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The employees in the case, 14 Penn Plaza LLC v. Pyett, were night watchmen in the defendant's building who alleged that they were given less desirable placement because they were over 50 years old.

They filed grievances under their collective bargaining agreement on a number of issues, including age discrimination. The CBA contained a mandatory arbitration clause that excluded other judicial remedies.

The union declined to pursue the age discrimination claim, and an arbitrator ruled against the employees on all remaining claims.

The employees then filed suit in federal court, alleging violation of the Age Discrimination in Employment Act.

A U.S. District Court denied the defendant's motion to dismiss, or in the alternative to compel arbitration, ruling that a CBA provision waiving employees' right to litigate certain statutory claims, including ADEA claims, is unenforceable.

The 2nd Circuit affirmed.

Paul Salvatore, a partner in the New York office of Proskauer Rose, represented the employer before the Court. He argued that the intent of the National Labor Relations Act was to give employers and unions broad authority in drafting collective bargaining agreements.

"Congress empowered unions to bargain on behalf of their employees over anything germane to the working environment," Salvatore argued. "The forum in which an ADEA claim is heard falls squarely in that authority [and ruling otherwise] will carve a judicial exception into the labor law [that defeats] Congress's national labor policy."

Justice Ruth Bader Ginsburg questioned whether upholding the arbitration provision would rob some workers of the right to seek redress when the union disagrees.

"So you are proposing, as far as I understand it, a situation where these workers would have no individual right at all if the union says, 'We won't represent you'?" Ginsburg asked.

"No," Salvatore said. "The clause requires all claims to be arbitrated, [which] means that the individuals then have to go to arbitration with their private counsel in this case and have their claims heard in the arbitral forum."

Justice Anthony Kennedy joined Ginsburg in probing the issue of whether employees had the right to individually seek arbitration of claims not pursued by the union, even after Salvatore noted the issue was not raised in the lower court.

"Whether or not it's properly raised [below] isn't it a factor that we must necessarily consider?" Kennedy asked.

After a lengthy discussion about whether the contract in question gave employees the right to seek individual redress if the union declined to proceed, Justice Antonin Scalia weighed in.

"I didn't think we took this case to determine the specific meaning of this particular contract, which is not an issue of national importance," he said.

No waiver authority

David Frederick, a partner in the Washington office of Kellogg, Huber, Hansen, Todd, Evans & Figel, represented the employees.

He argued that unions don't have the authority to waive workers' rights to sue under federal discrimination statutes, and that unions should not be given that authority since their interests don't always coincide with those of employees.

"There needs to be individual consent" by an employee for an ADEA waiver to be enforceable, Frederick argued. "Knowing and individual waiver is necessary before the person can waive substantive ADEA rights."

Justice Stephen Breyer pressed Frederick on why discrimination claims deserve protection from arbitration clauses when other claims – such as those involving dangerous machinery or other work hazards – can be the subject of arbitration.

"There are thousands, maybe tens of thousands, kinds of claims that people go to arbitration over," Breyer said to Frederick.

"I don't think that ruling in the workers' favor in this circumstance opens up any kind of Pandora's Box at all," Frederick replied.

Curtis E. Gannon, an assistant to the U.S. solicitor general arguing in support of the workers, took a stab at drawing the line between what the union can and cannot exercise control over.

"Statutory rights that are related to collective activity, and especially economic activity, are the kinds of things that are normally delegated to the union," Gannon said. "Those are the sorts of things that the union can actually engage in collective bargaining about. [But] if a statute is designed to give specific, minimum protection to individual workers, then that's the sort of thing that the union doesn't have the power to engage in collective bargaining over."

A decision from the Court is expected later this term.

Questions or comments can be directed to the writer at: kimberly.atkins@lawyersusaonline.com