Supreme Court: Arbitration Provisions in Collective Bargaining Agreements Enforceable on Statutory Claims
Today the United States Supreme Court issued a decision of paramount importance to union employers, holding that arbitration clauses in collective bargaining agreements (CBAs) are enforceable as to statutory claims. Click here to read the decision in 14 Penn Plaza LLC v. Pyett.
In Penn Plaza, several union members asserted claims against their employer under the Age Discrimination in Employment Act, alleging that they were reassigned to different positions because of their age. The employer moved to dismiss their suits on the basis that the CBA required union members to submit any claims of employment discrimination to binding arbitration under the CBA’s grievance and dispute resolution procedures. Those motions were denied by the lower courts.
In a 5-4 decision, the Supreme Court reversed, holding that a CBA provision that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law. Because employment-related discrimination claims are "conditions of employment" under the National Labor Relations Act, they are subject to mandatory bargaining. The court also emphasized that arbitration is an adequate means to resolve statutory claims as well as alleged contract violations.
The Penn Plaza decision reverses a long line of court cases holding that union members cannot be required to arbitrate statutory claims. This is a great outcome for union employers, who can now require union employees to arbitrate statutory claims -- generally a more cost-effective and expedient method of resolution. If your CBA does not contain such a provision (or if the provision does not provide for arbitration as the exclusive means to resolve statutory claims), you might want to consider proposing such a provision in your next contract negotiations.