Collective Bargaining Agreements are Ineffective in Forcing Arbitration of Employees' Statutory Discrimination Claims

Counterpoint

In 1991, the United States Supreme Court in Gilmer v. Interstate/Johnson Lane Corporation, 500 U.S. 20, 111 S. Ct. 1647, 114 L.Ed 2d 26 (1991) dismissed plaintiff’s Age Discrimination in Employment Act (“ADEA”) claim holding that under the Federal Arbitration Act, 9 U.S.C. Section 1, et seq., an employment contract containing an arbitration clause requiring all claims between plaintiff, Robert Gilmer (employee) and defendant Interstate/Johnson Lane Corporation (employer) is enforceable. Since Gilmer, many employers have attempted to extend the Supreme Court decision to Collective Bargaining Agreements (“CBAs”) only to be rebuffed by the vast majority of courts which considered the issue. See EEOC v. Board of Governors of State Colleges and Universities, 957 F.2d 424 (7th Cir.), cert. denied, 506 U.S. 906, 113 S. Ct. 299, 121 L.Ed. 2d 223 (1992); Bush v. Carrier Air Conditioning, 940 F. Supp. 1040 (E.D. Tex. 1996); DiPuccio v. United Parcel Service, 890 F. Supp. 688 (N.D. Ohio 1995); McGinnis v. Wonder Chemical Co., No. 95-4384, 1995 WL 756590 (E.D. Pa. Dec. 21, 1995); Griffith v. Keystone Steel and Wire Co., 858 F. Supp. 802 (C.D. Ill. 1994); Randolph v. Cooper Industries, 879 F. Supp. 518 (W.D. Pa. 1994); Block v. Art Iron, Inc., 866 F. Supp. 380 (N.D. Ind. 1994); Claps v. Moliterno Stone Sales, Inc., 819 F. Supp. 141 (D. Conn. 1993). Only the Fourth Circuit Court of Appeals in Austin v. Owens-Brockway Glass Container, Inc., cert. denied, 117 S. Ct. 432 (1996), has extended the decision to bar individual claimants from pursuing remedies in Court where a CBA contains an arbitration clause.

In rejecting the employer’s arguments, the Courts have distinguished Gilmer with the Supreme Court decision in Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 F. Supp. Ct. 1011, 39 LE 2d 147 (1974). In Gardner-Denver, the plaintiff was a member of the union which had negotiated a Collective Bargaining Agreement with the defendant employer. After the plaintiff was discharged from his job, he initiated the grievance procedure detailed in the CBA. Before the final, pre-arbitration step, plaintiff raised, for the first time, the claim of racial discrimination. Defendant rejected his claims and the matter went to arbitration. Before the arbitration hearing, plaintiff filed charges of racial discrimination with the Colorado Civil Rights Commission which referred the matter to the EEOC. The arbitrator, appointed under the CBA, ruled against plaintiff finding that he was discharged for cause.

After the arbitration, plaintiff received a right-to-sue letter from the EEOC. He filed a complaint in the federal court alleging that his discharge was racially motivated in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000(e), et seq. The district court and Court of Appeals for the Tenth Circuit dismissed the complaint holding that the plaintiff, by voluntarily choosing to pursue his grievance to final arbitration under the CBA, was precluded by suing his employer under Title VII.

The United States Supreme Court reversed holding that the arbitration clause of the CBA did not preclude plaintiff from pursuing his statutory claim under Title VII in a court of law. In its decision, the Supreme Court distinguished between the plaintiff’s contractual rights under the CBA and the statutory rights created by Congress. The Court held that the plaintiff’s contractual and statutory rights had distinct remedies and there would be no inconsistency in allowing each set of rights to be enforced in different forums. Consequently, plaintiff’s choice to pursue arbitration under the CBA did not preclude him from filing a lawsuit in federal court to enforce his Title VII rights.

In 1991, the United States Supreme Court was faced with a similar situation in the case of Gilmer v. Interstate/Johnson Lane Corporation, supra. In Gilmer, the plaintiff had been required by defendant to register as a securities representative with the New York Stock Exchange (“NYSE”). The application contained an agreement to arbitrate any dispute arising between him and the defendant under the rules of the NYSE. The NYSE required arbitration of controversies arising out of the employment or termination of employment of a registered representative.

Plaintiff was terminated. After his termination, he filed a charge with the EEOC alleging that he had been discharged in violation of the ADEA. Defendant requested the complaint be dismissed contending that any dispute between plaintiff and defendant had to be arbitrated under the rules of the NYSE. The district court denied the motion and the Court of Appeals for the Fourth Circuit reversed.

On appeal, the Supreme Court affirmed the Fourth Circuit holding that the case fell within the scope of the Federal Arbitration Act, 9 U.S.C. Section 1, et seq., which endorsed the “liberal federal policy favoring arbitration.” The Supreme Court found that the clause in the plaintiff’s registration application was broad enough to encompass statutory claims. Furthermore, the Court found that plaintiff had not demonstrated that Congress intended to preclude an individual from waiving a judicial forum for a statutory ADEA claim. Consequently, the Supreme Court found the arbitration clause enforceable.

In addition, the Gilmer Court repudiated the view enunciated in Gardner-Denver, that arbitration was inferior to the judicial process for resolving statutory claims. The Court stated, “[w]e are well past the time when judicial suspicion of the desirability of arbitration and of the competence of arbitral tribunals inhibited the development of arbitration as an alternative means of dispute resolution.” Id., 500 U.S. at 34 n. 5, 111 S. Ct. at 1656 n. 5.

However, the Gilmer Court distinguished its holding from Gardner-Denver. Unlike the plaintiff in Gardner-Denver, the plaintiff in Gilmer agreed in an individual employment contract to arbitrate a statutory claim. If he chose, the plaintiff in Gilmer could be represented by his own counsel at the arbitration hearing. In contrast, the plaintiff in Gardner-Denver never agreed to arbitrate a statutory claim. In fact, he never read the CBA. Consequently, he could not have agreed to be represented by a union representative at an arbitration proceeding which would decide if his individual statutory rights were violated.

In two recent cases, Nieves v. Individualized Shirts, 961 F. Supp. 782 (D.N.J. 1997) and Glickstein v. Neshaminy School District, No. 96-6236, 1997, U.S. Dist. LEXIS, 16317 (E.D. Pa. Oct. 22, 1997), the defendant employers, once again, tried to use the Gilmer case as a sword to prevent employees from pursuing judicial remedies for alleged statutory discrimination. Both times, the district court judges rejected the defendant employers’ arguments.

In Nieves, plaintiff was originally employed as cuff cutter, a job that required her to stand all day. She was a member of the Amalgamated Clothing and Textile Worker’s Union (“Union”) which had negotiated a CBA with her defendant employer. Plaintiff had no employment agreement with the defendant. Because of a medical condition, plaintiff left her job with defendant. One year later, she returned at a different position. Eventually, she returned to her job as a cuff cutter. Plaintiff worked until she took a medical leave in June, 1994, for corrective surgery. When she returned she was unable to work any longer as a cuff cutter. Since defendant did not have any light duty jobs available, plaintiff was terminated.

Plaintiff filed a complaint against the defendant with the New Jersey division on Civil Rights and EEOC alleging her termination violated the ADA. The EEOC eventually issued a right-to-sue letter. Plaintiff then sued defendant in the District Court for the District of New Jersey. Defendant responded by filing a motion for summary judgment contending, among other things, that the plaintiff’s ADA claim fell within the scope of the CBA’s arbitration and that her lawsuit should be dismissed because plaintiff failed to exhaust her remedies under the CBA before filing an action in federal court.

The court rejected defendant’s argument holding that the Gardner-Denver rule, rather than the Gilmer rule applied. In its opinion, the Court endorsed the Gardner-Denver rationale stating that plaintiff could not have waived her statutory rights under the CBA. Unlike an individual employment contract which can address both contractual and statutory rights, the Court found that a CBA, by its very nature, may only address the common, contractual rights of the members of the bargaining unit.

Furthermore, plaintiff’s failure to exhaust her remedies under the CBA was not relevant. Since the plaintiff’s ADA claims were not covered by the CBA, there was no need to initiate any grievance under the CBA. Consequently, plaintiff’s failure to exhaust the remedies under the CBA did not prevent her from asserting her ADA claims in federal court.

In Glickstein v. Neshaminy School District, supra., plaintiff brought a claim against various defendants alleging age and sex discrimination. At the time of her employment, plaintiff was a member of the Neshaminy Federation of Teachers (“Federation”) which contracted with the Neshaminy Board of School Directors. The CBA contained an anti-discrimination provision which barred any discrimination against any employee on the basis of race, creed, color, national origin, sex, age, place of residence, marital status, membership or participation in, or association with, the activities of any employee organization. The CBA also established a grievance procedure under which it defined a grievance as any complaint that there had been a violation, misinterpretation, inequitable or otherwise improper allegation of any provision of the agreement. A grievance procedure required a series of reviews within the school administration. If the employee was still dissatisfied, the employee could petition the Federation to bring the matter to arbitration. Both parties agreed to be bound by the award of the arbitrator.

Defendant argued that the Gilmer decision required plaintiff to arbitrate her Title VII claims under the CBA grievance procedure. The Court rejected defendant’s argument finding the defendant’s reliance on Austin v. Owens v. Brockway Glass Container, misplaced. The Court found particularly abhorrent the Fourth Circuit’s assertion in Austin that there was no meaningful distinction between an arbitration agreement negotiated by a union and one entered into individually by an employee. In its opinion, the Glickstein Court cited with favor the Austin dissent which warned of the potential for conflict of interest between the union and an individual where the union has sole discretion to enforce an employee’s right to arbitration. The Austin dissent found it especially harsh to compel arbitration based upon a clause in a document that an employee might never have reviewed. The Glickstein Court found it particularly offensive because plaintiff alleged that defendants influenced the Federation and caused it not to arbitrate her claim.

In summary, the recent decisions from the U.S. District Courts for the Eastern District of Pennsylvania and the District of New Jersey demonstrate a continuing unwillingness to extend Gilmer to arbitration clauses contained in a CBA. In contrast, both Courts expressed a willingness to enforce arbitration clauses if they are contained in an individual employment contract. Absent that set of circumstances, it does not appear than an employer’s attempt to compel an employee to arbitrate statutory claims such as Title VII, ADA, or ADEA will be successful.