| If the Arbitration Fairness Act of 2009 (AFA) (S. | | | | seeking to compel arbitration of the matter |
| 931) (H.R. 1020) passes it will overturn the | | | | pursuant to the CBA. As was typically the case |
| controversial decision rendered in April 2009 by | | | | prior to the Penn Plaza decision, under precedent |
| the U.S. Supreme Court in 14 Penn Plaza v. Pyett | | | | set by Alexander v. Gardner-Denver, 415 U.S. 36 |
| (“Penn Plaza”). See this and other legal | | | | (1974) (“Gardner-Denver”), the lower |
| updates at | | | | court denied the employer’s motion on the |
| Specifically, the Act, introduced in February 2009, | | | | ground that a CBA provision cannot waive an |
| would amend the Federal Arbitration Act (FAA) to | | | | individual employee's right to a judicial forum on a |
| prohibit mandatory arbitration of employment | | | | federal age discrimination claim. |
| claims unless provided under the terms of a | | | | Ultimately, in a 5-4 decision the Court held that a |
| collective bargaining agreement. The Act would | | | | provision in a CBA that clearly and unmistakably |
| make mandatory arbitration clauses in | | | | requires union members to arbitrate their federal |
| employment, consumer, and franchise | | | | age discrimination claims is enforceable against the |
| agreements unenforceable. | | | | individual employees. The Court found that the |
| In addition, contrary to the Court’s recent | | | | CBA provision requiring arbitration of discrimination |
| decision in Penn Plaza, employees would not be | | | | claims was clearly a "condition of employment" |
| permitted to waive the right to take constitutional | | | | that was subject to mandatory bargaining under |
| or statutory claims to court. | | | | Section 159(a) of the National Labor Relations Act |
| On April 1, 2009, the Court decided Penn Plaza. | | | | (“NLRA”). The Court also found that the |
| Pyett was a member of the Service Employees | | | | arbitration provision has to be honored unless the |
| International Union, Local 32BJ (“Union”), | | | | ADEA removed claims from "the NLRA's broad |
| which has the exclusive authority to bargain with | | | | sweep," an argument rejected by the Court. |
| employers on behalf of employees in the building | | | | The Court rejected the applicability of |
| services industry in New York City. | | | | Gardner-Denver in that the CBA in that case did |
| The Union entered into a collective bargaining | | | | not cover statutory claims and nevertheless the |
| agreement (“CBA”) with the Retail | | | | prevailing view that arbitration should not be used |
| Advisory Board on Labor Relations, a | | | | to vindicate statutory rights no longer has merit. |
| multiemployer bargaining association for New York | | | | In introducing the bill, Senator Russ Feingold made |
| City's real estate industry. The CBA required | | | | clear that while arbitration has |
| union members to submit all claims of | | | | “advantages” it also “can be used as |
| employment discrimination—including age | | | | a weapon by the stronger party against the |
| discrimination—to binding arbitration. | | | | weaker party.” Senator Feingold also stated |
| Pyett sued in federal court for age discrimination | | | | the opinion that arbitration provisions should be |
| after his employer reassigned him to a different | | | | utilized only when both parties knowingly agree to |
| job. In response, the employer filed a motion | | | | arbitrate after the dispute has arisen. |