On
April 1, 2009, the United States Supreme Court handed a rare victory to
unionized employers seeking to compel arbitration of job bias claims
under existing labor agreements. In the case of 14 Penn Plaza LLC v. Pyett,
the High Court enforced a clause in a collective bargaining
agreement which explicitly required union members covered by the
agreement to arbitrate any claims they may have under the federal age
bias laws. This ruling is a major departure from the way the court has
looked at this issue for the past thirty-five years.
Like so many union contracts, the contract in the 14 Penn Plaza
case explicitly prohibited discrimination under the federal job bias
statutes. In addition to that broad prohibition, the contract also
explicitly stated that job bias claims would be subject to the
contract's grievance and arbitration procedures" as the sole and
exclusive remedy." The employer, 14 Penn Plaza LLC, owns and
operates a New York City office building. The plaintiffs worked as
night lobby watchmen and in other similar jobs. The union filed
grievances on the plaintiffs' behalf, challenging job reassignments
that they claimed were undesirable. The grievances claimed the
violations were the result of illegal age discrimination in violation
of the union contract, as well as other provisions of the
contract. Before the actual arbitration, the union withdrew the
age bias claims. The arbitrator then ruled for the employer on the rest
of the plaintiffs' claims.
The grievants then filed suit in federal court to pursue their age
discrimination claims. The company sought to compel arbitration
of the plaintiffs' claims under the union contract's arbitration
clause. Two lower courts rejected the employer's claim. The
Supreme Court took the case and overturned those decisions by a narrow
5-4 vote.
The Court's decision in 14 Penn Plaza was a huge victory for employers because it dramatically limits the reach of a 1974 case, Alexander v. Gardner-Denver Co., which nullified provisions in union contracts requiring union members to arbitrate all statutory job bias claims.
In distinguishing the 1974 case from this one, the Court noted
that although the contract language in the earlier case broadly
prohibited discrimination, it did not explicitly require arbitration of statutory job bias claims. In contrast, the clause in the 14 Penn Plaza union contract did mandate arbitration of such matters.
The Supreme Court found this to be a pivotal
distinction. The Court ruled that a clause like this one which
explicitly mandates arbitration of statutory job bias claims must be
enforced.
The Court also dismissed the idea that a union cannot waive an
employee's right to pursue job bias claims in court. The Court
noted that while employees cannot be forced to forfeit any
"substantive" rights under job bias statutes - such as the right to be
free from discrimination, harassment or retaliation - this rule does
not apply with respect to where the case is
litigated. Thus, contract clauses that specify arbitration as the
exclusive remedy will be enforced where the language committing the
dispute to arbitration is written in "clear and unmistakable terms."
The Supreme Court's ruling is an important decision for
employers with union contracts that already require arbitration of job
bias claims. It also provides a road map for those that wish to
secure such rights in the future.
We would be pleased to assist your company in evaluating
existing language and negotiation strategy for obtaining this important
right in future negotiations.
