14 Penn Plaza LLC v. Pyett

Decision Date01 April 2009
Docket NumberNo. 07–581.,07–581.
Citation556 U.S. 247,129 S.Ct. 1456,173 L.Ed.2d 398
Parties14 PENN PLAZA LLC et al., Petitioners, v. Steven PYETT et al.
CourtU.S. Supreme Court

Paul Salvatore, for Petitioners.

David C. Frederick, Washington, DC, for Respondents.

Curtis E. Gannon, for United States as amicus curiae, by special leave of the Court, supporting the respondents.

Paul Salvatore, Counsel of Record, Edward A. Brill, Charles S. Sims, Mark D. Harris, Brian S. Rauch, Ian C. Schaefer, Proskauer Rose LLP, New York, NY, for Petitioners.

James F. Berg, Howard Rothschild, Realty Advisory Board on Labor Relations, Inc., New York, NY, for Petitioner Temco Service Industries, Inc.

Jeffrey L. Kreisberg, Kreisberg & Maitland, LLP, New York, NY, Michael F. Sturley, Lynn E. Blais, Austin, TX, David C. Frederick, Counsel of Record, Derek T. Ho, Jennifer L. Peresie, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, DC, for Respondents.

Opinion

Justice THOMAS delivered the opinion of the Court.

The question presented by this case is whether a provision in a collective-bargaining agreement that clearly and unmistakably requires union members to arbitrate claims arising under the Age Discrimination in Employment Act of 1967 (ADEA), 81 Stat. 602, as amended, 29 U.S.C. § 621 et seq ., is enforceable. The United States Court of Appeals for the Second Circuit held that this Court's decision in Alexander v. Gardner–Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974), forbids enforcement of such arbitration provisions. We disagree and reverse the judgment of the Court of Appeals.

I

Respondents are members of the Service Employees International Union, Local 32BJ (Union). Under the National Labor Relations Act (NLRA), 49 Stat. 449, as amended, the Union is the exclusive bargaining representative of employees within the building-services industry in New York City, which includes building cleaners, porters, and doorpersons. See 29 U.S.C. § 159(a). In this role, the Union has exclusive authority to bargain on behalf of its members over their “rates of pay, wages, hours of employment, or other conditions of employment.” Ibid. Since the 1930's, the Union has engaged in industry-wide collective bargaining with the Realty Advisory Board on Labor Relations, Inc. (RAB), a multiemployer bargaining association for the New York City real-estate industry. The agreement between the Union and the RAB is embodied in their Collective Bargaining Agreement for Contractors and Building Owners (CBA). The CBA requires union members to submit all claims of employment discrimination to binding arbitration under the CBA's grievance and dispute resolution procedures:

§ 30 NO DISCRIMINATION. There shall be no discrimination against any present or future employee by reason of race, creed, color, age, disability, national origin, sex, union membership, or any other characteristic protected by law, including, but not limited to, claims made pursuant to Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the New York State Human Rights Law, the New York City Human Rights Code, ... or any other similar laws, rules, or regulations. All such claims shall be subject to the grievance and arbitration procedures (Articles V and VI) as the sole and exclusive remedy for violations. Arbitrators shall apply appropriate law in rendering decisions based upon claims of discrimination.” App. to Pet. for Cert. 48a.1

Petitioner 14 Penn Plaza LLC is a member of the RAB. It owns and operates the New York City office building where, prior to August 2003, respondents worked as night lobby watchmen and in other similar capacities. Respondents were directly employed by petitioner Temco Service Industries, Inc. (Temco), a maintenance service and cleaning contractor. In August 2003, with the Union's consent, 14 Penn Plaza engaged Spartan Security, a unionized security services contractor and affiliate of Temco, to provide licensed security guards to staff the lobby and entrances of its building. Because this rendered respondents' lobby services unnecessary, Temco reassigned them to jobs as night porters and light duty cleaners in other locations in the building. Respondents contend that these reassignments led to a loss in income, caused them emotional distress, and were otherwise less desirable than their former positions.

At respondents' request, the Union filed grievances challenging the reassignments. The grievances alleged that petitioners: (1) violated the CBA's ban on workplace discrimination by reassigning respondents on account of their age; (2) violated seniority rules by failing to promote one of the respondents to a handyman position; and (3) failed to equitably rotate overtime. After failing to obtain relief on any of these claims through the grievance process, the Union requested arbitration under the CBA.

After the initial arbitration hearing, the Union withdrew the first set of respondents' grievances—the age-discrimination claims—from arbitration. Because it had consented to the contract for new security personnel at 14 Penn Plaza, the Union believed that it could not legitimately object to respondents' reassignments as discriminatory. But the Union continued to arbitrate the seniority and overtime claims, and, after several hearings, the claims were denied.

In May 2004, while the arbitration was ongoing but after the Union withdrew the age-discrimination claims, respondents filed a complaint with the Equal Employment Opportunity Commission (EEOC) alleging that petitioners had violated their rights under the ADEA. Approximately one month later, the EEOC issued a Dismissal and Notice of Rights, which explained that the agency's ‘review of the evidence ... fail[ed] to indicate that a violation ha[d] occurred,’ and notified each respondent of his right to sue. Pyett v. Pennsylvania Building Co., 498 F.3d 88, 91 (C.A.2 2007).

Respondents thereafter filed suit against petitioners in the United States District Court for the Southern District of New York, alleging that their reassignment violated the ADEA and state and local laws prohibiting age discrimination.2 Petitioners filed a motion to compel arbitration of respondents' claims pursuant to § 3 and § 4 of the Federal Arbitration Act (FAA), 9 U.S.C. §§ 3, 4.3 The District Court denied the motion because under Second Circuit precedent, “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.” App. to Pet. for Cert. 21a. Respondents immediately appealed the ruling under § 16 of the FAA, which authorizes an interlocutory appeal of “an order ... refusing a stay of any action under section 3 of this title” or “denying a petition under section 4 of this title to order arbitration to proceed.” 9 U.S.C. §§ 16(a)(1)(A)-(B).

The Court of Appeals affirmed. 498 F.3d 88. According to the Court of Appeals, 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.” 498 F.3d, at 92, 91, n. 3 (citing Gardner–Denver, 415 U.S., at 49–51, 94 S.Ct. 1011). The Court of Appeals observed that the Gardner–Denver decision was in tension with this Court's more recent decision in Gilmer v. Interstate/Johnson Lane Corp.,

500 U.S. 20, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991), which “held that an individual employee who had agreed individually to waive his right to a federal forum could be compelled to arbitrate a federal age discrimination claim.” 498 F.3d, at 91, n. 3 (citing Gilmer, supra, at 33–35, 111 S.Ct. 1647; emphasis in original). The Court of Appeals also noted that this Court previously declined to resolve this tension in Wright v. Universal Maritime Service Corp., 525 U.S. 70, 82, 119 S.Ct. 391, 142 L.Ed.2d 361 (1998), where the waiver at issue was not “clear and unmistakable.” 498 F.3d, at 91, n. 3.

The Court of Appeals attempted to reconcile Gardner–Denver and Gilmer by holding that arbitration provisions in a collective-bargaining agreement, “which purport to waive employees' rights to a federal forum with respect to statutory claims, are unenforceable.” 498 F.3d, at 93–94. As a result, an individual employee would be free to choose compulsory arbitration under Gilmer, but a labor union could not collectively bargain for arbitration on behalf of its members. We granted certiorari, 552 U.S. 1178, 128 S.Ct. 1223, 170 L.Ed.2d 57 (2008), to address the issue left unresolved in Wright, which continues to divide the Courts of Appeals,4 and now reverse.

II
A

The NLRA governs federal labor-relations law. As permitted by that statute, respondents designated the Union as their “exclusive representativ [e] ... for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment.” 29 U.S.C. § 159(a). As the employees' exclusive bargaining representative, the Union “enjoys broad authority ... in the negotiation and administration of [the] collective bargaining contract.” Communications Workers v. Beck, 487 U.S. 735, 739, 108 S.Ct. 2641, 101 L.Ed.2d 634 (1988) (internal quotation marks omitted). But this broad authority “is accompanied by a responsibility of equal scope, the responsibility and duty of fair representation.” Humphrey v. Moore, 375 U.S. 335, 342, 84 S.Ct. 363, 11 L.Ed.2d 370 (1964). The employer has a corresponding duty under the NLRA to bargain in good faith “ with the representatives of his employees” on wages, hours, and conditions of employment.

29 U.S.C. § 158(a)(5) ; see also § 158(d).

In this instance, the Union and the RAB, negotiating on behalf of 14 Penn Plaza, collectively bargained in good faith and agreed that employment-related discrimination claims, including claims brought under the ADEA,...

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