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US Supreme Court Permits Unions to Agree to Arbitrate Discrimination Claims

The U.S. Supreme Court, in 14 Penn Plaza LLC et al. v. Pyett et al. , a decision issued last week, held that a union and an employer can agree that employee discrimination claims will be submitted to arbitration only, and will not be filed in court. The Court overruled its 1974 decision that had long been relied upon by employment lawyers for the proposition that unions could not negotiate away an employee’s right to sue in court for discrimination.

“As in any contractual negotiation, a union may agree to the inclusion of an arbitration provision in a collective-bargaining agreement in return for other concessions from the employer,” the Court concluded. “Courts generally may not interfere in this bargained-for exchange.”

The court’s opinion involves federal anti-discrimination law, and thus is relevant to any California employer with a unionized workforce.

This decision may soon become very significant, depending on the outcome of pending legislation. The Obama administration and Congress have been trying to obtain enough votes to enact the “Employee Free Choice Act” (EFCA), which would eliminate the right to secret ballot votes in union elections. Currently, the EFCA is stalled due to a lack of the 60 votes needed to override a filibuster. However, the EFCA is likely to resurface for a vote in some form later this year.

If the EFCA passes in either its original or a modified form, the percentage of American workers belonging to unions will almost certainly rise. And if that occurs, then the decision in 14 Penn Plaza, LLC will loom large, as it would give employers an additional bargaining chip in negotiations. Under those circumstances, Congress might vote to amend the federal anti-discrimination laws to prevent unions from negotiating away the right to sue – under any circumstances.

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.