Wednesday, September 27, 2023
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Employers Win Supreme Court Arbitration Ruling

(CN) - The U.S. Supreme Court upset precedent on Wednesday, voting 5-4 that provisions of union contracts requiring workers to arbitrate age-discrimination claims are enforceable.

The plaintiffs in the case are former night lobby watchmen and other workers hired to provide security services for a New York City office building owned by 14 Penn Plaza LLC. They are also members of the Service Employees International Union, Local 32BJ.

In August 2003, with the union's consent, the building owner hired Spartan Security, a unionized security services contract and affiliate of Temco Service Industries, the plaintiffs' direct employer, to staff the lobby and entrances to the building.

This displaced the original workers, causing Temco to reassign them to jobs they considered less desirable and lucrative.

The union filed grievances challenging the reassignments, but later withdrew its complaints from arbitration, saying it couldn't legitimately oppose the reassignments when it had approved the contract for new security personnel.

The workers filed suit in federal court in New York, alleging violations of the Age Discrimination in Employment Act (ADEA).

The building owner and other defendants moved to compel arbitration, but the district court denied their motion under a 2nd Circuit precedent stating that "even a clear and unmistakable union-negotiated waiver of a right to litigate certain federal and state statutory claims in a judicial forum is unenforceable."

The U.S. Supreme Court overturned this precedent.

"As 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," Justice Thomas wrote. "Courts generally may not interfere in this bargained-for exchange."

Thomas said the arbitration provision must be honored, unless the ADEA itself removes age-discrimination grievances from the National Labor Relation Act's "broad sweep."

Justices Stevens and Souter filed dissenting opinions, and Justices Stevens, Breyer and Ginsburg joined Souter's opinion.

Souter said the court should adhere to its 35-year precendent in Alexander v. Gardner-Denver Co., which held that "an individual's statutory right to freedom from discrimination and access to court for enforcement were beyond a union's power to waive."

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