4/1/09: The US Supreme Court ruled that “pre-dispute arbitration agreements” in collective bargaining agreements (union contracts) are enforceable, in Penn Plaza PLLC v. Pyett, 129 S. Ct. 1456 (2009) (5-4 decision).
This was an age discrimination case under the Age Discrimination in Employment Act of 1967 (ADEA). The plaintiff was a member of a union, and the collective bargaining agreement (union contract) required submitting age discrimination claims to binding arbitration.
The US Supreme Court had previously ruled, but not in a labor union setting, that arbitration agreements for ADEA claims were enforceable under the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26-33 (1991)). So the real issue in Penn Plaza was whether there would be a different result because of the union contract setting and the National Labor Relations Act.
The Supreme Court in Penn Plaza, in a divided decision (5-4), held that the arbitration agreement contained in the union contract was enforceable.
The enforceability of arbitration agreements for employment disputes has been a political hot potato, and The Arbitration Fairness Act of 2009 (H.R. 1020) was introduced in the US House on February 12, 2009. The bill has 36 co-sponsors, and has been referred to the House Committee on the Judiciary. If it passes, it would essentially overrule Penn Plaza and other cases which have held that employment pre-dispute arbitration agreements are enforceable.
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