07-12-09
The Supreme Court Speaks: Age Discrimination Claims Go to Arbitration
Supreme Court Decision:
14 Penn Plaza LLC V. Pyett and Mandatory Arbitration
The Supreme Court of the United States, in 14 Penn Plaza LLC v. Pyett, 129 S. Ct. 1456 (2009), recently held that a provision in a collective bargaining agreement that clearly requires employees to submit their Age Discrimination in Employment Act of 1967 (“ADEA”) claims to arbitration is enforceable.
In the closely divided 5-4 decision, the Supreme Court found that, pursuant to the National Labor Relations Act (“NLRA”), unions act as exclusive bargaining representatives with broad authority to negotiate conditions of employment, and freedom of contract, a fundamental policy of the NLRA. Accordingly, it must uphold the union’s negotiated bargain to submit ADEA claims to arbitration in exchange for employer concessions, unless the ADEA precludes arbitration of such claims. Because the text and legislative history of the ADEA do not indicate Congressional intent to exclude such claims from arbitration, a union negotiated agreement to arbitrate is enforceable.
The decision extends the Supreme Court’s determination in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) that individuals may explicitly waive their right to a judicial remedy pursuant to the ADEA to such waivers negotiated by unions. The only requirement in both cases is that the agreement to arbitrate statutory antidiscrimination claims must be clearly stated in the agreement.
The Supreme Court also resolved the apparent conflict between Gilmer and its decision in Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974). A broad reading of Gardner-Denver (and the one advocated by the dissent in 14 Penn Plaza) is that there is a broad prohibition against union waiver of an employee’s right to a judicial forum for statutory claims.
However, the Supreme Court narrowly read Gardner-Denver to hold merely that a union’s waiver of statutory anti-discrimination claims must be explicit. In contrast to 14 Penn Plaza, the agreement at issue in Gardner-Denver also provided for contractual guarantees against antidiscrimination in the collective bargaining agreement. The Supreme Court in Gardner-Denver found that the union could not waive the employee’s right to a judicial remedy for a claim pursuant to Title VII of the Civil Rights Acts of 1964 because such waiver was not explicitly stated. Rather, the arbitration provision at issue applied only to the contractual claims. The majority also found that certain of the Supreme Court’s statements in Gardner-Denver, which appear to support the dissent’s broader interpretation of the decision, were merely dicta that reflected a negative view of arbitration that has since been abandoned.
Accordingly, a provision in a collective bargaining agreement that clearly requires employees to submit their ADEA claims to arbitration is enforceable. It also appears that the Supreme Court would enforce a provision in a collective bargaining agreement that clearly requires employees to submit other statutory antidiscrimination claims to arbitration unless the statute at issue precludes such an agreement.
For more information, click on the legal topic:arbitration & mediation.
14 Penn Plaza LLC V. Pyett and Mandatory Arbitration
The Supreme Court of the United States, in 14 Penn Plaza LLC v. Pyett, 129 S. Ct. 1456 (2009), recently held that a provision in a collective bargaining agreement that clearly requires employees to submit their Age Discrimination in Employment Act of 1967 (“ADEA”) claims to arbitration is enforceable.
In the closely divided 5-4 decision, the Supreme Court found that, pursuant to the National Labor Relations Act (“NLRA”), unions act as exclusive bargaining representatives with broad authority to negotiate conditions of employment, and freedom of contract, a fundamental policy of the NLRA. Accordingly, it must uphold the union’s negotiated bargain to submit ADEA claims to arbitration in exchange for employer concessions, unless the ADEA precludes arbitration of such claims. Because the text and legislative history of the ADEA do not indicate Congressional intent to exclude such claims from arbitration, a union negotiated agreement to arbitrate is enforceable.
The decision extends the Supreme Court’s determination in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) that individuals may explicitly waive their right to a judicial remedy pursuant to the ADEA to such waivers negotiated by unions. The only requirement in both cases is that the agreement to arbitrate statutory antidiscrimination claims must be clearly stated in the agreement.
The Supreme Court also resolved the apparent conflict between Gilmer and its decision in Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974). A broad reading of Gardner-Denver (and the one advocated by the dissent in 14 Penn Plaza) is that there is a broad prohibition against union waiver of an employee’s right to a judicial forum for statutory claims.
However, the Supreme Court narrowly read Gardner-Denver to hold merely that a union’s waiver of statutory anti-discrimination claims must be explicit. In contrast to 14 Penn Plaza, the agreement at issue in Gardner-Denver also provided for contractual guarantees against antidiscrimination in the collective bargaining agreement. The Supreme Court in Gardner-Denver found that the union could not waive the employee’s right to a judicial remedy for a claim pursuant to Title VII of the Civil Rights Acts of 1964 because such waiver was not explicitly stated. Rather, the arbitration provision at issue applied only to the contractual claims. The majority also found that certain of the Supreme Court’s statements in Gardner-Denver, which appear to support the dissent’s broader interpretation of the decision, were merely dicta that reflected a negative view of arbitration that has since been abandoned.
Accordingly, a provision in a collective bargaining agreement that clearly requires employees to submit their ADEA claims to arbitration is enforceable. It also appears that the Supreme Court would enforce a provision in a collective bargaining agreement that clearly requires employees to submit other statutory antidiscrimination claims to arbitration unless the statute at issue precludes such an agreement.
For more information, click on the legal topic:arbitration & mediation.
