Thursday, August 14, 2008

Mandatory Arbitration of Discrimination Claims?

The Supreme Court is set to resolve a percolating dispute among the Circuit Courts: Does a mandatory arbitration clause in a union collective bargaining agreement mean that the employee has no right to sue for discrimination and must, instead, bring their claims of discrimination to arbitration.

In this case -- 14 Penn Plaza LLC v. Pyett (07-581) -- the arbitration clause in the collective bargaining agreement stated that "All such claims [of age discrimination] shall be subject to the grievance and arbitration procedure [in the collective bargaining agreement] as the sole and exclusive remedy for violations."

The Second Circuit, which includes New York State, ruled that the employee retains the right to bring his own claim under federal law for age discrimination, and that the union cannot waive that right through collective bargaining.

The 2nd Circuit held that "arbitration provisions contained in a [collective bargaining agreement], which purport to waive employees' rights to a federal forum with respect to statutory claims, are unenforceable."

Oral argument in front of the Supreme Court wil occur next term, October 2008. Stay tuned.

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