As previously reported in the Workplace Labor Update, recent court decisions have given significant attention to the issue of the enforceability of agreements to arbitrate employment discrimination claims. Employers increasingly are seeking to promote arbitration as a less expensive and less time-consuming alternative to a jury trial for resolving employment disputes — including statutory employment discrimination disputes such as those that arise under Title VII, the ADEA, and the ADA. In this vein, the issue of whether unions may execute binding agreements to arbitrate such disputes on behalf of their members has been the subject of two noteworthy decisions.
Recently, in Wright v. Universal Maritime Service Corp., 119 S. Ct. 391 (1998), the Supreme Court took on this question. In that case, Ceasar Wright, a longshoreman, obtained jobs with a variety of companies through the Longshoreman's union's hiring hall. After injuring his back in a workplace accident, he accepted a $250,000 settlement of his permanent disability claim. He also received Social Security disability benefits. Wright claimed his injury unexpectedly healed and resumed taking work assignments through the union's hiring hall. One of the companies to which he was assigned soon discovered that he had previously certified that he was permanently and totally disabled. The company refused to hire Wright, claiming he was not qualified to perform longshoreman work. On the advice of his union, Wright retained counsel and sued the company under the ADA.
In response to the suit, the company argued that as a union member, Wright was subject to a collective bargaining agreement, which contained an arbitration clause mandating that he pursue any discrimination claim through arbitration. The district court dismissed the case because Wright had failed to pursue the arbitration procedure provided by the collective bargaining agreement, and the Fourth Circuit Court of Appeals affirmed that decision. Before the Supreme Court, Wright argued that unions cannot waive employees' rights under discrimination statutes. The EEOC and Justice Department together filed an amicus (friend of the court) brief supporting Wright, and arguing that unions can never waive individual rights.
The Supreme Court observed that Section 301 of the Labor Management Relations Act creates a statutory presumption that arbitrators are in a better position than courts to interpret the terms of a collective bargaining agreement. The Court found, however, that Wright's dispute concerned the meaning of a federal statute, the ADA, not the application or interpretation of any collective bargaining agreement.
Declining to take the hard line position advocated by Wright — that unions can never waive employees' rights to pursue discrimination claims in federal court — the Court instead held that in order for a union to waive an employees' rights to a federal judicial forum, the arbitration agreement must be “clear and unmistakable.” In Wright's case, the collective bargaining agreement was very general, providing only for arbitration of “matters under dispute,” and the remainder of the contract contained no explicit incorporation of statutory anti-discrimination requirements. Accordingly, the Court unanimously ruled that the collective bargaining agreement's general arbitration clause did not require Wright to use the arbitration procedure for the alleged ADA violation. Those seeking guidance from the decision on what an arbitration clause should contain in order to be clear and unmistakable were left waiting until another day — the Court avoided determining what arbitration clause language would be sufficiently explicit to be enforceable as to discrimination claims.
This new Supreme Court precedent was soon applied by the Fourth Circuit Court of Appeals in Harris v. General Motors Powertrain, 1999 WL 7865 (4th Cir. Jan. 11, 1999). Janet Harris worked for GMP as a production worker, and was a member of United Auto Workers (UAW). Harris was the only woman working in her department, and due to a series of unseemly incidents, filed grievances through UAW alleging sexual harassment. UAW and GMP reached a settlement, but Harris appealed the settlement, and eventually filed a Title VII action against her employer.
The district court dismissed Harris' gender discrimination claims, and she appealed. The Fourth Circuit found that a court is bound to enforce any legally negotiated arbitration clause that obligates the parties to submit Title VII claims to arbitration, including such clauses in collective bargaining agreements. Relying on the Wright decision, however, the Fourth Circuit noted that a union-negotiated waiver of the right to pursue statutory discrimination claims in a judicial forum must be “particularly clear.”
Although the GMP-UAW collective bargaining agreement prohibited discrimination, it did not purport to submit any disputes of this nature to arbitration. Accordingly, the Fourth Circuit held that the agreement did not foreclose Harris from asserting her Title VII claims in court. What guidance do these two decisions provide to employers? Ultimately, these decisions do not clarify for employers, unions, or plaintiffs what is permissible in terms of union-negotiated waivers. In order to implement a valid and enforceable union-negotiated agreement to arbitrate, employer should remember that the agreement must be explicit and unmistakable. Even then, the Courts have left open for another day the decision of whether an arbitration clause that clearly includes discrimination claims would be enforceable.
Recently, in Wright v. Universal Maritime Service Corp., 119 S. Ct. 391 (1998), the Supreme Court took on this question. In that case, Ceasar Wright, a longshoreman, obtained jobs with a variety of companies through the Longshoreman's union's hiring hall. After injuring his back in a workplace accident, he accepted a $250,000 settlement of his permanent disability claim. He also received Social Security disability benefits. Wright claimed his injury unexpectedly healed and resumed taking work assignments through the union's hiring hall. One of the companies to which he was assigned soon discovered that he had previously certified that he was permanently and totally disabled. The company refused to hire Wright, claiming he was not qualified to perform longshoreman work. On the advice of his union, Wright retained counsel and sued the company under the ADA.
In response to the suit, the company argued that as a union member, Wright was subject to a collective bargaining agreement, which contained an arbitration clause mandating that he pursue any discrimination claim through arbitration. The district court dismissed the case because Wright had failed to pursue the arbitration procedure provided by the collective bargaining agreement, and the Fourth Circuit Court of Appeals affirmed that decision. Before the Supreme Court, Wright argued that unions cannot waive employees' rights under discrimination statutes. The EEOC and Justice Department together filed an amicus (friend of the court) brief supporting Wright, and arguing that unions can never waive individual rights.
The Supreme Court observed that Section 301 of the Labor Management Relations Act creates a statutory presumption that arbitrators are in a better position than courts to interpret the terms of a collective bargaining agreement. The Court found, however, that Wright's dispute concerned the meaning of a federal statute, the ADA, not the application or interpretation of any collective bargaining agreement.
Declining to take the hard line position advocated by Wright — that unions can never waive employees' rights to pursue discrimination claims in federal court — the Court instead held that in order for a union to waive an employees' rights to a federal judicial forum, the arbitration agreement must be “clear and unmistakable.” In Wright's case, the collective bargaining agreement was very general, providing only for arbitration of “matters under dispute,” and the remainder of the contract contained no explicit incorporation of statutory anti-discrimination requirements. Accordingly, the Court unanimously ruled that the collective bargaining agreement's general arbitration clause did not require Wright to use the arbitration procedure for the alleged ADA violation. Those seeking guidance from the decision on what an arbitration clause should contain in order to be clear and unmistakable were left waiting until another day — the Court avoided determining what arbitration clause language would be sufficiently explicit to be enforceable as to discrimination claims.
This new Supreme Court precedent was soon applied by the Fourth Circuit Court of Appeals in Harris v. General Motors Powertrain, 1999 WL 7865 (4th Cir. Jan. 11, 1999). Janet Harris worked for GMP as a production worker, and was a member of United Auto Workers (UAW). Harris was the only woman working in her department, and due to a series of unseemly incidents, filed grievances through UAW alleging sexual harassment. UAW and GMP reached a settlement, but Harris appealed the settlement, and eventually filed a Title VII action against her employer.
The district court dismissed Harris' gender discrimination claims, and she appealed. The Fourth Circuit found that a court is bound to enforce any legally negotiated arbitration clause that obligates the parties to submit Title VII claims to arbitration, including such clauses in collective bargaining agreements. Relying on the Wright decision, however, the Fourth Circuit noted that a union-negotiated waiver of the right to pursue statutory discrimination claims in a judicial forum must be “particularly clear.”
Although the GMP-UAW collective bargaining agreement prohibited discrimination, it did not purport to submit any disputes of this nature to arbitration. Accordingly, the Fourth Circuit held that the agreement did not foreclose Harris from asserting her Title VII claims in court. What guidance do these two decisions provide to employers? Ultimately, these decisions do not clarify for employers, unions, or plaintiffs what is permissible in terms of union-negotiated waivers. In order to implement a valid and enforceable union-negotiated agreement to arbitrate, employer should remember that the agreement must be explicit and unmistakable. Even then, the Courts have left open for another day the decision of whether an arbitration clause that clearly includes discrimination claims would be enforceable.