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"Reverse" discrimination violates public policy
July 18, 2005 by Ross Runkel at LawMemo

Arbitration awards will not be enforced if they violate public policy. "Clear" public policy, that is. And it's not always clear whether the public policy is clear, and that split the 8th Circuit 2 to 1.

Federal law does not prohibit employers from preferring older workers over younger ones. State law can, and Minnesota law does prohibit older worker preferences.

A collective bargaining agreement required 1 out of every 5 electrical workers in a unionized shop to be 50 years of age or over. The employer let go two over-50 employees as part of a reduction in force. The union filed a grievance, which went to arbitration.

The arbitration panel ruled that the employer violated the agreement by not maintaining the 1-to-5 ratio, and awarded lost wages to the two employees.

The 8th Circuit held (2-1) that the arbitration award could not be enforced because it violated public policy - a rare outcome. The public policy was found in the Minnesota Human Rights Act. That statute, says the court, "prohibits using a person's age as a basis for a decision if the person is over the age of majority." Ace Electrical Contractors v. IBEW (8th Cir 07/14/2005).

The dissent would have upheld the arbitration award under the usual highly deferential rules for reviewing such awards, noting that "the law of Minnesota simply does not provide the clarity necessary to invoke the public policy exception.

My view:

• A reminder that federal and state law can be quite different on important questions of employment discrimination law.
• This case is an unusual example of a court refusing to uphold an arbitration award, on the ground that the award violated public policy.

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