COLLECTIVE BARGAINING AGREEMENTS IN DISCRIMINATION CASES: FORUM SHOPPING THEIR WAY INTO A NEW YORK DISTRICT COURT NEAR YOU!

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1 Brigham Young University Hawaii From the SelectedWorks of George Klidonas September 24, 2009 COLLECTIVE BARGAINING AGREEMENTS IN DISCRIMINATION CASES: FORUM SHOPPING THEIR WAY INTO A NEW YORK DISTRICT COURT NEAR YOU! George Klidonas Available at:

2 George Klidonas I. Introduction The conflict of law that exists within the New York Courts is whether arbitration provisions that are negotiated for union employees in collective bargaining agreements are enforceable for sights arising from Civil Rights Laws. The problem is that the First Department has refused to apply the standard that the Second Circuit has enunciated for a waiver of an employee s statutory right, which is a clear and unmistakable waiver. The Appellate Division along with other state courts should follow the Second Circuit on this issue since Civil Rights are an integral part of federal law and the constitution. II. Supreme Court In Alexander v. Gardner-Denver, Co., 415 U.S. 36 (1974), the Court held that an employee does not forfeit his right to a judicial forum for claimed discriminatory discharge in violation of Title VII of the Civil Rights Act of 1964 if "he first pursues his grievance to final arbitration under the nondiscrimination clause of a collectivebargaining agreement. The Court reasoned that a grievance is designed to vindicate a "contractual right" under a CBA, while a lawsuit under Title VII asserts "independent statutory rights accorded by Congress." The statutory cause of action was not waived by the union's agreement to the arbitration provision of the CBA, since "there can be no prospective waiver of an employee's rights under Title VII." However, the Supreme Court later narrowed the holding in Alexander, and in

3 Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) the Court held that a claim brought under the Age Discrimination in Employment Act of 1967 (ADEA) could be subject to compulsory arbitration pursuant to an arbitration provision in a securities registration form. Relying upon the federal policy favoring arbitration embodied in the Federal Arbitration Act (FAA) the Court said that "statutory claims may be the subject of an arbitration agreement, enforceable pursuant to the FAA." The Supreme Court later on in Wright v. Universal Maritime Service Corp., 525 U.S. 70, reconciled the two cases and held, without addressing the issue of enforceability, that as a condition precedent to enforceability, collective bargaining agreements, unlike employment contracts executed by individual employees, that purport to waive an employee's right to bring discrimination claims in federal court must be clear and unmistakable. The Court however found it unnecessary to resolve the question of the validity of a union-negotiated waiver. III. Second Circuit The Second Circuit has resolved the question that the Supreme Court has left open. In Rogers v. New York University, 220 F.3d 73 (2d Cir. 2000), the collective bargaining agreement contains a "no discrimination" provision, which stated that "there shall be no discrimination as defined by applicable Federal, New York State, and New York City laws, against any present or future employee by reason of... physical or mental disability...." The collective bargaining agreement also provided that "employees are entitled to all provisions of the Family and Medical Leave Act of 1993

4 that are not specifically provided for in this agreement." The court discussed the waiver of rights via negotiations, and lower courts have held that when the arbitration provision has been negotiated by a union in a collective bargaining agreement, Gardner-Denver applies, and the Second Circuit is no exception. Therefore here the agreement is not enforceable because the collective bargaining agreement does not contain a provision where employees explicitly agree to submit all federal claims to arbitration. Also, the collective bargaining agreement does not incorporate the federal antidiscrimination law because the reference to the law was too broad and it does not explicitly comply with the law that a contractual commitment is subject to the arbitration provision. Fayer v. Town of Middlebury, 258 F.3d 117 (2d Cir. 2001) affirmed Rogers, and held that an arbitration clause in a union collective bargaining agreement is not enforceable against an individual employee's American with Disabilities Act and Family and Medical Leave Act claims. The arbitration agreement is not enforceable here because the provision was not clear and unmistakable. The clause merely provides for arbitration of disputes "as to the interpretation and application of any clause or clauses in the [Collective Bargaining] Agreement." This clause is even narrower than the arbitration clause that was at issue in Wright, which purported to extend to "all matters affecting wages, hours, and other terms and conditions of employment." IV. New York State The New York Court of Appeals in Fletcher v. Kidder, Peabody, & Company, 619 N.E.2d 998 (NY 1993), the court held in light of Gilmer, that their decision in

5 Wertheim is not longer good law and instead the arbitrability of statutory discrimination claims is to be determined by reference to the Congress's intent with regards to alternative dispute resolution of that class of claims. The reasoned that there was nothing in the legislative history of either the Civil rights Act of 1991or the recently adopted amendments to that statute that would suggest the existence of a congressional intent to override the general rule that anticipatory contracts to arbitrate are enforceable under the FAA. Consequently, in the absence of clear and unambiguous proof of legislative intent to the contrary, we are obliged to hold that these cases are governed by the presumption of arbitrability that is established by the FAA. The Appellate Division later on held that the rule that agreements to arbitrate are unenforceable in the context of disputes involving statutory claims of unlawful discrimination is inapplicable in cases where the enforceability of the arbitration agreement is governed by the FAA. The Appellate Division however limited this holding to cases where the arbitration clause was required for claims arising out of plaintiff s employment or specifically required arbitration of statutory discrimination claims. In other words, if the employee agrees to arbitrate, then the employee has waived his right to a judicial forum. The Appellate Division however, later on changed its disposition on this issue in Garcia v. Bellmarc Property Management, 745 N.Y.S.2d 13 (NY App. Div. 2002), and held that by agreeing to arbitrate a statutory claim, a party does not forego the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial forum. Further, because Alexander was not decided under the FAA, it does not reflect modern federal policy favoring arbitration. The Appellate Division however

6 neglects the intent of Congress to have Civil Rights cases in a judicial forum, rather than an arbitral forum. Clearly the state courts have neglected the holding of the Second Circuit.