AMERICAN BAR ASSOCIATION SECTION OF LABOR AND EMPLOYMENT LAW 3 rd ANNUAL CLE CONFERENCE NOVEMBER 5, 2009 WASHINGTON, D.C. Pyett v.
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1 AMERICAN BAR ASSOCIATION SECTION OF LABOR AND EMPLOYMENT LAW 3 rd ANNUAL CLE CONFERENCE NOVEMBER 5, 2009 WASHINGTON, D.C. Pyett v. 14 Penn Plaza Kathleen Phair Barnard Schwerin Campbell Barnard Iglitzin & Lavitt 18 W. Mercer Street, Suite 400 Seattle WA workerlaw.com 1
2 A. The Supreme Court s decision in Pyett. In 14 Penn Plaza LLC v. Pyett, 556 U.S., 129 S. Ct. 1456, 1461, 1474 (2009), the United States Supreme Court held that a collective bargaining agreement ( CBA ) provision that clearly and unmistakably provided that arbitration under the provisions of that agreement was the sole and exclusive remedy for violations of statutory protections listed, operated as a waiver of individual bargaining unit members right to judicial remedies for those violations. In so holding the Court answered the question it had avoided in Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998). In Wright, the Court noted the tension between Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974) (outcome of collectively bargained arbitration proceeding which concerned, in part, alleged violations of contractual prohibitions of race discrimination did not preclude grievant s right to a judicial forum for a Title VII race discrimination claim) and Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (an individual non-union securities broker s agreement to arbitrate any controversy in a securities dealer's registration application required the broker to arbitrate his ADEA claim). However, the Court in Wright did not reach the question of whether a union could waive individual bargaining unit member s right to access to the courts for statutory violations because it held that, even if unions were authorized to execute such waivers, the language of the purported waiver would have to meet the clear and unmistakable standard developed in case law concerning union waivers of National Labor Relations Act protections of their members. Wright, 525 U.S. at 77, n.1,
3 In Pyett, the Court answered the question left open in Wright by holding that because unions were the statutory collective bargaining representative for their bargaining unit members concerning mandatory subjects of bargaining, including arbitration provisions, unions could effectively bargain arbitration provisions that waived their bargaining unit members access to judicial forums for vindication of statutory rights. 129 S.Ct. at The Court, adhering to its reasoning in Gilmer, distinguished the selection of a forum from substantive rights under the ADEA, which could not be prospectively waived. Pyett, 129 S.Ct. at 1464 n. 5, Examining the contractual provisions at issue in Pyett, which specifically referenced the statutory rights that were to be subjected to the sole and exclusive forum of arbitration and required that the arbitrator apply appropriate law in rendering decisions based upon claims of discrimination, the Court held that these provisions constituted a clear and unmistakable waiver. Pyett, 129 S.Ct. at However, because of a factual dispute which required remand, the Court left open a significant question concerning whether the arbitration process outlined in the CBA in Pyett also operated to deny the substantive ADEA rights of the plaintiffs, and under what circumstances an CBA arbitration procedure would so deprive employees of their substantive rights as to be ineffective as a waiver of their right to proceed in court on statutory claims. Pyett and his fellow plaintiffs contended that their union s right to decide not to proceed to arbitration on their age discrimination claims effectively deprived them of any forum and therefore deprived them of their substantive ADEA rights. The employer contended that the plaintiffs had a right under the CBA process to 3
4 proceed without the union, a fact the union and the plaintiffs contested. Because of this fact dispute the Court did not reach the issue of whether a union s ability to determine which cases proceed to arbitration and which do not, and how those arbitration cases which proceeded would be tried, constituted a unenforceable prospective waiver of substantive rights. Pyett, 129 S.Ct. at See also 129 S.Ct. at 1481 (Souter, J., dissenting) ( On one level, the majority opinion may have little effect, for it explicitly reserves the question whether a CBA's waiver of a judicial forum is enforceable when the union controls access to and presentation of employees' claims in arbitration. ) B. Subsequent Cases concerning alleged waivers of judicial forums. 1. Clear and unmistakable (or not). Since Pyett was decided a few cases in the lower courts have addressed the question of whether the CBA language constitutes an effective waiver of access to a judicial forum for statutory claims. In Catrino v. Town of Ocean City, 2009 WL (D.Md. July 14, 2009), a plaintiff sued under the ADA after the union lost a grievance arbitration concerning his discharge. The court held that there had not been a waiver of a judicial forum for a disability discrimination claims because the CBA did not did not expressly state that statutory causes of action are arbitrable. The CBA contained a nondiscrimination clause requiring the employer to refrain from discrimination on the basis of disability, referred to the ADA to define disability, and provided for arbitration of violation of the non-discrimination clause. The court held that the CBA did not access to court on the ADA claim, but dismissed on other grounds. 4
5 In Shipkevich v. Staten Island University, 2009 WL , 2009 U.S. Dist. LEXIS (June 16, 2009 E.D.N.Y.) the court similarly held that a CBA that did not expressly reference statutes and did not explicitly say that statutory claims are arbitrable did not waive the grievant/plaintiff s access to court for Title VII of employment discrimination. St. Aubin v. Unilever, 2009 WL , *4-5 (N.D.Ill. June 2009) involved a CBA preamble that stated that the parties agreed to comply with all employment laws, including the FMLA, and other CBA provisions stating that, "Grievances within the meaning of the grievance procedure and of this arbitration clause shall consist only of disputes about the interpretation or application of particular clauses of this Agreement and about alleged violations of the Agreement. The arbitrator shall have no power to add to, or subtract from, or modify any of the terms of this Agreement...." The court held not only that the language of CBA did not constitute clear and unmistakable waiver, but that the fact that plaintiff has submitted evidence of FMLA violation at arbitration did not give the arbitration decision preclusive effect. In Dunnigan v. City of Peoria, 2009 WL (C.D.Ill. August 14, 2009), although the employer contended that a previous arbitration award finding no just cause for termination of the plaintiff/grievant s employment and ordering reinstatement with a suspension should be given preclusive effect, the Court rejected that argument because the defendant had not put CBA into evidence and therefore failed to prove that the CBA required plaintiff to arbitrate his Title VII race discrimination and retaliation claims. 5
6 In a clearly wrongly decided case, Twolde v. Owens & Minor Distribution, 2009 WL (D. Minn. June 10, 2009), involving a nondiscrimination on basis of union activity clause, the court treated that clause as waiver access to court for statutory nondiscrimination claims and treated an arbitrator s factual findings and conclusion that the employer had just cause to terminate grievant/plaintiff as preclusive in a Title VII discrimination case. In a different twist, the court in Mathews v. Denver Newspaper Agency, 2009 WL (D.Colo. May 4, 2009), held that a grievant/plaintiff who voluntarily submitted his race discrimination claim to arbitration under CBA that the parties treated as incorporating statutory non-discrimination duties, and where the plaintiff used his own lawyer waived his right to court forum and the doctrines of res judicata and collateral estoppel applied to preclude is court suit. Although the clear and unmistakable standard derives from the NLRA jurisprudence, the court in Warfield v. Beth Israel Deaconess Medical Center, 454 Mass. 390, 401, 910 N.E.2d 317, 327 (July ) applied it to assess an individual agreement to arbitrate in employment contract and held the language was too vague to waive access to judicial forum. 2. Effective forum waiver or ineffective substantive waiver. The few cased decided since the Supreme Court s decision in Pyett demonstrate a reluctance on the part of the lower courts to find an effective waiver where the right to proceed to arbitration is not controlled by the individual bargaining unit employee, rather than the Union. For example, in a case involving the same contractual language as in 6
7 Pyett, the District Court held that, because the CBA left total control over the decision to arbitrate to union, and union declined to do so, the grievant/plainitff s substantive right would be denied if she were precluded from access to court because of existence of the arbitration process in the CBA. Kravar v. Triangle Services, 2009 WL (S.D.N.Y. May 19, 2009). The court also rejected the employer s argument that, because it agreed to arbitrate with grievant/plaintiff after the union declined, an enforceable waiver of judicial forum had occurred. The court noted that the agreement the employer contended precluded plaintiff from court was an agreement with the union, not with plaintiff, who had never agreed to arbitration. Id. This case is now on appeal to the Second Circuit. Cf., Borrero v. Ruppert Housing Co. Inc., 2009 WL (S.D.N.Y. July 2, 2009) (in case involving same language as Pyett, the court dismissed complaint without prejudice, stating that if the union interferes with plaintiff s ability to arbitrate it will allow action to be filed again). 3. Ineffective waivers by union represented employees. In an unpublished opinion, the Second Circuit held that and agreement to arbitrate all work disputes signed by a union represented employee is not effective because only union has authority to negotiate such agreements where it is the collective bargaining agent. Mendez v. Starwood Hotels, 2009 WL , *2 (2nd Cir. Aug ) (unpublished), citing Pyett. 7
8 4. The continued viability of previous cases finding statutory violations in CBA election of forum clauses. In EEOC v. Board of Governors, 957 F.2d 424 (7th Cir.) cert. denied, 506 U.S. 906 (1992), the court held that a CBA grievance-arbitration provision that precluded arbitration if the grievant filed a charge with the EEOC deprived the plaintiff bargaining unit employee of a contractual remedy because of his exercise of a statutory remedy for age discrimination, and therefore violatedthe ADEA. See also, Johnson v. Palma, 931 F.2d 203 (2d Cir. 1991) (depriving a bargaining unit employee of a contractual remedy because of his or her exercise of a statutory remedy itself violates federal discrimination statutes). Rcently the Second Circuit concluded otherwise in Richardson v. Commission on Human Rights & Opportunities, 532 F.3d 114 (2nd Cir. 2008) (CBA provision that provided "disputes over claimed unlawful discrimination shall be subject to the grievance procedure but shall not be arbitrable if a complaint is filed with the Commission on Human Rights and Opportunities arising from the same common nucleus of operative fact" did not violate Title VII). Plaintiff in Richardson has petitioned for certiorari, 77 USLW 3563 (Jan 26, 2009)(NO ), and the effect of Pyett on this line of cases is discussed in the petition briefing. CONCLUSION While there has been little case law development yet, the implications of the Supreme Court s decision in Pyett will continue to spread throughout previously relatively settled areas where traditional labor law intersects with employment law. Questions concerning forum selection, claim preclusion, collateral estoppel, preemption, 8
9 and standards of review will all be litigated in a newly muddied context. Similarly the distinctions between labor arbitration and arbitration of purely statutory claims may become less clear, most likely with negative results for both processes. The Court did a disservice to employees, whether union represented or not, and to collective bargaining, when it abandoned the clear holding of Gardener-Denver and its progeny, by holding that statutory civil rights claims, and by implication, statutory minimum employment standards, could be subjected to arbitration under a CBA. Congress is considering the Arbitration Fairness Act of 2009 (S. 932; H.R. 1020) which would restore judicial enforcement for non-negotiable public law rights and return collective bargaining to the negotiation of improvements on the minimum working standards set by public authority. 9
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