreements – are mandatory, even in the context of discrimination claims filed by the employee under Act No. 100-1959. In Tucker v. Money Group, supra, Tucker filed a lawsuit against Money Group in court alleging unjust dismissal, gender discrimination and retaliation, despite having executed an employment contract that contained the following arbitration clause: “All Disputes relating to this Agreement and the relationship of the parties hereto shall be settled and finally determined by arbitration in San Juan, Puerto Rico…”

The Supreme Court reasoned that, to determine whether the arbitration clause was enforceable, it was first necessary to determine if it was agreed upon pursuant to the provisions of the Federal Arbitration Act (“FAA”) by analyzing: (i) whether the arbitration clause in the employment contract was valid, and (ii) if interstate commerce falling under the jurisdiction of the FAA was at play. As to the first element, the Supreme Court held that there was no controversy over the validity of the arbitration clause. As to the second element, the Supreme Court held that the FAA applied to the arbitration clause insofar as Money Group provided services to various states of the US and Tucker was responsible for contributing to the development of Money Group by engaging with consumers in various jurisdictions of the US. Having concluded that the FAA applied to the arbitration clause executed by Tucker and Money Gram, the Supreme Court relied on a case of the US Supreme Court where an employee subject to a private employment contract with an arbitration clause tried to bypass arbitration by filing an age discrimination in court pursuant to the Age Discrimination in Employment Act (“ADEA”). It is noteworthy to mention that in relying on federal legislation and case law to support its holding that arbitration clauses in valid private employment contracts are mandatory and in observing that Act No. 100-1959 shall be interpreted in a manner consistent with ADEA, the Supreme Court referenced Article 2.13 of Act No. 4-2017 which provides that “[a]ny law or regulation of Puerto Rico that regulates employer-employee relationships and that refers to an issue that is similar to an issue regulated by an act of the United States Congress, or regulations issued thereunder, shall be interpreted consistently with said federal regulations, unless the Puerto Rico law expressly requires a different interpretation.” 29 L.P.R.A. §1221.

If you have any questions or comments regarding these recent developments that impact the employment landscape or if you’d like assistance to revise or modify your practices and policies to ensure compliance with local legislation, please contact any of the following attorneys from our Labor & Employment Practice Group at your convenience:

Juan J. Casillas Ayala	787-523-3439	jcasillas@cstlawpr.com
Luis F. Llach Zúñiga	787-523-3496	lllach@cstlawpr.com
Israel Fernández Rodríguez	787-523-3437	ifernandez@cstlawpr.com
Luis R. Ramos Cartagena	787-523-3483	lramos@cstlawpr.com
Juan C. Nieves González	787-523-3478	jnieves@cstlawpr.com
Natalia E. del Nido Rodríguez	787-523-3481	ndelnido@cstlawpr.com
Cristina B. Fernández Niggemann	787-523-6076	cfernandez@cstlawpr.com