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14 Penn Plaza LLC v. Pyett - 556 U.S. 247, 129 S. Ct. 1456 (2009)

Rule:

The Age Discrimination in Employment Act of 1967, 29 U.S.C.S. § 621 et seq., does not preclude arbitration of claims brought under the statute.

Facts:

Petitioner 14 Penn Plaza LLC ("Penn") was a member of a multi-employer bargaining association ("Association") for the New York City real-estate industry. Penn operated an office building where respondents Steven Pyett and others ("Workers") worked as night lobby watchmen and in other similar capacities. The Workers were employed directly by petitioner Temco Service Industries, Inc. ("Temco"), a maintenance service and cleaning contractor. The Workers were also members of the Service Employees International Union ("Union"). With the Union's consent, Penn engaged a unionized security services contractor, which was affiliated with Temco, to provide licensed security guards to staff the lobby and entrances of its building. Temco thereafter reassigned the Workers to jobs as night porters and light duty cleaners in the building. The Union and the Association, negotiating on behalf of Penn, collectively bargained and agreed that employment-related discrimination claims, including claims brought under the Age Discrimination in Employment Act of 1967 ("ADEA"), would be resolved in arbitration. Ultimately, the Workers filed a complaint with the Equal Employment Opportunity Commission ("EEOC") alleging that petitioners had violated their rights under the ADEA; the EEOC issued each of them a right-to-sue notice. The Workers filed a lawsuit in federal district court; petitioners filed a motion to compel arbitration of the age discrimination claims. The district court denied the motion. On appeal, the court of appeals affirmed, holding that the doctrine Alexander v. Gardner-Denver Co. forbade enforcement of collective-bargaining provisions requiring arbitration of ADEA claims. Petitioners were granted a writ of certiorari.

Issue:

Were collective-bargaining provisions requiring arbitration of ADEA claims enforceable?

Answer:

Yes.

Conclusion:

The Supreme Court of the United States reversed the court of appeals' decision and remanded the case for further proceedings. The Court held that a provision in a collective-bargaining agreement that clearly and unmistakably required union members to arbitrate ADEA claims was enforceable as a matter of federal law. In the case at bar, the Court observed, the Union and the Association, negotiating on behalf of Penn, collectively bargained in good faith and agreed that employment-related discrimination claims, including ADEA claims, would be resolved in arbitration. According to the Court, this freely negotiated contractual term easily qualified as a condition of employment subject to mandatory bargaining under the National Labor Relations Act. As in any contractual negotiation, a union may agree to the inclusion of an arbitration provision in a collective-bargaining agreement (CBA") in return for other concessions from the employer, and courts generally may not interfere in this bargained-for exchange. Accordingly, there was no legal basis for the Court to strike down the arbitration clause in the parties' CBA, which was freely negotiated by the Union and the Association, and which clearly and unmistakably required the Workers to arbitrate their ADEA claims.

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