April 01, 2009

Supreme Court Decides 14 Penn Plaza LLC v. Pyett

On April 1, 2009, the Supreme Court decided 14 Penn Plaza LLC v. Pyett, No. 07-581.

Steven Pyett was a member of the Service Employees International Union, Local 32BJ, which has the exclusive authority to bargain with employers on behalf of employees in the building services industry in New York City. The union entered into a collective bargaining agreement (CBA) with the Retail Advisory Board on Labor Relations, a multiemployer bargaining association for New York City's real estate industry. The CBA required union members to submit all claims of employment discrimination—including age discrimination—to binding arbitration. Pyett was one of a number of employees who were reassigned to different jobs and claimed that the reassignment was on account of their age. When Pyett sued in federal court, the employer moved to compel arbitration, citing the CBA's arbitration provision. The district court denied the motion on the ground that a CBA provision cannot waive an individual employee's right to a judicial forum for an Age Discrimination in Employment Act of 1967 (ADEA) claim.

In a 5-4 decision, the Supreme Court held that a provision in a CBA that clearly and unmistakably requires union members to arbitrate their ADEA claims is enforceable against the individual employees. The Court held that the CBA provision requiring arbitration of discrimination claims was clearly a "condition of employment" that was subject to mandatory bargaining under Section 159(a) of the National Labor Relations Act (NLRA). From there, the Court held that the arbitration provision has to be honored unless the ADEA removed claims from "the NLRA's broad sweep." The Court held that it did not. The Court distinguished Alexander v. Gardner-Denver, 415 U.S. 36 (1974), and its progeny on the ground that Gardner-Denver dealt with a CBA that did not cover statutory claims. The Court acknowledged that Gardner-Denver and subsequent cases included "broad dicta that was highly critical of the use of arbitration for the vindication of statutory antidiscrimination right," but rejected such sentiments on the ground that it was "a misconceived view of arbitration that this Court has since abandoned."

Justice Thomas delivered the majority opinion. Justice Souter filed a dissent on behalf of himself and Justices Stevens, Ginsburg and Breyer. Justice Stevens also filed a dissenting opinion of his own.

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