Arbitration Agreements in Union Contacts are Enforceable; US Supreme Court in Penn Plaza v. Pyett

USSupremeCourtRightFountain 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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Drew M. Capuder

Publisher of Drew Capuder's Employment Law Blog. Lawyer with more than 29 years experience, focusing on employment law, commercial litigation, and mediation. Extensive trial and appellate experience in state and federal courts. Call Drew at 304-333-5261
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2 thoughts on “Arbitration Agreements in Union Contacts are Enforceable; US Supreme Court in Penn Plaza v. Pyett”

  1. I am a CPA that spe­cial­izes in eco­nom­ic dam­ages and I find this site to be very use­ful. I look for­ward to future posts such as this one on arbi­tra­tion.

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