Employers have another U.S. Supreme Court decision to contend with, 14 Penn Plaza LLC v. Pyett. In a 5-4 decision written by Justice Thomas, the Supreme Court today held that, at least in some circumstances, its 35-year old decision in Alexander v. Gardner-Denver Co. does not prevent a unionized employer from forcing an employee belonging to the bargaining unit to arbitrate his age discrimination claim rather than pursuing it through an ADEA lawsuit, where the union entered into a collective bargaining agreement that included a clear and express provision prohibiting discrimination. Depending on the prism through which one views the decision, it is either a giant step in overruling Gardner-Denver or a very narrow ruling that depends entirely on the specific facts and the language contained in the CBA.
Justice Thomas’ opinion makes a distinction between substantive rights and the forum in which those rights are pursued, and holds that allowing an age discrimination claim to proceed in an arbitral forum rather than in court does not affect the individual’s substantive right to be free from age discrimination. “The right to a judicial forum is not the nonwaivable ‘substantive right’ protected by the ADEA.” Since that is now the law of the land, would the Court also uphold individual employment agreements that contain an explicit waiver of the right to the judicial forum? One suspects that the current majority would see no difference, since the majority opinion states that “[N]othing in the law suggests a distinction between the status of arbitration agreements signed by an individual employee and those agreed to by a union representative.”
Such individual waiver agreements have had a checkered history, but may gain new life as a result of the Pyett decision. No doubt the dissenters would say that such an agreement, signed by the individual in order to obtain employment, is a contract of adhesion. But for the moment, it seems likely that any clear and unmistakable waiver of the right to pursue a discrimination claim in court will be upheld. As the dissent points out in what may be nothing more than a bit of wishful thinking, the majority left itself some wiggle room and the decision “may have little effect” since the court took pains to point out that it was not deciding whether a CBA’s waiver of a judicial forum is enforceable when the union has exclusive control over access to and presentation of employees’ claims in arbitration. So the door remains open a crack for unionized employees to continue to file Title VII, ADEA and ADA lawsuits. Whether Congress will react to this decision with another Ledbetter Act remains to be seen. Unions may be unwilling to make it an issue, since the decision increases the importance of the union’s role.