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Employment Law

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by Bob Lawson

Is a union employee precluded from filing a discrimination lawsuit, such as a race-discrimination case or an age-discrimination lawsuit, because the collective bargaining agreement contains language which requires the arbitration of all disputes between the employer and the employee?

The answer varies among the federal courts. The difference of opinion is based, in part, on the ongoing debate regarding an employee's individual rights under federal employment laws vs. the collective rights negotiated between an employer and a union representative, which has been the foundation of the federal labor laws for the last 60 years.

In 1974, the U.S. Supreme Court stated that an employee's Title VII race discrimination lawsuit was not barred, notwithstanding a general arbitration clause in the collective bargaining agreement. The Supreme Court also noted there can be no prospective waiver of an employee's rights under Title VII. Other courts followed this principle, and it appeared the question was answered.

However, in 1991, the Supreme Court initiated the current debate based upon a decision involving a non-union employee. The court held that a securities industries employee could be compelled to arbitrate a federal age discrimination claim because of an arbitration clause contained in his securities registration application which required arbitration of all disputes, including employment claims.

The Supreme Court stated, interpreting this case under the Federal Arbitration Act, "it is now clear that statutory claims may be the subject of an arbitration agreement."

The court, recognizing the viability of arbitration, indicated an arbitration clause does not require an individual to relinquish one's substantive rights under the federal employment laws, but only requires the resolution of such claims in an arbitral, rather than a judicial, forum.

After 1991, several courts applied the Supreme Court's reasoning to require the arbitration of employment-related claims by non-union employees. These arbitration clauses were contained in employees' personnel policies, company handbooks and employment contracts. However, courts continued to struggle when arbitration of an employment claim was based on a collective bargaining agreement.

Should the union employee be required to arbitrate his or her employment claim because a union representative has agreed to this requirement? The 4th Circuit Court of Appeals has answered affirmatively while the 7th, 8th (which includes Missouri), 10th and 11th circuits have refused to compel union employees to submit their statutory employment claims to arbitration, notwithstanding the arbitration clauses contained in the collective bargaining agreement.

The 4th Circuit contends the union had the right to bargain for the terms and conditions of employment of its members, including bargaining for the right to arbitrate. Therefore, the union employee was a party to a voluntary agreement to arbitrate all grievances, including the requirement to arbitrate all employment discrimination claims before filing any lawsuit in federal court.

In contrast, the 8th Circuit continues to rely on language in the Supreme Court's 1974 decision by stating, "the United States Supreme Court has held that the pursuit of a claim through grievance and binding arbitration under a (collective bargaining agreement) does not preclude a civil suit under Title VII ... and we believe the same reasoning applies to a plaintiff who has chosen not to participate in the grievance procedure."

According to the 8th Circuit, a union employee has an absolute right to adjudicate a Title VII claim in federal court as long as the jurisdictional prerequisites required for a Title VII case are satisfied.

Recently, the U.S. Supreme Court had an opportunity to address this issue again. In 1997, the 4th Circuit agreed with a district court's dismissal of a union employee's disability claim because the employee failed to pursue the arbitration procedure provided for in the collective bargaining agreement.

On appeal, in the case of Wright v. Universal Maritime Service Corporation, et al., the Supreme Court unanimously rejected the 4th Circuit's arguments and allowed the union employee to proceed with his ADA claim.

The Supreme Court's Nov. 16, 1998, decision acknowledged the different opinions to this issue since 1991, but vacated with the 4th Circuit's decision because there was not a sufficient waiver of the employee's discrimination claim within the collective bargaining agreement.

The Supreme Court concluded a collective bargaining agreement's provision to arbitrate union employees' statutory antidiscrimination claim must be "clear and unmistakable."

In appellate review, the court found the collective bargaining agreement did not contain explicit incorporation of a statutory antidiscrimination requirement and failed to contain clear and unmistakable waiver of such requirements in the arbitration clause.

However, the court did not express an opinion whether a collective bargaining agreement with clear and unmistakable language to arbitrate would be enforceable. Therefore, this decision may provide some guidance to employers and unions bargaining on a grievance and arbitration provision.

It does not completely resolve this issue and will have minimum impact on the 8th Circuit's (and Missouri federal courts') reluctance to require union employees to submit their employment discrimination claims to arbitration, even though a collective bargaining agreement may require it.

(Bob Lawson is an attorney with the firm of Blackwell Sanders Matheny Weary & Lombardi LLP in Springfield.)

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