Taking a look at the United Supreme Court for a moment, oral argument for 14 Penn Plaza LLC v. Pyett is set for December 1, 2008. This case presents the question: Is an arbitration clause in a collective bargaining agreement enforceable, thereby waiving an employee’s right to file statutory discrimination claims?
This should be a heavily fought case as the Supreme Court basically punted on this issue in its previous opinion of Wright v. Universal Maritime Service Corp. (1998) 525 U.S. 70. There the Court stated that it would not reach the question of whether a waiver in a collective bargaining agreement was enforceable, even if such waiver was clear and unmistakable.
This case presents an interesting fact pattern. The plaintiffs were employed as night watchmen and members of Local 32BJ, which had a Collective Bargaining Agreement (“CBA”) containing an arbitration provision. In 2003, the plaintiffs were transferred to less desirable positions and different locations. At that time, the plaintiffs were the only employees over the age of 50. They filed a grievance with the Union alleging age discrimination and denial of overtime. The Union brought these claims before an arbitrator on the plaintiffs’ behalf. But, before the arbitration began, the Union informed the plaintiffs it refused to pursue the plaintiffs’ age discrimination claims because the Union played a part in having the plaintiffs replaced and transferred. Instead the Union only pursued the plaintiffs’ claims regarding the denial of overtime. The plaintiffs filed a claim with the EEOC, receiving a right to sue letter. Once the plaintiffs’ filed their suit in federal court, the defendants moved to compel arbitration under the CBA. The District Court denied Defendants’ motion. The Second Circuit Court affirmed the District Court’s denying the motion to compel arbitration, finding that under Second Circuit precedent arbitration provisions contained in CBAs are unenforceable. The court reasoned that the Supreme Court had yet to address this issue, so the Second Circuit precedent was binding. A copy of the Second Circuit’s opinion is available here.
The Supreme Court will have to balance competing interests and case law in this case. On one hand, the Supreme Court has been supportive of arbitration agreements and has clearly stated that individuals who agree to waive the right to a federal forum can be compelled to arbitrate. (Glimer v. v. Interstate/Johnson Lane Corp. (1991) 500 U.S. 20.) On the other hand, this is not an individual agreement, but instead a collective bargaining agreement made between the Union and the defendants. In such a situation the individual plaintiffs were not actually part of the negotiation or agreement. As seen in this case, such a CBA can raise several problems. Here, the Union actually refused to pursue the claims the plaintiffs’ wanted to bring, instead indicating that the plaintiffs could pursue these claims personally, at their own expense. If the Union can choose not to bring claims on its members’ behalf because of its own involvement in personnel decisions the agreement to arbitrate would not appear to involve individual employees. It will be interesting to see how the Court handles these issues.
The defendants’ brief on the merits can be found here and the plaintiffs’ opposition on the merits can be found here. There is also additional information, including various Amicus briefs, about this case available at ScotusWiki.
--Michael Sachs
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