Labor & Employment Law

CBA arbitration clause can waive individual right to litigate statutory civil rights claim

The US Supreme Court held today (5-4) that a provision in a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law.

14 Penn Plaza v. Pyett (US Supreme Court 04/01/2009)

The relevant collective bargaining agreement requires union members to submit all claims of employment discrimination to binding arbitration under the CBA?s grievance and dispute resolution procedures.

A number of employees asked the union to file grievances alleging, among other things, that the employers violated the CBA?s ban on workplace discrimination by reassigning them on the basis of their age in violation of Age Discrimination in Employment Act of 1967 (ADEA). The union requested arbitration under the CBA, but later withdrew the age-discrimination claims.

The employees then filed suit claiming a violation of the ADEA; the district court denied the employers' motion to compel arbitration; the 2nd Circuit affirmed.

The US Supreme Court reversed, holding that a provision in a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law.

The Court found that employment-related discrimination claims are "conditions of employment" under the National Labor Relations Act and thus subject to mandatory bargaining. The CBA's arbitration provision must be honored unless the ADEA itself removes this class of grievances from the NLRA's broad sweep. The Court has already held (Gilmer v. Interstate/Johnson Lane (1991)) that the ADEA does not preclude arbitration of ADEA claims.

The Court rejected the argument that Alexander v. Gardner-Denver (1974) held that a CBA arbitration clause cannot waive an individual employee's right to litigate.

The DISSENT relied on Alexander v. Gardner-Denver, saying that that case held that rights conferred by Title VII cannot be waived as part of the collective bargaining process. This applies equally to the ADEA, and includes the right to a judicial forum.

But wait, there's more: The employees argued that the CBA allows the union to block arbitration of these claims altogether, thus operating as an unlawful substantive waiver of federal civil rights claims. The employers countered by arguing that the union has allowed employees to continue with the arbitration even though the union declined to participate. The Court specifically avoided reaching this issue because it was not fully briefed and was not fairly within the question presented to the Court. This clearly leaves a lot to be decided.

It could be that if the union retains total control over the arbitration process (which is normal in most cases), and if the union declines to arbitrate the individuals' statutory claims, then the employees would be able to proceed in litigation.

Full post as published by Arbitration Blog on April 02, 2009 (boomark / email).