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Supreme Court Rules That Collective Bargaining Agreement Can Waive Employee Rights Under ADEA


April 21, 2009

The United States Supreme Court recently held in 14 Penn Plaza LLC v. Pyett that a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate claims arising under the Age Discrimination in Employment Act of 1967 ("the ADEA") is enforceable.

In the Pyett case, a group of union-represented employees filed grievances under the collective bargaining agreement challenging their work reassignments. They claimed, in part, that the reassignments were unlawfully based on their age. After the union withdrew the age discrimination claims from arbitration, the employees filed suit in district court alleging that the employer's conduct violated the ADEA. The employer moved to compel arbitration of the age discrimination claims. The lower court denied the motion, holding that a collective bargaining agreement could not waive employees' rights to a judicial forum for causes of action created by Congress.

In a 5-4 opinion authored by Justice Thomas, the United States Supreme Court reversed, upholding the collective bargaining agreement's requirement that the employees arbitrate their age discrimination claims. The Court initially noted that, as the employees' exclusive representative, the union enjoyed broad authority in the negotiation and administration of the contract under the National Labor Relations Act. In this instance, the union and the employer bargained in good faith and agreed that employment-related discrimination claims, including those arising under the ADEA, would be resolved in arbitration. The parties specifically agreed that "[t]here shall be no discrimination against any present or future employee by reason of race, creed, color, age, disability, national origin, sex, union membership, or any other characteristic protected by law, including, but not limited to, claims made pursuant to Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the New York State Human Rights Law, the New York City Human Rights Code, ... or any other similar laws, rules, or regulations. All such claims shall be subject to the grievance and arbitration procedures ... ." According to the Court, this freely negotiated term qualified as a mandatory subject of bargaining, which must be honored unless the ADEA precluded the arbitration of claims brought under the statute. Because ADEA claims can be arbitrated, the Court held there was no legal basis to strike down the arbitration clause.

Although Pyett certainly falls in the "win column" for management, employers should take note that waiver language in a labor contract needs to be clear and unmistakable for employees to have waived their statutory claims. A generic non-discrimination clause (i.e., "the company and union will not discriminate based on ...") is likely insufficient to operate as waiver of a statutory discrimination claim.

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