Judge Orders Fannie Mae Discrimination Case to Arbitration

A federal judge has ordered 44 former Fannie Mae employees to arbitration, dismissing their lawsuit that alleged discriminatory firing practices tied to the company's charitable giving program. Judge Randolph D. Moss of the U.S. District Court for the District of Columbia issued a memorandum opinion on Friday, stating that the plaintiffs failed to provide sufficient evidence to dispute their agreement to arbitrate "any employment-related disputes." The case originated from a virtual meeting on April 3, 2025, during which over 80 Fannie Mae employees were informed of their termination for cause. The plaintiffs, who are predominantly of Indian national origin, mostly Telugu speakers, and over the age of 50, contend that this mass termination was discriminatory and not based on fraud related to the Fannie Mae Charitable Giving program as alleged by the company. They filed their lawsuit in August 2025, citing violations of Title VII of the Civil Rights Act and the Age Discrimination in Employment Act, alongside breach-of-contract claims. The initial complaint included 66 plaintiffs, but 22 later withdrew their claims. Court filings also indicate that related cases against Bill Pulte, director of the Federal Housing Finance Agency (FHFA), and former Fannie Mae CEO Priscilla Almodovar have been closed. Fannie Mae sought to dismiss the complaint and compel arbitration, invoking the Federal Arbitration Act. The government-sponsored enterprise argued that each plaintiff was bound by a 2015 update to the company's arbitration agreement. To support its motion, Fannie Mae presented sworn declarations and electronic records demonstrating that on January 21, 2015, all employees received an email about the updated agreement, which became effective in April of that year. The company provided records showing employees were directed to an internal portal to acknowledge receipt and understanding that continued employment signified agreement to the terms. Further records from Fannie Mae indicated that eight of the plaintiffs had subsequently signed internal documents related to their employment, which the company asserted included acknowledgment of the arbitration agreement. The court's decision hinges on the enforceability of this arbitration agreement, which Fannie Mae maintains was properly communicated and agreed upon by its employees, thereby superseding their right to pursue their discrimination claims in federal court.