April 16, 2009Client Alert

Labor Contracts May Bar Discrimination Suits

Grocery employers that have a contract with a union should check the contract language on grievances and arbitration. Your union employees may be prevented from pursuing discrimination claims against the company, other than through arbitration, under the union contract. In a recent decision by the U.S. Supreme Court, the Court held that a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA (age discrimination) claims is enforceable as a matter of federal law. The same conclusion is likely to apply to other types of discrimination claims, and may bar equivalent state claims from being pursued by employees outside of the grievance/arbitration procedures of the contract.

The case, 14 Penn Plaza LLC v. Pyett, decided this month, may change the dynamics of bringing and defending charges of discrimination in unionized workplaces. Employers may be able to take advantage of the Court’s decision by bargaining for provisions in collective bargaining agreements that require arbitration of discrimination claims. Such arbitration provisions should explicitly require arbitration of discrimination claims and refer to specific grievance and arbitration procedures that are also made part of the collective bargaining agreement.

Employers should be aware that a provision requiring discrimination claims to be arbitrated can increase an arbitrator's authority to evaluate the conduct of the employer in regard to discipline, firing, promotion, and other employment actions. Nevertheless, even without such a provision, arbitrators often consider discriminatory motives when making decisions about "just cause." The benefit of requiring employees to bring claims of discrimination through arbitration are many and include: shorter deadlines for filing claims; faster resolution; reduced damages; reduced or eliminated public attention to claims, which are not a public record; and opportunities to settle (which may impact other employees in the bargaining unit, such as by altering the decision as to which employee may be laid off or promoted).

To protect their public image, grocery employers should seriously consider whether current contracts restrict the filing of discrimination claims to the arbitration setting. If not, consideration should be given to bargaining such language into future contracts.

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