Arbitration & Mediation

U.S. Supreme Court Embraces Arbitration in Title VII, ADEA Case

By Christopher B. Hopkins, Esq.

In a 5-4 opinion, the United States Supreme Court issued a decision that union members can be required to arbitrate ADA, Title VII, and ADEA discrimination cases based upon an arbitration clause negotiated in the collective bargaining agreement by the union on behalf of the employee. While this case may ultimately be more of an employment case than an arbitration case, the Court's position on arbitration is important.

In 14 Penn Plaza LLC v. Steven Pyett, a collective bargaining agreement clearly stated that employees must arbitrate claims. Based upon a 1974 case, the employee claimed that federal statutory claims for discrimination under Title VII and ADEA can't be arbitrated. The Court held that the 1974 opinion was not that broad, as evidenced by a 1991 case. The emerging "Gilmer test" appears to be that statutory claims can be arbitrated unless Congress has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue." The anti-arbitration sentiment from Congress needs to be explicitly stated.

In short, when a federal statute discusses that a claimant has remedies in a court of competent jurisdiction, this opinion suggests that such wording does not preclude arbitration.

Notably, these older 1974/1991 cases had some anti-arbitration dicta which the Court "has since abandoned" due to a "misconceived view of arbitration." Previously, the Court had erred in stating that submitting statutory claims to arbitration was a waiver of those rights but "it confused an agreement to arbitrate those statutory rights with a prospective waiver of those statutory rights."

The Court also changed its mind on the notion that discovery in arbitration was not adequate for these kinds of cases. Now, the court confirms that "arbitral tribunals are readily capable... [and] there is no reason to assume at the outset that arbitrators will not follow the law." As to discovery, while "arbitration procedures are more streamlined than federal litigation, [that] is not a basis for finding the forum somehow inadequate..." In short, objections about arbitration in general "do not have a credible basis."

Dissents argued that this opinion broke from precedent, although none of the dissenting justices receded from the pro-arbitration stance to any significant degree.

Full post as published by Florida Arbitration Law on April 07, 2009 (boomark / email).