In a decision some are accusing the Republican majority of judicial activism, the United States Supreme Court, in a 5-4 decision, ruled that an arbitration clause in a union contract may prevent employees from suing companies in court claiming discrimination. In 14 Penn Plaza, LLC v. Pyett, Case No. 07-581, decided on April 1, 2009, a majority examined the following arbitration clause in the union contract:
“§30 NO DISCRIMINATION. There shall be no discrimination against any present or future employee by reason of race, creed, color, age, disability, national origin, sex, union membership, or any other characteristic protected by law….All such claims shall be subject to the grievance and arbitration procedures (Articles V and VI) as the sole and exclusive remedy for violations. Arbitrators shall apply appropriate law in rendering decisions based upon claims of discrimination.”
The employees of 14 Penn Plaza LLC wanted to sue for discrimination, but the company moved to compel arbitration. Both the federal district and appellate courts denied the motion to compel arbitration. The Supreme Court reversed, finding that the arbitration provision clearly and unmistakably required union members to arbitration claims enforceable as a matter of federal law.
Justice Thomas, joined by Justices Scalia, Alito, Roberts and Kennedy, stated that the answer was “straightforward,” pointing to a long line of cases approving arbitration as a way to resolve conflicts. He also noted that the discrimination statute did not remove grievances and arbitrations from the purview of federal labor law. Thus, discrimination claims negotiated by a union may waive individuals’ rights to a judicial remedy under federal anti-discrimination statutes. If an employee is concerned that a union subordinated his rights to the rights of the union, the employee may sue the union alleging a violation of the duty of fair representation or discrimination.
Justices Stevens and Souter filed dissenting opinions, to which Justices Ginsburg and Breyer joined. They cited an equally long list of cases they state prevent employees from waiving their statutory rights to pursue their discrimination claims in court. As Justice Stevens stated, he “would adhere to stare decisis,” and affirm the appellate court’s ruling denying the company’s motion to compel arbitration of the discrimination claims.
According to Alan M. Kaplan, who negotiates union contracts on behalf of the Firm’s clients, this decision shows the importance of including clear and unmistakable language that meets the company’s goals. By taking control of the drafting process, a company can attempt to obtain a contract so that it can operate efficiently, economically and productively.