Case analysis assignment: 14 Penn Plaza v. Pyett
Facts of the Case:
A group of employees brought this action following a job transfer they believed to be based on age discrimination. The employees filed a grievance with their union, including the age discrimination issues but also asserting that the transfer violated their collective bargaining agreement. The union pursued the employees' collective bargaining claim through Penn Plaza's arbitration system; however, the employees themselves pursued their age discrimination claim in federal court under the Age Discrimination in Employment Act (ADEA). Penn Plaza argued that the arbitration clause included in the employment contract, stating that all age discrimination claims must be pursued through arbitration, prevented the employees from bringing the claim in federal court. The district court ruled in favor of the employees, holding the arbitration clause unconscionable and therefore unenforceable.
The U.S. Court of Appeals for the Second Circuit affirmed the ruling, relying on its previous decisions holding that arbitration clauses with respect to statutory claims, such as the ADEA, are unenforceable.
Question:
Are arbitration clauses in employment contracts -- waiving an employee's right to bring statutory claims in federal court -- enforceable?
Conclusion:
Yes. The Supreme Court held that a provision in a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law. With Justice Clarence Thomas writing for the majority and joined by Chief Justice John G. Roberts and Justices Anthony G. Scalia, Anthony M. Kennedy, and Samuel A. Alito, the Court reasoned that, here, the arbitration provision was a "bargained-for exchange" in the collective bargaining agreement and thus should not be interfered with by the courts. The Court went on to state that because the ADEA itself did not mandate such interference, the arbitration provision should be enforced.
Justice John Paul Stevens wrote a separate dissenting opinion. He noted that the majority opinion was a departure from Supreme Court precedent with respect to arbitration clauses in collective bargaining agreements. He went on to state that it was it was Congress' responsibility to reassess the policy arguments favoring arbitration rather than for the Supreme Court to decide. Justice David H. Souter also wrote a separate dissenting opinion and was joined by Justices Stevens, Ruth Bader Ginsburg, and Stephen G. Breyer. He reemphasized that Supreme Court precedent did not preclude the pursuit of an ADEA claim because of an arbitration provision in a collective bargaining agreement, as in this case.
Decision
Decision: 5 votes for 14 Penn Plaza LLC, 4 vote(s) against
Legal provision: Age Discrimination in Employment Act, arbitration
Source of above: http://www.oyez.org/cases/2000-2009/2008/2008_07_581
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Assignment
Listen first to the Opinion Announcement, whose link is found on the link below.
Then: Hear the actual oral argument before the Supreme Court, also at:
The Oyez Project, 14 Penn Plaza LLC v. Pyett , 556 U.S. ___ (2009)
available at: (http://oyez.org/cases/2000-2009/2008/2008_07_581)
Your assignment [due midnight April 11, 2011]
Listen to these oral arguments. Listen also to the Opinion Announcement. Read the Contract Excerpts provided at the end of this paper and answer the questions below, which are worth ten points each.
1. Which of the following clauses is most like the one in the case 14 Penn Plaza, and why?
2. Which of the clauses would you say is most beneficial to the union side, and why?
3. Which of the clauses preserves the most rights of the worker as an individual, either represented by the union or otherwise?
Contract Excerpts
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a. “The parties (Labor and Management) hereby agree that the Grievance Procedure shall include as its concluding step an arbitration process which may be employed when the parties cannot reach agreement on the outcome of 1) A particular grievance involving the rights of a member; 2) a dispute over the definition or meaning of terms of this Agreement or 3) Any other matter specific to this Agreement.”
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b. “The parties agree that arbitration is the required, final, binding and exclusive forum for the resolution of any and all disputes arising under the terms of this collective bargaining agreement. Further, any claim or controversy of whatever nature, including claims arising under common law or based upon any state, federal or local statute, order, ordinance or regulation, and any claims arising out of this agreement during the term of or after expiration, shall be resolved by final and binding arbitration as described in the agreement.”
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c. “Notwithstanding any other provision of this Agreement, the Parties agree that the final step of the three-step Grievance Procedure shall include arbitration for matters arising out of the collective bargaining agreement and its application to discipline as applied by the employer. The union reserves the right to pursue matters outside the parameters of the agreement through other legal forums.
File name: Case analysis
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