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14 Penn Plaza's Impact on Collective Bargaining
Years ago, arbitration was frowned upon by the courts as a second-class system of justice that was unable to provide the thoughtful and full relief that courts could award. Recent jurisprudence has repudiated these antiquated beliefs regarding arbitration, and courts today readily enforce arbitration agreements. In 14 Penn Plaza v. Pyett, 07-581 (S. Ct. April 1, 2009), the Supreme Court continued this trend by clearly stating that a union-negotiated arbitration agreement can bind individual employees to arbitrate statutory discrimination claims. Accordingly, employers and unions should consider taking advantage of the benefits of arbitration by including provisions in future collective bargaining agreements (“CBAs”) that require unionized employees to arbitrate statutory claims.
The Supreme Court's Decision
The underlying lawsuit was brought by three night watchmen and porters employed by Temco Service Industries, Inc., and represented by Local 32BJ, SEIU (“Local 32BJ” or “Union”). As a result of 14 Penn Plaza hiring licensed security officers, the employees were reassigned from their duties monitoring the building's lobby to different duties within their job descriptions. The Union demanded arbitration under the Local 32 BJ / Realty Advisory Board on Labor Relations, Inc.'s (“RAB's”) CBA for alleged contract and statutory age discrimination violations relating to the reassignment. The Union arbitrated the contract claims, but withdrew the discrimination claims.
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