Supreme Court hears third arbitration case this term: 14 Penn Plaza v. Pyett

The U.S. Supreme Court just granted certiorari in a third arbitration case for this term!! 14 Penn Plaza v. Pyett, — S.Ct. —-, 2008 WL 423540 (U.S.), 76 USLW 3255 (February 19, 2008). The Pyett case will address whether a union-negotiated waiver of employees’ rights to proceed in a judicial forum for federal statutory causes of action is enforceable. The case, involving plaintiffs with ADEA claims, raises the question whether a clear and unmistakable waiver of the unionized employees’ rights to a judicial forum for a federal claims of employment discrimination is enforceable, a question left open nine years ago in Wright v. Universal Maritime Services Corp., 520 U.S. 70 (1998). The Pyett arbitration clause appears to be a clear and unmistakable waiver (the arbitration clause identifies the statutory causes of action and then says that all such claims shall be subject to the grievance and arbitration procedure). Other circuits (like the 4th Circuit in Safrit v. Cone Mills Corp., 248 F.3d 306 (4th Cir. 2001)) would clearly describe this waiver as “clear and unmistakable”. So it would appear that the Supreme Court is now interested in answering the question whether such waivers are enforceable. The Second Circuit thinks such waivers are unenforceable and states that the Pyett case is a good example of why such waivers should be treated differently than those in cases involving individual employees (like Gilmer). According to footnote 5, the plaintiffs claim that the Union refused to submit the wrongful transfer claims to arbitration because the Union had agreed to the new contract. According to the Second Circuit, such action would subordinate the interests of the individual in favor of the interests of the collective — at least one of the reasons the Supreme Court held in Gardner-Denver that a collective bargaining agreement could not waive individual rights to bring a statutory discrimination claim in a judicial forum.

I believe that, despite the concerns raised in the footnote, the Supreme Court is taking this case to overturn Gardner-Denver and enforce the clear and unmistakable waiver apparent in Pyett.

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