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