Puerto Rico Supreme Court Enforces Private Employment Arbitration Clauses Under Act 100 Discrimination Claims

Why It Matters

The ruling expands arbitration’s scope, accelerating dispute resolution and limiting court involvement in private employment discrimination cases, which reshapes employer risk management and employee claim strategies.

Key Takeaways

• Arbitration clauses enforceable for private Act 100 claims
• FAA applies when contract affects interstate commerce
• Unionized workers excluded; collective agreements unchanged
• Court limits ruling to individual private contracts
• Ruling streamlines dispute resolution, reduces litigation

Pulse Analysis

The Puerto Rico Supreme Court’s decision marks a pivotal shift in how private employment discrimination claims are handled under Act 100. By anchoring the enforceability of arbitration clauses to the Federal Arbitration Act, the Court aligns Puerto Rico’s approach with broader U.S. jurisprudence that favors contractual arbitration when interstate commerce is implicated. This alignment not only provides employers with greater predictability but also signals to litigants that contractual obligations will be honored, even when statutory rights are at stake.

For businesses operating in Puerto Rico, the ruling underscores the importance of drafting clear arbitration provisions and assessing their impact on interstate commerce. Companies must now ensure that employment agreements contain enforceable arbitration language to mitigate the risk of protracted court battles. Conversely, employees should be aware that opting into such contracts may limit their ability to pursue discrimination claims in court, shifting the forum to private arbitration panels where procedural rules differ and discovery may be more constrained.

The decision’s narrow focus on private, individual contracts leaves collective bargaining agreements untouched, preserving the status quo for unionized workforces. This distinction maintains a balance between contractual freedom and collective labor rights, preventing a blanket application that could undermine negotiated dispute‑resolution mechanisms. Overall, the ruling promotes procedural efficiency, reduces docket congestion, and reinforces the primacy of contract law in private employment contexts, a trend likely to influence future legislative and judicial considerations across U.S. territories.

Puerto Rico Supreme Court Enforces Private Employment Arbitration Clauses under Act 100 Discrimination Claims

Kendall Hope Tucker v. Money Group, 2026 TSPR 9, 217 DPR ___ (2026)

In Kendall Hope Tucker v. Money Group, 2026 TSPR 9, 217 DPR ___ (2026), the Supreme Court of Puerto Rico addressed the enforceability of an arbitration clause contained in a private employment contract in the context of a discrimination claim filed under Act No. 100 of June 30, 1959 (“Act 100”).¹ The case arose when an employee, after executing an employment agreement that included a mandatory arbitration provision, filed a judicial action alleging employment discrimination pursuant to Act 100. The employer moved to compel arbitration based on the contractual clause, which the employee challenged on public policy grounds, arguing that Act 100 claims were not subject to arbitration.

The Supreme Court held that Act 100 discrimination claims are subject to mandatory arbitration when a valid arbitration clause exists in a private employment agreement and the contract affects interstate commerce, thus triggering the Federal Arbitration Act (FAA). Notably, the Court expressly limited this holding to private, individual employment agreements, clarifying that it does not apply to unionized employees covered by collective bargaining agreements with optional arbitration clauses, whose Act 100 claims remain governed by previous precedent of the Supreme Court of Puerto Rico, Quiñones v. Asociación, 161 DPR 668 (2004).

The decision affirms the validity of arbitration clauses in private employment contracts covering Act 100 claims, limits forum‑shopping and preliminary litigation over jurisdiction, and provides guidance to adjudicative bodies and agencies to honor arbitration agreements when statutory rights are preserved, thereby promoting procedural efficiency and contractual certainty.