United States Supreme Court Employment Law Cases
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14 Penn Plaza LLC v. Pyett
(07-581)
A provision in a collective-bargaining agreement that clearly and
unmistakably requires union members to arbitrate ADEA claims is enforceable as a
matter of federal law
Decided April 1, 2009
[Full text of
opinion]
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Syllabus:
Respondents are members of the Service Employees International Union, Local
32BJ (Union). Under the National Labor Relations Act, the Union is the exclusive
bargaining representative of employees within the building-services industry in
New York City, which includes building cleaners, porters, and doorpersons. The
Union has exclusive authority to bargain on behalf of its members over their
“rates of pay, wages, hours of employment, or other conditions of
employment,” 29 U. S. C. §159(a), and engages in industry-wide
collective bargaining with the Realty Advisory Board on Labor Relations, Inc. (RAB),
a multiemployer bargaining association for the New York City real-estate
industry. The agreement between the Union and the RAB is embodied in their
Collective Bargaining Agreement for Contractors and Building Owners (CBA). The
CBA requires union members to submit all claims of employment discrimination to
binding arbitration under the CBA’s grievance and dispute resolution
procedures.
Petitioner
14 Penn Plaza LLC is a member of the RAB. It owns and operates the New York City
office building where respondents worked as night lobby watchmen and in other
similar capacities. Respondents were directly employed by petitioner Temco
Service Industries, Inc. (Temco), a maintenance service and cleaning contractor.
After 14 Penn Plaza, with the Union’s consent, engaged a unionized security
contractor affiliated with Temco to provide licensed security guards for the
building, Temco reassigned respondents to jobs as porters and cleaners.
Contending that these reassignments led to a loss in income, other damages, and
were otherwise less desirable than their former positions, respondents asked the
Union to file grievances alleging, among other things, that petitioners violated
the CBA’s ban on workplace discrimination by reassigning respondents on the
basis of their age in violation of Age Discrimination in Employment Act of 1967
(ADEA), 29 U. S. C. §621 et seq. The Union requested
arbitration under the CBA, but after the initial hearing, withdrew the
age-discrimination claims on the ground that its consent to the new security
contract precluded it from objecting to respondents’ reassignments as
discriminatory. Respondents then filed a complaint with the Equal Employment
Opportunity Commission (EEOC) alleging that petitioners had violated their ADEA
rights, and the EEOC issued each of them a right-to-sue notice. In the ensuing
lawsuit, the District Court denied petitioners’ motion to compel arbitration
of respondents’ age discrimination claims. The Second Circuit affirmed,
holding that Alexander v. Gardner-Denver Co., 415 U. S. 36 ,
forbids enforcement of collective-bargaining provisions requiring arbitration of
ADEA claims. Held: A provision in a collective-bargaining
agreement that clearly and unmistakably requires union members to arbitrate ADEA
claims is enforceable as a matter of federal law. (a) Examination of the two
federal statutes at issue here, the ADEA and the National Labor Relations Act
(NLRA), yields a straightforward answer to the question presented. The Union and
the RAB, negotiating on behalf of 14 Penn Plaza, collectively bargained in good
faith and agreed that employment-related discrimination claims, including ADEA
claims, would be resolved in arbitration. This freely negotiated contractual
term easily qualifies as a “conditio[n] of employment” subject to mandatory
bargaining under the NLRA, 29 U. S. C. §159(a). See, e.g., Litton
Financial Printing Div., Litton Business Systems, Inc. v. NLRB, 501
U. S. 190 . As in any contractual negotiation, a union may agree to the
inclusion of an arbitration provision in a collective-bargaining agreement in
return for other concessions from the employer, and courts generally may not
interfere in this bargained-for exchange. See NLRB v. Magnavox Co.,
415 U. S. 322 . Thus, the CBA’s arbitration provision must be honored
unless the ADEA itself removes this particular class of grievances from the
NLRA’s broad sweep. See Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U. S. 614 . It does not. This Court has
squarely held that the ADEA does not preclude arbitration of claims brought
under the statute. See Gilmer v. Interstate/Johnson Lane Corp.,
500 U. S. 20 . Pp. 6–10. Accordingly, there is no legal basis for
the Court to strike down the arbitration clause in this CBA, which was freely
negotiated by the Union and the RAB, and which clearly and unmistakably requires
respondents to arbitrate the age-discrimination claims at issue in this appeal.
Pp. 6–10. (b) The CBA’s arbitration
provision is also fully enforceable under the Gardner-Denver line of
cases. Respondents incorrectly interpret Gardner-Denver and its progeny
as holding that an agreement to arbitrate ADEA claims provided for in a
collective-bargaining agreement cannot waive an individual employee’s right to
a judicial forum under federal antidiscrimination statutes. (i) The
facts underlying Gardner-Denver and its progeny reveal the narrow scope
of the legal rule they engendered. Those cases “did not involve the issue of
the enforceability of an agreement to arbitrate statutory claims,” but “the
quite different issue whether arbitration of contract-based claims precluded
subsequent judicial resolution of statutory claims.” Gilmer, supra, at
35. Gardner-Denver does not control the outcome where, as here, the
collective-bargaining agreement’s arbitration provision expressly covers both
statutory and contractual discrimination claims. (ii) Apart
from their narrow holdings, the Gardner-Denver line of cases included
broad dicta highly critical of using arbitration to vindicate statutory
antidiscrimination rights. That skepticism, however, rested on a misconceived
view of arbitration that this Court has since abandoned. First, contrary to Gardner-Denver’s
erroneous assumption, 415 U. S., at 51, the decision to resolve ADEA claims
by way of arbitration instead of litigation does not waive the statutory right
to be free from workplace age discrimination; it waives only the right to seek
relief from a court in the first instance, see, e.g., Gilmer, supra,
at 26. Second, Gardner-Denver’s mistaken suggestion that certain
informal features of arbitration made it a forum “well suited to the
resolution of contractual disputes,” but “a comparatively inappropriate
forum for the final resolution of [employment] rights.” 415 U. S., at 56,
has been corrected. See, e.g., Shearson/American Express Inc. v. McMahon,
482 U. S. 220 . Third, Gardner-Denver’s concern that, in
arbitration, a union may subordinate an individual employee’s interests to the
collective interests of all employees in the bargaining unit, 415 U. S., at
58, n. 19, cannot be relied on to introduce a qualification into the ADEA
that is not found in its text. Until Congress amends the ADEA to meet the
conflict-of-interest concern identified in the Gardner-Denver dicta,
there is “no reason to color the lens through which the arbitration clause is
read.” Mitsubishi, supra, at 628. In any event, the
conflict-of-interest argument amounts to an unsustainable collateral attack on
the NLRA, see Emporium Capwell Co. v. Western Addition Community
Organization, 420 U. S. 50 , and Congress has accounted for the
conflict in several ways: union members may bring a duty of fair representation
claim against the union; a union can be subjected to direct liability under the
ADEA if it discriminates on the basis of age; and union members may also file
age-discrimination claims with the EEOC and the National Labor Relations
Board. (c) Because respondents’
arguments that the CBA does not clearly and unmistakably require them to
arbitrate their ADEA claims were not raised in the lower courts, they have been
forfeited. Moreover, although a substantive waiver of federally protected civil
rights will not be upheld, see, e.g., Mitsubishi, supra, at 637,
and n. 19, this Court is not positioned to resolve in the first instance
respondents’ claim that the CBA allows the Union to prevent them from
effectively vindicating their federal statutory rights in the arbitral forum,
given that this question would require resolution of contested factual
allegations, was not fully briefed here or below, and is not fairly encompassed
within the question presented. Resolution now would be particularly
inappropriate in light of the Court’s hesitation to invalidate arbitration
agreements based on speculation. See, e.g., Green Tree Financial
Corp.-Ala. v. Randolph, 531 U. S. 79 .Pp. 23–25. 498 F. 3d 88, reversed and remanded. Thomas, J.,
delivered the opinion of the Court, in which Roberts, C. J.,
and Scalia, Kennedy, and Alito,
JJ., joined. Stevens, J., filed a
dissenting opinion. Souter, J., filed a
dissenting opinion, in which Stevens, Ginsburg,
and Breyer, JJ., joined.
Case below: Pyett v.
Pennsylvania Building Company (2nd Cir 08/01/2007)
Question presented: Is an arbitration clause contained in a collective bargaining
agreement, freely negotiated by a union and an employer, which clearly and
unmistakably waives the union members’ right to a judicial forum for their
statutory discrimination claims, enforceable?
Certiorari Documents:
Briefs on the merits:
Additional analysis: Counsel:
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