<B>BREAKING NEWS:</b> Supreme Court Strengthens Arbitration in Labor Case Ruling

“We hold that a collective-bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law,” Justice Clarence Thomas wrote in a ruling that may boost arbitration more broadly than just in age-discrimination cases.

The arbitration ruling in 14 Penn Plaza v. Pyett drew sharp dissents from Justices David Souter and John Paul Stevens, who accused the majority of abandoning a line of precedents that kept unions from waiving employees' rights to a court hearing on bias claims.

“Human ingenuity is not equal to the task” of reconciling the Court's new and old positions, said Souter, who was joined by Justices John Paul Stevens, Ruth Bader Ginsburg, and Stephen Breyer. Stevens wrote, “Today the majority's preference for arbitration again leads it to disregard our precedent.” Stevens said that in favoring arbitration clauses in 14 Penn Plaza and other recent cases, the Court is “making policy choices not made by Congress.”

Thomas, in the majority ruling, said the Court's prior skepticism about the merits of arbitration “rested on a misconceived view of arbitration that this Court has since abandoned.”

The ruling overturned a decision by the Second U.S. Circuit Court of Appeals that said an arbitration clause in an agreement between a New York local of the Service Employees International Union and a coalition of employers in the real estate industry could not be enforced.

“Employees' access to arbitration and its proven benefits for fairly resolving workplace claims has been given the legal support it deserves,” Proskauer Rose's Paul Salvatore, who won the case for the employers, said in an e-mailed statement. “This decision firmly enshrines in the law the important principle that collectively bargained arbitration agreements are every bit as valid and enforceable as nonunion-workplace arbitration agreements.”

The ruling will likely also apply in the context of other anti-discrimination laws, says Mayer Brown's David Gossett, who adds that the decision is the latest of several that have marginalized earlier precedents that are “relics of an earlier era when the Supreme Court was pretty hostile to arbitration.”

The Supreme Court's growing embrace of the virtues of arbitration continued on April 1 with a 5-4 ruling endorsing labor contracts that send age discrimination claims to arbitration rather than to federal courts.