Rick Bales on Pyett; Commentary by Cole

Interesting and informative post on Pyett v. 14 Penn Plaza from Rick Bales at Workplace Prof Blog. Rick and I participated on a panel on recently decided and to be decided Supreme Court cases at the ABA Section on Dispute Resolution Conference during the first week of April. His post can be found at http://lawprofessors.typepad.com/laborprof_blog/2008/04/pyett-and-arbit.html

Rick says:

“I think the Court should decide narrowly that union waivers of a statutory right to sue should be enforceable only if the union and employer provide employees with an adequate forum for resolving their statutory rights. In Pyett, there was no such forum, so I think the Court should uphold the Second Circuit decision below. . .

Unions inherently are majoritarian, and they often have interests that conflict with the interests of individual members. It is not at all difficult to imagine a union declining to pursue the discrimination claim of a handful of employees in return for a work rule or a raise that benefits all employees in the bargaining unit. Unions can make this decision unilaterally, because they have unfettered discretion over whether to pursue or drop grievances, subject only to the remote possibility of an employee bringing a DFR suit.

This is precisely what seems to have happened in Pyett, at least according to the Second Circuit’s description of events. The union refused to pursue in arbitration the age discrimination claims brought by the plaintiffs.

For more than twenty years now, the Supreme Court has recited like a mantra that arbitration is not a waiver of substantive rights, but merely a substitute forum. But if the Supreme Court in Pyett overrules the Second Circuit, the arbitration clause will function not as a substitute forum, but as a waiver of any forum whatever. The Union waived the plaintiff’s right to litigate by signing the arbitration clause, then waived the plaintiff’s right to arbitrate by declining to arbitrate the case.

I think the Court should hold that a union-negotiated waiver will be effective only if the arbitration agreement provides employees with an adequate forum for resolving their statutory rights. No forum, no waiver. Unions could provide this forum in a variety of ways, such as by guaranteeing that that all statutory claims will go to an arbitrator, or by giving employees the right to pursue arbitration under the collective bargaining agreement at their own expense.”

Rick may be right (or is that Wright), but I think there is a reasonable chance that the Court will enforce the waiver, which Rick agrees is clear and unmistakable. Although the union in this case did not pursue the employee’s discrimination claim, the employee can bring a duty of fair representation claim againt the union if he believes that the union did not pursue his claim for discriminatory reasons. I also think there are better arguments to enforce a union waiver of the right to bring statutory claims in court than there is to enforce an individual’s waiver (as in Gilmer). I wrote about this in an article entitled, A Funny Thing Happened on the Way to the (Alternative) Forum: Reexamining Alexander v. Gardner-Denver in the Wake of Gilmer v. Interstate/Johnson Lane Corp., 1997 B.Y.U. L. Rev. 591.

Sarah Cole