The Supreme Court's 14 Penn Plaza, Llc V. Pyett Decision: Impact and Fairness Considerations for Collective Bargaining

By Twomey, David P. | Labor Law Journal, Summer 2010 | Go to article overview

The Supreme Court's 14 Penn Plaza, Llc V. Pyett Decision: Impact and Fairness Considerations for Collective Bargaining


Twomey, David P., Labor Law Journal


I. Introduction

Labor arbitration is an alternative dispute resolution process created by the parties to a collective bargaining agreement. In the private sector, an arbitration is generally confined to a question of whether or not a particular action was valid under the CBA. And the powers and duties of an arbitrator are as set forth and limited by the terms of the CBA.1 Some fifty years ago, as part of its Steelworkers Trilogy,2 the United States Supreme Court announced a strong presumption in favor of arbitr ability in the United Steelworkers v. Warrior & Gulf Navigation Co., as follows:

To be consistent with the congressional policy in favor of settlement of disputes by the parties through the machinery of arbitration... [a] ? order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible to an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.3

In the United Steelworkers v. Enterprise Wheel & Car Co. component of the Trilogy, the Supreme Court approved the role of arbitrators as the interpreters of the contract in the following language:

The question of interpretation of the collective bargaining agreement is a question for the arbitrator. It is the arbitrator's construction which was bargained for; and so far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his.4

Over the years the Supreme Court expanded the use of arbitration in employment disputes beyond arbitration under collective bargaining agreements to approval of the use of arbitration to resolve individual employment agreements to arbitrate statutory rights.5 The Supreme Court in 14 Penn Phza, LLC v. Pyett recently decided that a provision in a collective bargaining agreement that "clearly and unmistakably" requires union members to arbitrate claims arising under a federal antidiscrimination statute is enforceable and is a waiver of union members' rights to pursue statutory discrimination claims in federal courts.6 The decision was a significant departure from existing precedents going back to the Court's 1974 Alexander v. Gardner-Denver Co. decision that allowed a union member to pursue a grievance-arbitration remedy under a CBA, and after an adverse arbitration award, to pursue statutory rights in a federal court under the Title VII of the Civil Rights Act of 1964.7 Where once labor arbitrators were focused on the four corners of a collective bargaining agreement, interpreting contractual disputes involving wages, hours and working conditions, labor arbitrators will now, in some cases, interpret federal antidiscrimination statutes and case law, and resolve procedural and substantive due process issues inherent in the application of federal statutory law.

This paper presents the developing and sometimes conflicting Supreme Court precedents involving the waiver of employee statutory rights through mandatory arbitration clauses. It then presents the Supreme Court's Pyett decision. Pyett's impact on the labor arbitration process is considered along with procedural and fairness issues parties may choose to address in their contract negotiations on whether or not to require bargaining unit members to arbitrate their statutory discrimination claims. The paper concludes with an assessment of the workability of resolving statutory discrimination claims through arbitration, rather than Article III courts.

II. Pre-Pyett Precedent On Mandatory Arbitration

Four Supreme Court decisions laid the foundation and expressed sufficient conflict to persuade the Supreme Court to grant certiorari in 14 Penn Pfozfl v. Pyett to settle issues underlying the distinctions between individual employment agreements to arbitrate and arbitration clauses found in CB As. …

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