14 Penn Plaza LLC v. Pyett

2009-04-01

Headline: Arbitration clause in union contract upheld, forcing unionized workers to bring age-discrimination claims in arbitration when the contract clearly requires it.

Holding: A collective-bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable under federal law, so such claims must be sent to arbitration when the CBA so provides.

Real World Impact:

Allows unions and employers to require arbitration for ADEA claims when the CBA is clear.
Makes it harder for unionized employees to begin ADEA lawsuits in court.
Leaves factual disputes about union blocking arbitration to lower courts.

Topics: age discrimination, mandatory arbitration, collective bargaining, labor unions

Summary

Background

A group of building-service workers who served as night lobby watchmen were employed by a cleaning contractor at a downtown office building. Their union, Local 32BJ, and an industry bargaining association (RAB) negotiated a collective-bargaining agreement (CBA) that required arbitration for all discrimination claims. After the building hired a unionized security contractor and the workers were reassigned to porter and cleaner jobs, the union withdrew the workers’ age-discrimination grievances. The workers then filed EEOC charges, received right-to-sue notices, and sued in federal court asserting ADEA claims.

Reasoning

The central question was whether a CBA provision that clearly and unmistakably requires arbitration of ADEA claims must be enforced. The Court examined the labor statute that authorizes collective bargaining and the ADEA, and relied on prior arbitration cases. It held that the union and employers may agree to arbitration as a condition of employment and that nothing in the ADEA forbids arbitration of age-discrimination claims. The Court rejected a broad reading of older cases that had questioned arbitration in this context and reversed the court of appeals.

Real world impact

As a result, employers and unions can enforce CBA clauses that clearly require arbitration of federal age-discrimination claims. Unionized employees who are covered by such clear CBA language will generally be sent to arbitration first rather than beginning in federal court. The Court left unresolved factual questions about whether a particular CBA or union practice might prevent an employee from effectively vindicating rights in arbitration; those issues go back to the lower courts.

Dissents or concurrances

Two dissenting Justices argued that longstanding precedent forbids unions from bargaining away employees’ judicial forum rights and warned against overturning that line of cases; they emphasized concerns about unions subordinating individual statutory rights to collective decisions.