According to the Court’s opinion, one of the joint-employers owed an office building which engaged the other joint employer (a maintenance and cleaning service). The plaintiffs were employed as night watchmen. With the union’s consent, the building management replaced the other joint employer with a unionized security firm (affiliated with the joint employer) which could supply licensed security guards. Thus replaced, the plaintiffs were then reassigned to positions as night porters and light duty cleaners. They objected and filed a grievance under the CBA that the reassignments constituted, among other things, age discrimination and that they were denied seniority benefits and overtime.
The grievances proceeded to arbitration. However,
“[a]fter the initial arbitration hearing, the Union withdrew the first set of . . . grievances--the age-discrimination claims--from arbitration. Because it had consented to the contract for new security personnel [at the office building], the Union believed that it could not legitimately object to respondents' reassignments as discriminatory.”The plaintiffs then filed Charges with the EEOC alleging that their transfers had violated ADEA, but the EEOC dismissed the Charges as lacking substantiating evidence. With their right-to-sue letters in hand, the plaintiffs then filed suit in federal court and the employers moved to compel arbitration of their claims under the Federal Arbitration Act. The District Court refused to compel arbitration on the grounds that a union cannot waive the individual statutory rights of employees to pursue ADEA claims in a collective bargaining agreement. The Second Circuit Court of Appeals affirmed, stating that “it could not compel arbitration of the dispute because Gardner-Denver, which ‘remains good law,’ held ‘that a collective bargaining agreement could not waive covered workers' rights to a judicial forum for causes of action created by Congress.’”
The Court’s majority found that the union and employers
“collectively bargained in good faith and agreed that employment-related discrimination claims, including claims brought under the ADEA, would be resolved in arbitration. This freely negotiated term between the Union and the RAB easily qualifies as a ‘conditio[n] of employment’ that is subject to mandatory bargaining. . . . The decision to fashion a CBA to require arbitration of employment-discrimination claims is no different from the many other decisions made by parties in designing grievance machinery.”
Rejecting the argument that the union is not authorized to bargain away the employees’ statutory rights,
“[a]s in any contractual negotiation, a union may agree to the inclusion of an arbitration provision in a collective-bargaining agreement in return for other concessions from the employer. Courts generally may not interfere in this bargained-for exchange. ‘Judicial nullification of contractual concessions ... is contrary to what the Court has recognized as one of the fundamental policies of the National Labor Relations Act--freedom of contract.’"In that the ADEA does not preclude the arbitration of ADEA claims, there is nothing in the NLRA which precludes unions from negotiating that the employees’ future ADEA claims are subject to the grievance and arbitration provisions of the CBA.
“Examination of the two federal statutes at issue in this case, therefore, yields a straightforward answer to the question presented: The NLRA provided the Union and the [employers] with statutory authority to collectively bargain for arbitration of workplace discrimination claims, and Congress did not terminate that authority with respect to federal age-discrimination claims in the ADEA. Accordingly, there is no legal basis for the Court to strike down the arbitration clause in this CBA, which was freely negotiated by the Union and the [employers], and which clearly and unmistakably requires [plaintiffs] to arbitrate the age-discrimination claims at issue in this appeal. Congress has chosen to allow arbitration of ADEA claims. The Judiciary must respect that choice.”
In reaching this decision, the Court brushed off contrary language from Gardner-Denver, which indicated that union arbitrations – while suitable for contractual claims -- were not an appropriate forum for resolving discrimination claims and questioned the competence of arbitrators to decide federal statutory claims.
The Court also dismissed its earlier concerns in Gardner-Denver about the inherent conflict of interest between a union and its individual members.
“[I]n arbitration, as in the collective-bargaining process, a union may subordinate the interests of an individual employee to the collective interests of all employees in the bargaining unit. . . . ‘The union's interests and those of the individual employee are not always identical or even compatible. As a result, the union may present the employee's grievance less vigorously, or make different strategic choices, than would the employee.’”Nonetheless, the Court found that “there is ‘no reason to color the lens through which the arbitration clause is read’ simply because of an alleged conflict of interest between a union and its members.. . . . . This is a ‘battl[e] that should be fought among the political branches and the industry. Those parties should not seek to amend the statute by appeal to the Judicial Branch.’”
Moreover,
"‘[t]he conflict-of-interest argument also proves too much. Labor unions certainly balance the economic interests of some employees against the needs of the larger work force as they negotiate collective-bargain agreements and implement them on a daily basis. But this attribute of organized labor does not justify singling out an arbitration provision for disfavored treatment. This ‘principle of majority rule’ to which [the plaintiffs now] object is in fact the central premise of the NLRA. . . . In establishing a regime of majority rule, Congress sought to secure to all members of the unit the benefits of their collective strength and bargaining power, in full awareness that the superior strength of some individuals or groups might be subordinated to the interest of the majority." . . . It was Congress' verdict that the benefits of organized labor outweigh the sacrifice of individual liberty that this system necessarily demands. [The plaintiffs’] argument that they were deprived of the right to pursue their ADEA claims in federal court by a labor union with a conflict of interest is therefore unsustainable; it amounts to a collateral attack on the NLRA.”
In any event, the union members may sue the union directly for failing in their duty of fair representation or for its own age discrimination.
The ”NLRA has been interpreted to impose a "duty of fair representation" on labor unions, which a union breaches "when its conduct toward a member of the bargaining unit is arbitrary, discriminatory, or in bad faith. . . . This duty extends to "challenges leveled not only at a union's contract administration and enforcement efforts but at its negotiation activities as well. . . . Thus, a union is subject to liability under the NLRA if it illegally discriminates against older workers in either the formation or governance of the collective-bargaining agreement, such as by deciding not to pursue a grievance on behalf of one of its members for discriminatory reasons. In this case, the plaintiffs also had “brought a fair representation suit against the Union based on its withdrawal of support for their age-discrimination claims. . . . Given this avenue that Congress has made available to redress a union's violation of its duty to its members, it is particularly inappropriate to ask this Court to impose an artificial limitation on the collective-bargaining process.”
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