U.S. Supreme Court Rules On Mandatory Arbitration Clauses
Contained In Collective Bargaining Agreements

In Penn Plaza LLC v. Pyett, 129 S. Ct. 1456 (2009), the U.S. Supreme Court considered the enforceability of mandatory arbitration clauses found in collective bargaining agreements that waive a covered employee’s right to file federal statutory causes of action.   The case came before the Court after the employer-defendants in an age discrimination suit appealed the district court’s denial of their motion to compel arbitration in accordance with the applicable collective bargaining agreement.  Prior to filing suit, the plaintiffs filed several grievances, including age discrimination, with their union under a collective bargaining agreement and these grievances were submitted to arbitration.  Shortly after arbitration began, the union declined to pursue plaintiffs’ claims of age discrimination.  The plaintiffs commenced this lawsuit in pursuit of their age discrimination claims.

The Supreme Court reviewed whether an arbitration clause contained in a collective bargaining agreement which is freely negotiated by a union and an employer and which clearly and unmistakably waives the union members’ right to a judicial forum for their statutory discrimination claims is enforceable.  The Court concluded that a provision in a collective bargaining agreement which clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of law.  The Court also found that employment-related discrimination claims are “conditions of employment” under the National Labor Relations Act and therefore are mandatory subjects of bargaining.

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