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Union Arbitration Clause and Discrimination

March 3, 1999
The U. S. Supreme Court has ruled that an employee covered by a union contract with a general arbitration clause does not necessarily lose his right to bring a disability discrimination lawsuit in court. Wright v. Universal Maritime Service Corp., 159 LRRM 2769. To be effective, the Court says such a waiver of the right to sue in court must be "clear and unmistakable." In this case, the Court finds the union contract "does not contain a clear and unmistakable waiver of the covered employees’ rights to a judicial forum for federal claims of employment discrimination."

The union contract provided a grievance and arbitration procedure for all violations of the contract, and also stated that "no provision or part of this agreement shall be violative of any federal or state law." The Court finds no clear and unmistakable waiver in the agreement, as the Court says the contract specifically limits its grievance procedure to disputes related to the agreement, and the agreement did not provide provisions incorporating legal nondiscrimination provisions.

In a 1974 ruling, the Supreme Court held that an employee who had already lost an arbitration case under a union contract could still sue under Title VII, stating that an employee’s rights under Title VII could not be waived prospectively. In 1991, however, the court ruled that an employee with an individual arbitration agreement could not bring a discrimination case in court. The Supreme Court in the current case notes some tension between two lines of cases, but finds it unnecessary to resolve the question of the validity of a union-negotiated waiver of court claims since the Court concludes that "no such waiver has occurred." The Supreme Court thus leaves open the question of what, if anything, in a union contract it would consider a valid waiver of the right of individual employees to sue in court. At least one court has ruled that the union cannot waive or give up the employee’s right to sue in court, but the Supreme Court did not rely on this rationale in its ruling, and in other contexts the union can waive employee rights, such as the right to strike. Based upon the recent decision, however, it would seem that the union contract must authorize the arbitrator to resolve the federal statutory or discrimination claims, and possibly that the employees must be given the right to insist on arbitration if the federal statutory claim is not resolved to their satisfaction in the grievance process. It remains to be seen whether employers and unions will be willing to negotiate agreements that clearly state that employees may not bring legal claims in court, but instead may only use the grievance and arbitration procedure of the union contract for such claims.

Source: Wimberly, Lawson, Steckel, Nelson & Schneider, P.C., Atlanta, GA, January 1999. 404/365-0900.