A New Day Dawning or Dark Clouds on the Horizon? the Potential Impact of the Pyett Case

Article excerpt

More than three decades after the Supreme Court's decision in Alexander v. GardnerDenver1 erected a solid barrier between labor arbitration and the litigation of individual statutory discrimination claims by unionized workers, the justices will consider a case that effectively asks them to tear down that wall. The pending case, 14 Penn Plaza LLC v. Pyett,2 has important implications in the field of labor and employment law, and for those who practice in the area.

I .The Pyett Case

In Summer 2003, three night security employees in a large New York City office building found themselves in new positions after the owner, the Pennsylvania Building Company, retained a new security subcontractor for some of the duties previously handled by the incumbent contractor. The new company, a non-union entity, was affiliated with the incumbent contractor, a unionized business. As part of the new arrangement, the employer reassigned the employees to different non-security positions as night porters and light duty cleaners. The workers, all over 50 years old and with decades of seniority, found that their new jobs were more physically demanding and less financially rewarding. They were not pleased, and looked to the union to address their grievances.

The three employees affected by the change were subject to a multi-employer collective bargaining agreement (CBA) negotiated by Local 32BJ of the Service Employees International Union (SEIU) with the real estate industry in New York City. The union is the longtime representative of building service workers - custodians, doormen, watchmen, and others - along the east coast.

Following the employee protest, a grievance was filed under the CBA. The grievance alleged that the CBA was violated by an improper transfer and reassignment arising from the new subcontract, and, subsequently, by the company's denial of a handyman assignment, resulting in a loss of pay and overtime. The grievance alleged as well that the workers were the victims of age discrimination.

Soon after the CBA arbitration began in February 2004, and be- fore it ended a year later, the union had second thoughts about the scope of its case. According to the plaintiffs, the union advised them that their transfer and discrimination claims would not be advanced by the union in the CBA arbitration because the union had approved the new arrangement. Instead, only the handyman assignment and overtime issues would be pursued by the union. The workers were informed that their other claims could be presented individually before the CBA arbitrator, by their private counsel, and they (the workers) would pay arbitration fees separate from those incurred by the union and management. The employees rejected the offer and moved forward with administrative filings and litigation in September 2004, alleging age discrimination under federal, state, and city law. Eventually, the labor arbitrator rejected the CBA issues pressed by the union regarding the handyman assignment and overtime.

Facing litigation after its success in arbitration, the company moved to dismiss the litigation or, alternatively, to compel arbitration. In moving to compel, the company contended that the CBA's arbitration provision provided the exclusive means to redress the individual discrimination claims presented by the workers, and that the employer had provided substantial monetary benefits for the unionized workforce in the negotiations leading to the provision. The relevant portion of the CBA states:

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 characteristic protected by law, including, but not limited to, claims made pursuant to Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimina- tion in Employment Act, the New York State Human Rights Law, the New York City Human Rights Code, New Jersey Law Against Discrimination, New Jersey Conscientious Employee Protection Act, Connecticut Fair Employer practices Act, or any other similar laws, rules or regulations. …