In an opinion handed down on April 1, 2009, the Supreme Court addressed whether collective bargaining-agreement provisions requiring arbitration of Age Discrimination in Employment Act (ADEA) claims are enforceable. In 14 Penn Plaza LLC, et al. v. Pyett et al., the plaintiffs were subject to a collective bargaining agreement that required them to submit all claims of employment discrimination to binding arbitration. After the union filed a grievance on the plaintiffs' behalf, but then voluntarily withdrew the plaintiffs' ADEA claim, plaintiffs filed a charge with the Equal Employment Opportunity Commission and then filed suit in federal court. The defendants then filed a motion to require that the plaintiffs arbitrate their ADEA claim.

ADEA Claims May Be Resolved by Mandatory Arbitration

The lower courts held that the arbitration provision was unenforceable as a matter of law and allowed plaintiffs to proceed with their case in federal court. The Supreme Court reversed, holding that "a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable . . ."

In reaching its decision, the Court noted that its holding is consistent with prior Supreme Court cases because the earlier cases bar arbitration of statutory claims only when those claims are not explicitly subject to the mandatory arbitration agreement. Accordingly, the Court's earlier cases did not involve the issue of enforceability of explicit provisions to arbitrate statutory claims.

The Take Away

The Court's ruling could potentially impact unionized employers with "non-discrimination" provisions in their collective bargaining agreements. Based upon the Court's 14 Penn Plaza holding, unionized employers should carefully review any "non-discrimination" provisions in their collective bargaining agreements to determine whether they mandate the arbitration of statutory claims (like claims of discrimination or harassment). If they do, and if an employee covered by the collective bargaining agreement attempts to bring an administrative charge or federal or state lawsuit that is covered by the contract's non-discrimination provision, 14 Penn Plaza mandates that such claims be arbitrated. Similarly, in future union contract negotiations, if employers would like statutory claims to be arbitrated rather than be subject to the administrative/judicial dispute resolution process, employers should consider proposing bargaining language that clearly provides that statutory claims must be arbitrated under the contract's grievance and arbitration procedures.

Notably, although many collective bargaining agreements contain non-discrimination clauses, and most contain grievance and arbitration procedures, collective bargaining agreements typically separate these two clauses (i.e., the grievance and arbitration provision and the non-discrimination provision are in separate locations of the contract). Under the Supreme Court's holding in 14 Penn Plaza, whether the grievance and arbitration clause serves to require the arbitration of statutory claims will depend upon the language used in the grievance and arbitration provision. If the grievance and arbitration provision references only disputes over the interpretation of the contract or whether an employee was discharged for "just cause," 14 Penn Plaza and prior Supreme Court precedent holds that the aggrieved employee would not be required to arbitrate the statutory claim. However, if the grievance and arbitration provision provides that statutory claims are included in the grievance and arbitration process, 14 Penn Plaza requires that such claims be arbitrated.