Record and brief — 14 Penn Plaza LLC, et al v. Steven Pyett, et al
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Jan 292008 Rey yf petitioners |4 Penn Plaza LLC. et al. filed. (Distnbuted)
Jan 30 2008 DISTRIBUTED tor Conterence of
Feb 19 2008 Petition GRANTED
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O$ Bret of petitioners 14 Penn Plaza LLC. et al filed
May 12 2008 Bret amicus curiae of Chamber of Commerce ot the United States
May 12 2008 Bnet amicus curiae of Equal Employment Advisory Council filed
Jul 3 2008 lhe time within which to file respondents’ bnet on the merits 1s further
extended to and including July 14. 2008
Jul 32008 Consent to the filing of amicus curiae briefs in support of either party o1
| eitl | party rece ,ed Irom ¢ yunsel for the respe ndents
Jul 102 ‘ Bret amicus cunae ot Service En pl vees International Lnion. Loca] 32B]
Jul 142 Ss Bnet ot respondents Steven Pvett. et a! filed
T
Jul 1S 2008 Bnet amicus curiae of National Right to Work Legal Defense Foundatior
Jul 18 2008 Bnet amici cunae of American Federation ot Labor and Congress of
Motion of the Acting Solicitor General tor leave to participate
rgument as amicus curiae and for divided argument GRANTED
SET FOR ARGUMENT ON Monday. December |. 2008
CIRCLLATED
\rgued For petitioners Paul Sa atore. New York. N.Y. For res} ndents
) i ( Freder ch Washit ul n. DC il d ( UTTIS E G annon. Assistant to
the Solicitor General. Department of Justice. Washington. D C_ (for United
States. as amicus curia
Guy
PETITION
FOR
WRIT OF
CERTIORARI
G L¥SS O Supreme Court US.
"\\ No. 07- 07-581 0CT 30 20?
is OFFICE OF THE CLERK
N TH
Supreme Court of the Wnited States
14 PENN PLAZA LLC and
TEMCO SERVICE INDUSTRIES, INC.,
Petitioners,
v
STEVEN PYETT, THOMAS O'CONNELL,
and MICHAEL PHILLIPS,
Respondents.
On PETITION FOR A Writ OF CERTIORARI TO THE
UNITED StaTeEs Court oF APPEALS
FOR THE SECOND CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
JAMES F: BERG Pau SALVATORE*
HowakD ROTHSCHILD Mark D. Harris
REALTY ADVISORY BoaRD ON LABOR BRIAN S. RAUCH
RELATIONS, INC. TAN C. SCHAEFER
292 Madison Avenue PROSKAUER Rose [LLP
New York, NY 10017 1585 Broadway
(212) 889-4100 New York, NY 10036
¢ 9 a
Counsel for Petitioner (212) 969-3000
Temco Service Industries, Ine. Counsel for Petitioner
14 Penn Plaza LLC
* Counsel of Record
211272 @
“OUNSEL PRESS
800) 274-4321 + (500) 349 6859
a
QUESTION PRESENTED
Is an arbitration clause contained in a collective
bargaining agreement, freely negotiated by a union and
an employer, which clearly and unmistakably waives the
union members’ right to a judicial forum for their
statutory discrimination claims, enforceable?
i1
LIST OF PARTIES
Pursuant to Rule 14.1(b), the only party appearing
before the U.S. Court of Appeals for the Second Circuit
whose name does not appear in the caption of the Petition
for a Writ of Certiorari is the Pennsylvania Building
Company.
CORPORATE DISCLOSURE STATEMENT
Pursuant to Rule 29.6, Petitioners state as follows:
14 Penn Plaza LLC has no parent corporation and
no publicly-held cerporation owns 10% or more of its
stock.
Temco Services Industries, Inc. is a publicly traded
company. It has no parent corporation and no publicly-
held corporation owns 10% or more of its stock.
til
TABLE OF CONTENTS
Page
EE bc i vo voswadvaseneesheetsws i
ET cs. tnnscweed abused awivedewensas ii
Corporate Disclosure Statement ............... ii
EE ks bv W sec deenkseeeecdatuces iii
ded cewadmas eats sae Vv
Table of Cited Authorities .................... vi
EE 9c ndinnd dened c0bsess ceeneubasle< l
Statement of Jurisdiction .................... l
Constitutional and Statutory. Provisions
ED Sa oddncdipan ckcsckontsseksuneneunes 1
ORIGINS GE CRO CBOE noone ccceecciccsccceescs 2
A. FUCUMG OGMBTOUMG 2. wn cc cc ccc cccceess 2
BD. PUCCRMGIII BGT og cccccvccccccccesss 6
Reasons for Granting the Petition ............. 9
I. There Is A Fundamental Conflict In The
Lower Courts Over The Enforceability Of
Union-Negotiated Waivers Of A Judicial
PE aGsantusenesske. (Nokeace cokes 10
iv
Contents
Page
A. This Court Has Acknowledged An
“Obvious[] ... Tension” In Its
Jurisprudence And Has Not Resolved
Tk -whnseaaeeadeusenedateodeniueviee 1]
B. The Lower Federal Courts are in
Irreconcilable and Acknowledged
SE AS avad eden éannceadehennsee 18
C. State Courts Are In Conflict With
oo eer ee 23
Il. Uncertainty About The Enforceability Of
Arbitration Agreements Creates Serious
og er er ere 25
A. The Adverse Effect on Employers,
Unions, and Unionized Employees ... 25
B. The Adverse Effect on Labor-
Management Relations. ............ 27
EEE ERE RDI oe Pe OE ee 29
Vv
TABLE OF APPENDICES
Appendix A — Opinion Of The United States
Court Of Appeals For The Second Circuit
DOSIGGS BME b, TOUT occ vccccccccsscccecs
Appendix B — Memorandum And Order Of The
United States District Court For The Southern
District Of New York Filed June 1, 2006.....
Appendix C — Opinion Of The United States
District Court For The Southern District Of
New York Filed February 22, 2006 ..........
Appendix D — Affidavit Of Larry Engelstein
Dated November 21, 2005 ..................
Appendix E — Excerpts From The 2005
Contractors Agreement ....................
Appendix F —9 U.S.C. §§3 &4 ..............
Appendix G — 29 U.S.C. §§ 621, 623(a),
DED cc cackveecsedsekden seein ene
vi
TABLE OF CITED AUTHORITIES
Page
CASES
Air Line Pilots Ass’n, Int'l
v. Northwest Airlines, Inc.,
211 F.3d 1312 (D.C. Cir.),
cert. denied, 121 S. Ct. 565 (2000) ........... 22
Air Line Pilots Ass’n, Int'l
v. Northwest Airlines, Inc.,
199 F.3d 477 (D.C. Cir. 1999) ............ 22, 27, 28
Albertson’s, Inc. v. United Food
& Commercial Workers Union,
157 F.3d 758 (9th Cir. 1998),
cert. denied, 528 U.S. 809 (1999) ............ 22, 25
Aleman v. Chugach Support Servs., Inc.,
485 F.3d 206 (4th Cir. 2007) ................. 21
Alexander v. Gardner-Denver Co.,
EE de cudénescceccecéocses se passim
Austin v. Owens-Brockway Glass Container, Inc.,
78 F.3d 875 (4th Cir.),
cert. denied, 519 U.S. 980 (1996) ... 9, 18, 19, 20, 22
Barrentine v. Arkansas-Best Freight Sys., Inc.,
eke <5 sabe eeReces ee cee 12
vii
Cited Authorities
Page
Bratten v. SST Servs., Inc.,
185 F:3d 625 (6th Cir. 1999) ................. 22, 24
Brisentine v. Stone & Webster Eng’g Corp.,
117 F.3d 619 (11th Cir. 1997) ............62.. 22
Brotherhood of R.R. Trainmen
v. Akron & Barberton Belt R.R. Co.,
385 F.2d 581 (D.C. Cir. 1967) ...........c000- 27
Brown v. ABF Freight Sys., Inc.,
183 F.3d 319 (4th Cir. 1999) .............0... 21
Carson v. Giant Food, Inc.,
175 F.3d 325 (4th Cir. 1999), :
cert. denied, 540 U.S. 1074 (2000) ........... 20
Circuit City Stores, Inc. v. Adams,
I oc det edinecumkunen 15
Collins v. New York City Transit Auth.,
- oy Bilt, ie 2 | re 16
E.. Associated Coal Corp. v. Massey,
373 F.3d 530 (4th Cir. 2004) .......... 220008. 20
FEOC v. Waffle House, Inc.,
gE ree 16
Garcia v. Bellmarc Prop. Mgmt.,
745 N.Y.S.2d 13 (App. Div. 2002) ............ 24
viii
Cited Authorities
Page
Gilmer v. Interstate/Johnson Lane Corp.,
Se EE tia cncnatnseedvandsnene passim
Granados v. Harvard Maintenance, Inc.
No. 05 Civ. 5489, 2006 U.S. Dist. LEXIS 6918
GRAS ED oc cccccccccscesesecss 1
Harrison v. Eddy Potash, Inc.,
112 F.3d 1437 (10th Cir. 1997) ............... 22
J.J. Case Co. v. NLRB,
ns oc nein neneeudneecens 27
Lewandowski v. Collins Bldg. Servs., Inc.,
Docket No. 104657/00
(Sup. Ct. N.Y. Co. Dec. 6, 2000) ............. 24
Marquez v. Screen Actors Guild,
EE cad sUbdventsdsceeseunes’s 16
Martin v. Dana Corp.,
114 F.3d 421 (3d Cir. 1997) .........0..20008. 22
Martin v. Dana Corp.,
135 F.3d 765 (3d Cir. 1997),
reported in full at 156 L.R.R.M. (BNA) 3137
Se SO I so cs od ekccececenecevas 23
Matthews v. Rollins Hudig Hail Co.,
72 F.3d 50 (7th Cir. 1995) .......... ccc c eee 17
ix
Cited Authorities
Page
McDonald v. West Branch,
ee ok cewncdcocnsddonesnceys 12
Metropolitan Edison Co. v. NLRB,
SEE Soebbucecusesssccccasecds 17
Minnick v. City of Middleburg Heights,
No. 81728, 2003 Ohio App. LEXIS 4569
Ge, BA BA Ts EE Poon vccsectccccesces 24
Moses H. Cone Mem’l Hosp. v. Mercury Constr.,
| RS Eye ee ree 13
NLRB v. Wooster Div. of Borg-Warner Corp.,
ED inet beuncdueneeneneases 27
Pryner v. Tractor Supply Co.,
109 F:3d 354 (7th Cir.),
cert. denied, S22 U.S. (1997) ..... ccc cccces 22
Rodriguez de Quijas
v. Shearson/American Express, Inc.,
KR ne er 12
Rogers v. New York Univ.,
220 F.3d 73 (2d Cir.),
cert. denied, 531 U.S. 1036 (2000) ....... 7, 8,9, 20
Safrit v. Cone Mills Corp..,
248 F.3d 306 (4th Cir.),
cert. denied, 534 U.S. 995 (2001) ............ 21
x
Cited Authorities
Seus v. John Nuveen & Co.,
146 F-3d 175 (8d Cir. 1998) .........
Singletary v. Enersys, Inc.,
57 F. Appx. 161 (4th Cir. 2003) .....
Sum v. Tishman Speyer Props., Inc.
Docket No. 11079-2005
(Sup. Ct. N.Y. Co. Dec. 2, 2005) ....
Vaca v. Sipes,
Be EOE COREE! se vccsvccsceses
Wilko v. Swan,
oe et ee
Wright v. Univ. Maritime Serv. Corp.,
PP RP DP CMEEED ccccccsncsececes
Yellow Freight Sys., Inc. v. Donnelly,
494 U.S. 820 (1990) ...............
Zavala v. Scott Bros. Datry, Inc.,
49 Cal. Rptr. 3d 503 (Ct. App. 2006)
Page
xi
Cited Authorities
Page
STATUTES AND OTHER AUTHORITIES
PEED ahs Cenddesesceevwesesd socesesates 1
ED. Sev chudeenesccdescdestvdsescusnns 7
9 U.S.C. § 4 eat iebeeueeseknusaueusseuses 7
—, & Serer ee l
EEE Shnectenckktsntsectssaccannes 1
EE nnws bneccecbsses bevseuceds 17
SPIE wabeebensdcuecenceeencesenees 12
N.Y.C. Admin. Code § 8-107 .................. 7
Fs ED pct veni.c st tb cvnctsessues 7
Civil Rights Act of 1991,
Pub. L. 102-166, 105 Stat. 1071 ............. 17
1
OPINIONS BELOW
The opinion of the United States Court of Appeals
for the Second Circuit is reported at 498 F.3d 88 (2d Cir.
2007). App. lz... The Second Circuit affirmed the decision
of the United States District Court for the Southern
District of New York, which is reported at 04 Civ. 7536,
2006 U.S. Dist. LEXIS 35952 (S.D.N.Y. June 1, 2006).
App. 13a. The District Court explained its reasoning in
its prior decision in Granados v. Harvard Maintenance,
Inc:, which is reported at No. 05 Civ. 5489 (NRB), 2006
U.S. Dist. LEXIS 6918 (S.D.N.Y. Feb. 22, 2006).
App. 23a.
STATEMENT OF JURISDICTION
The judgment of the Court of Appeals was entered
on August 1, 2007. App. la. The jurisdiction of this Court
is invoked under 28 U.S.C. § 1254(1).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
This case involves the application of the Federal
Arbitration Act (“AA”), 9 U.S.C. § 1, et seq.
Respondents filed this action pursuant to the Age
Discrimination in Employment Act of 1967 (“ADEA”),
29 U.S.C. §§ 621, et seg. The pertinent provisions of each
statute are reproduced at 49a-5la and 52a-66a.
2
STATEMENT OF THE CASE
This case presents an issue of exceptional
importance to organized labor, management, and union
members: whether, to achieve all the mutual benefits that
arbitration offers over litigation, a union can agree with
an employer to the arbitration of its members’ claims
under the ADEA and other statutes. This Court has
previously acknowledged that this question is undecided
under its precedents. See Wright v. Universal Maritime
Serv. Corp., 525 U.S. 70, 82 (1998).
In the decision below, the Second Circuit held that
no union-negotiated arbitration agreement — no matter
how clear and explicit —- is ever enforceable. The Fourth
Circuit, how~->r, has long held precisely the opposite,
routinely enforcing such clear and unmistakable
agreements. This conflict in the circuits — and between
state courts and federal courts - necessitates the
intervention of this Court to resolve the question.
A. Factual Background
1. For many decades, Local 32BJ of the Service
Employees International Union (“Local 32BJ” or the
“Union”), which represcnts over 85,000 employees
nationwide in the building services industry, and the
Realty Advisory Board on Labor Relations, Inc. (the
“RAB”), the New York City real estate industry’s multi-
employer bargaining association, have engaged in
industry-wide collective bargaining. Over this period, the
parties have agreed to, and continually have revised,
their Collective Bargaining Agreement for Contractors
(the “CBA”). Among other provisions, the CBA prohibits
3
discrimination in employment — an important goal for
labor, management, and employees in the “melting pot”
of the New York City labor market.
Beginning in 1999, the parties agreed to a CBA
provision that expressly requires employees to submit
any claims of employment discrimination, including
claims of age discrimination arising under federal, state,
and city law, to binding arbitration under the CBA’s
grievance and dispute resolution procedures.
The provision states:
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 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 procedure (Articles
V and V1) as the sole and exclusive remedy
for violations. Arbitrators shall apply
appropriate law in rendering decisions based
upon claims of discrimination.
App. 48a.'
' In addition to the CBA, the RAB negotiates and
administers several other collective bargaining agreements with
Local 32BJ and other unions, covering approximately 65,000
(Cont'd)
4
The bargaining parties specifically crafted this
language to track this Court’s requirement, set forth in
Wright, that any waiver of rights to adjudicate statutory
claims be “clear and unmistakable.” It is undisputed that
the CBA’s waiver is clear and unmistakable in its
language and intent. App. 6a, 21a, 37a-38a.
2. This arbitration provision was heavily negotiated
by Local 32BJ and the RAB. As part of the bargaining
leading to this clause, the Union gained sizable wage and
benefit enhancements, as well as other favorable
provisions. Furthermore, the arbitration provision itself
was advantageous to the Union and its members.
Without it, many of the Union-represented building
service workers would be compelled to become pro se
federal court plaintiffs to bring their discrimination
claims. This would be a daunting task for any individual,
but especially for the large percentage of immigrant
building service workers for whom English is their
second language. Similarly, those employees with the
means to retain an attorney would be required to pay
fees or a percentage of any award.
In contrast, under the arbitration provision, these
same employees receive a skilled attorney from the
Union at no cost to them, and are not required to pay
any administrative fees (7.e., arbitrator or forum fees),
(Cont'd)
employees and approximately 4,000 commercial and residential]
buildings in the New York City area. Those agreements contain
arbitration provisions that are virtually identical to the provision
at issue here and similarly require the arbitration of statutory
discrimination claims.
5
which are instead shared equally by the RAB and the
Union. If, for some reason, the employee would prefer
to retain private counsel, the Union permits the
employee to pursue the discrimination claims in the
arbitral forum with his or her attorney. App. 42a.
Arbitration of discrimination disputes is also
appealing to both Local 32BJ and New York City’s real
estate employers because it minimizes duplication of
efforts, and resolves disputes quickly, inexpensively,
fairly, and effectively. Most, if not all, discrimination
claims arise out of the same facts and circumstances as
contractual grievances alleging CBA violations.
For example, an employee asserting a claim of a
discharge without just cause (a contractua)] claim) can
also assert a claim of discriminatory discharge (a
statutory claim). Consolidating the process allows one
fact finder —- an employment attorney serving as
arbitrator — to consider the facts and circumstances that
encompass both claims, and make both determinations.
The ability to consolidate the actions results in economies
of scale for all parties involved, and ensures consistent
rulings on the related issues, while providing employees
and employers with the full scope of remedies and
defenses available under the anti-discrimination laws.
3. Respondents are employees and former
employees of Temco Service Industries, Inc. (“Temco”),
a building service and cleaning contractor. Prior to
August 2003, they worked as night watchmen/porters in
14 Penn Plaza LLC’s (the “Company”) commercial office
building located at 225 West 34th Street in New York
City. They are all members of Local 32BJ, covered under
the CBA with the RAB.
6
In or about August 2003, in an effort to improve
building security in response to post-9/11 security
concerns, the Company engaged Spartan Security, a
unionized security services contractor, to provide
trained, licensed security guards to staff the front lobby
desk and the rear entrance of the building. As a result,
Temco’s services were no longer needed in these
locations. In compliance with the CBA, Temco reassigned
Respondents to equivalent duties in other locations in
the building. Respondents were unhappy with these
reassignments and alleged, among other things, that
they violated the CBA and were based on age
discrimination.
B. Proceedings Below
Local 32BJ filed a grievance about the
reassignments under the CBA’s dispute resolution
procedures, raising both contractual and statutory
claims. Prior to the arbitration hearing, the portion of
the grievance alleging age discrimination was
withdrawn. Respondents (accompanied by their private
attorney, in addition to Union-provided counsel) did not
raise their age discrimination claims at any time during
the arbitration proceedings. After a four-day hearing,
the arbitrator denied all their contractual claims in a 19-
page opinion.
Despite the fact that their personal attorney was
present for the entire arbitration hearing and could have
raised their age discrimination claims before the
arbitrator, Respondents instead filed a lawsuit in federal
court alleging that their transfers violated federal, state,
7
and city laws prohibiting age discrimination.* The
Company moved to dismiss Respondents’ lawsuit or,
alternatively, to compel arbitration of their claims
pursuant to Sections 3 and 4 of the FAA (9 U.S.C. §§ 3
and 4), based on the clear agreement to arbitrate such
claims contained in the CBA. The district court denied
the motion to compel arbitration based on its own recent
decision in another case, where it recognized that “the
Supreme Court has not spoken clearly on this issue,”
but held that it was “constrained” to follow the Second
Circuit’s precedents and judicially void the arbitration
provision. App. 39a n.7.
On appeal, the Second Circuit likewise acknowledged
that this Court’s precedents left unresolved the central
question. Indeed, as it noted, those precedents are
themselves in “tension,” and other circuits have reached
different conclusions. App. 6a n.3, 10a n.4. But it
considered itself bound by its earlier decision in Rogers
v. New York Univ., 220 F.3d 73 (2d Cir.) (per curiam),
cert. denied, 531 U.S. 1036 (2000), that held such
agreements unenforceable.
Rogers involved a collective bargaining agreement
that — unlike the CBA - did not clearly incorporate
statutory claims. The court found that it did not meet
Wright’s “clear and unmistakable” test, and was not
* Respondents filed these claims under the ADFA, the New
York State Human Rights Law, N.Y. Exec. Law § 290, et seq.,
and the New York City Administrative Code, N.Y.C. Admin. Code
§ 8-107. In a separate, related action, Respondents also alleged
a violation of the duty of fair representation against the Union,
inter alia, for failing to arbitrate the age discrimination claims,
but subsequently withdrew that action with prejudice.
8
enforceable for that reason. But Rogers went on to hold,
as an alternate ground, that even a clear arbitration
provision was not “always enforceable.” Jd. at 75. In
Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974),
another case in which the arbitration clause of the
collective bargaining agreement between a company and
a union did not cover statutory anti-discrimination
claims, this Court held that the clause could not preclude
later assertions of such claims in a judicial forum. From
Gardner-Denver’s narrow holding (which Rogers
recognized was narrowed further in later cases, see 220
F.3d at 75), Rogers inferred that any collective
bargaining agreement clause negotiated by a union could
not bar the employees’ right to a judicial forum — whether
the parties had deliberately negotiated such a waiver or
not.
Rogers acknowledged, as did the decision below, that
this blanket negation of any and all arbitration clauses
did not square with later Supreme Court precedents,
which “could be taken to suggest that, under certain
circumstances, a union negotiated waiver of an
employee's statutory right to a judicial forum might be
enforceable.” App. 9a-lla (quotations omitted). But
neither Second Circuit decision offered any account of
what those circumstances might be.
Indeed, it is clear that under the Second Circuit’s
holdings, there is no situation — however clear the
language in the collective bargaining agreement — that
would make such an arbitration agreement binding. Nor
did either decision take serious account of this Court’s
ruling in Gilmer v. Interstate/Johnson Lane Corp., 500
U.S. 20 (1991), which upheld an agreement to arbitrate
9
entered into by an individual employee, and
distinguished earlier cases that were not governed by
the FAA (as this one is), and where there was no “clear
and unmistakable” arbitration provision (as there is
here).
Rogers noted that the Fourth Circuit had rejected
its conclusion — acknowledging the conflict between the
circuits. See 220 F.3d at 75 (citing Austin v. Owens-
Brockway Glass Container, 78 F.3d 875, 880-86 (4th Cir.),
cert. denied, 519 U.S. 980 (1996)). The decision below
did the same, see App. 10a n.4, but adhered to its own
view that “nothing had changed” in the law since Rogers
was decided. /d. at lla.
REASONS FOR GRANTING THE PETITION
This Conrt has recognized that there is an
unresolved conflict in its own jurisprudence concerning
the enforceability of union-negotiated arbitration
agreements. An older line of precedent beginning with
Gardner-Denver viewed arbitration unfavorably and
held that an arbitration proceeding cannot preclude the
assertion of statutory claims in a judicial forum. A more
recent line of precedent, typified by Gilmer, takes a far
more positive view of arbitration and holds that
arbitration provisions are enforceable so long as their
forum selection language is “clear and unmistakable.”
This uncertainty has generated a marked conflict in the
federal circuits, and between federal and state courts,
leading some to hold that union-negotiated arbitration
clauses are never enforceable, and others to hold that
they are enforceable if the waiver language is clear. That
conflict provides a powerful reason for this Court to
grant review.
10
The conflict also creates a host of public policy
concerns. First, neither employers nor unions are able
to know or predict whether their particular provision is
valid, making both the bargaining and administration of
multi-jurisdictional collective bargaining agreements
exceedingly difficult. Second, unionized employees
working in jurisdictions that do not enforce union-
negotiated arbitration clauses may be induced to sign
individual waivers as a condition of continued
employment — effectively removing unions from the
negotiation of an important term and condition of
employment. In sum, for effective employer and union
operations, for productive collective bargaining, and to
protect the rights of employees who are union members,
there must be a consistent rule of law for the entire
country — and that rule only can come from this Court.
I. THERE IS A FUNDAMENTAL CONFLICT IN
THE LOWER COURTS OVER THE ENFORCE-
ABILITY OF UNION-NEGOTIATED WAIVERS
OF A JUDICIAL FORUM.
There is a pressing need for this Court to clarify the
circumstances under which a union-negotiated
arbitration agreement may be enforced. Until now, Wiis
Court has expressly declined to answer that question.
As aresult, the lower federal and state courts have been
forced to rely on conflicting precedents, resulting in
diametrically opposite conclusions.
1]
A. This Court Has Acknowledged An “Obvious[ ]
... Tension” In Its Jurisprudence And Has Not
Resolved It.
The Second Circuit held that union-negotiated
arbitration agreements are not enforceable based on this
Court’s 1974 decision in Gardner-Denver. The issue,
Petitioners respectfully submit, cannot be so rotely
resolved — as this Court itself has acknowledged.
In Wright, the Court recognized that whether a
collective bargaining agreement can waive employees’
statutory rights to a judicial forum calls into question
“two lines” of its own cases that are “obviously [in] some
tension.” Wright, 525 U.S. at 76. Wright deferred
resolution of that question because it found the particular
language in the collective bargaining agreement there
too vague and unspecific to constitute a waiver of rights.
See id. at 77, 80. Since the instant CBA was specifically
drafted to track Wright’s “clear and unmistakable”
requirement, and the district court found that it was clear
and unmistakable, App. 2la, the issue is squarely
presented here.
According to Wright, the Gardner-Denver line of
cases concerns the preclusive effect of prior contractual
erbitrations on an employee’s right to litigate certain
related statutory claims. In Gardner-Denver, the Court
addressed the question of whether an employee whose
grievance had been arbitrated pursuant to a general
grievance and arbitration provision in a collective
bargaining agreement was subsequently barred from
instituting a Title VII court action. The Court held that
a general contractual grievance arbitration proceeding
12
does not bar a subsequent related Title VII federal court
action. In other words, a contract arbitration is not res
judicata to a Title VII litigation. The Court applied this
principle in later cases to permit similar post-arbitration
litigation under other statutes. See Barrentine v.
Arkansas-Best Freight Sys., Inc., 450 U.S. 728 (1981)
(Fair Labor Standards Act); McDonald v. West Branch,
466 U.S. 284 (1984) (42 U.S.C. § 1983).
Gardner-Denver dealt with a purely contractual
arbitration process, where the arbitrator sat only as “the
proctor of the bargain.” 415 U.S. at 53. The arbitrator
was not able to re'y on external law, and thereby was
foreclosed from adjudicating statutory employment
claims. The Gardner-Denver Court expressed the now-
rejected view that the arbitral fact-finding process is not
comparable to judicial fact-finding, and that the
“informal” nature of arbitrations rendered them
inappropriate for the resolution of Title VII claims.
Id. at 57-58 (citing Wilko v. Swan, 346 U.S. 427 (1953)).
But in the thirty years since, the Court has disavowed
this antiquated view of arbitral inferiority. See Rodriguez
de Quijas v. Shearson/American Express, Inc., 490 U.S.
477 (1989); Gilmer, 500 U.S. 20 (1991).
According to Wright, the other relevant line of cases
involves individual agreements to arbitrate employment
disputes. In Gilmer, the Court required an individual
non-unionized plaintiff to arbitrate his claim under the
ADEA because he had signed a securities industry
registration agreement consenting to arbitrate any
claims arising out of his employment. /d. at 35. The Court
emphasized that “questions of arbitrability must be
addressed with a healthy regard for the federal policy
13
favoring arbitration.” Jd. at 26 (quoting Moses H. Cone
Mem’! Hosp. v. Mercury Constr., 60 U.S. 1 (1983)).
It held that arbitration of, and hence waiver of the right
to proceed in court with respect to, statutory
discrimination claims was not “inconsistent with the
statutory framework and purposes of the ADEA.”
Gilmer, 500 U.S. at 27. In so doing, it rejected old-
fashioned notions that arbitration suffers from tribunal
bias, insufficient discovery procedures, and inadequate
remedies. Specifically, the Court stated that “[w]e are
well past the time when judicial suspicion of the
desirability of arbitration and of the competence of
arbitral tribunals inhibited the development of
arbitration as an alternative means of dispute
resolution.” Jd. at 34.
In Wright itself, when this Court faced the question
whether union-negotiated waivers of employees’ rights
to a judicial forum are enforceable, it acknowledged that
Gardner-Denver and Gilmer are in tension — for Gilmer
allowed waivers of rights under anti-discrimination
statutes that Gardner-Denver had stated were
unwaivable by anyone. Wright, 525 U.S. at 76-77.
Moreover, the Court itself adverted to the change in its
own receptivity to arbitration, with Gilmer being a
prominent example. Jd. Nonetheless, the Wright Court
left this conflict unresolved, and decided the case before
it on a different, narrower ground. /d.
In the absence of further guidance from this Court,
the Second Circuit plainly erred in relying on Gardzer-
Denver rather than Gilmer. Gilmer drew three
distinctions between itself and the Gardner-Denver l\ine
14
of cases, all of which made it, not Gardner-Denver,
controlling here. First and foremost, in Gardner-Denver,
the union and the company could arbitrate only
contractual grievances, as they had no agreement to
arbitrate statutory claims. In fact, the arbitrator did not
even have the authority to resolve such claims, being
only a “proctor of the [collective bargaining agreement)].”
Gardner-Denver, 415 U.S. at 53. Thus, the only question
presented in that case (and its progeny) was whether
arbitration of the employee’s contract-based claims
would be held to preclude later statutory discrimination
actions arising out of the same facts. See Gilmer, 500
U.S. at 48. Under those circumstances, Gardner-Denver
correctly held that there was no preclusion.
Here, in stark contrast, there is an agreement that
expressly requires arbitration of any and all statutory
claims, and the legally-trained arbitrators are
empowered (and, indeed, obligated) to decide such claims
“applyling] appropriate law.” App. 48a. The question,
therefore, is one of enforceability of forum selection
clauses, not preclusion.
Second, Gilmer emphasized the fact that unlike
Gardner-Denver, it was decided under the FAA.
See Gilmer, 500 U.S. at 35. The FAA was enacted to place
arbitration agreements upon the same footing as other
commercial contacts. To that end, it provides for stays
of proceedings in federal courts when an issue is
referable to arbitration, zd. § 3, and for orders compelling
arbitration when one party has failed, neglected, or
refused to comply with an arbitration agreement,
id. § 4. In finding that the employee’s ADEA claims
should be compelled to arbitration, Gilmer cited to a
litany of decisions by this Court holding that by agreeing
15
to arbitrate a statutory claim, a party does not forgo any
substantive rights afforded by the statute. /d. This Court
has since further bolstered support for arbitration of
statutory discrimination claims in Circuit City Stores,
Inc. v. Adams, 532 U.S. 105 (2001), holding that
agreements to arbitrate employment disputes are fully
enforceable pursuant to the FAA. After Circuit City, it
is clear that clauses like the instant one are best treated
under the FAA, as the decision below understood.
Finally, as a third distinction between itself and
Gardner-Den»ver, Gilmer explained that since the
arbitration in Gardner-Denver arose in the context of a
collective bargaining agreement, where the claimant was
represented by his union, that case presented a “tension
between collective representation and individual
statutory rights.” Gilmer, 500 U.S. at 35. The decision
below echoed the same concern, that if “the Union
refused to submit the wrongful transfer claims to
arbitration because the Union had agreed to the new
contract, the interests of the Union and the interests of
[Respondents] are clearly in conflict.” App. lla n.5.
But the Second Circuit ignored a critical distinction
between the agreement at issue in Gardner-Denver and
the CBA: under the CBA, Respondents retained at all
times the right to bring their statutory claims to
arbitration on their own - without the need for Union
consent. App. 42a. Hence, Respondents enjoyed the same
access to the arbitration process as the non-union
employees in Gilmer, in which arbitration was upheld.
Moreover, in the thirty years since Gardner-Denver,
other judicial protections of the individual union member
16
have developed. First, an employee who believes the
union acted unfairly (in not processing, or improperly
handling, a discrimination claim) can bring a duty of fair
representation action against it. See Marquez v. Screen
Actors Guild, 525 U.S. 33, 44 (1998); Vaca v. Sipes, 386
U.S. 171, 190 (1967).* Similarly, in those relatively rare
cases where a union member may wish to challenge the
fairness of the arbitration process, courts are empowered
to determine whether the process was in fact fair, and
whether the decision was rendered by a neutral,
unbiased adjudicator. See Collins v. New York City
Transit Auth., 305 F.3d 113, 119 (2d Cir. 2002). Finally,
under existing law, an agreement to arbitrate statutory
discrimination claims by an employee does not waive an
employee’s right to file a charge of discrimination with
the Equal Employment Opportunity Commission
(EEOC), and does not prohibit the EEOC from
commencing a lawsuit in response to the charge.
See EEOC v. Waffle House, Inc. , 534 U.S. 279 (2002).
In addition to disregarding these critical distinctions,
placing the instant case closer to Gilmer than to
Gardner-Denver, the Second Circuit simply failed to
appreciate that Gilmer and its progeny have undermined
Gardner-Denver’s precedential weight. One of Gardner-
Denver's animating reasons for opposing arbitration
agreements was its view that “there can be no
prospective waiver of an employee’s rights under Title
VII.” /d. at 51. Gilmer flatly rejected this principle,
holding that arbitration of (and hence waiver of a judicial
forum regarding) statutory discrimination claims was
not inconsistent with the framework and purposes of the
anti-discrimination laws. See Gilmer, 500 U.S. at 27.
* Indeed, Respondents brought such a claim here, but then
withdrew it. See note 2 supra.
17
In particular, the ADEA directs the EEOC to pursue
“informal methods of conciliation, conference, and
persuasion” in its enforcement procedures. 29 U.S.C.
§ 626(b). Congress’ grant of concurrent jurisdiction over
ADEA claims to state and federal courts also evidences
an objective of allowing multiple fora for resolving
disputes. Gilmer, 500 U.S. at 30. Finally, Congress has
never explicitly precluded arbitration of ADEA claims.‘
For all these reasons, arbitration of age discrimination
claims is not only permissible, but encouraged.
As to union-negotiated waivers in particular,
Gardner-Denver stated that a union cannot waive
individual employee rights, but only “certain statutory
rights related to collective activity,” 415 U.S. at 51. That
view was subsequently called into question by the Court’s
decision in Metropolitan Edison Co. v. NLRB, 460 U.S.
693, 706-07 (1983), which held that a union can waive an
individual employee’s right under the National Labor
Relations Act to be free of discrimination based on union
activity. The Court decided that as long as the union-
negotiated waiver is “clear and unmistakable,” it would
be enforced. Not coincidentally, this is the same standard
the Wright Court used to evaluate union-negotiated
arbitration agreements.
‘ Indeed, in further support of arbitration, Congress passed
the Civil Rights Act of 199' which provided that “the use of
alternative dispute resolution, including ... arbitration, is
encouraged to resolve disputes arising under [Title VII and the
ADEA\|.” Pub. L. 102-166, § 118, 105 Stat. 1071, 1081 (reprinted
in notes to 42 U.S.C. § 1981). On its face, Section 118 evinces a
clear Congressional intent to encourage arbitration of ADEA
claims, not to preclude such arbitration. See Seus v. John Nuveen
& Co., 146 F.3d 175, 182 (3d Cir. 1998); Matthews v. Rollins Hudig
Hall Co., 72 F.3d 50, 54 n.4 (7th Cir. 1995).
18
At a more fundamental level, decisions after
Gardner-Denver rejected its idea that the right te a
judicial forum was a substantive right. As Gilmer held,
“by agreeing to arbitrate a statutory claim, a party does
not forgo the substantive rights afforded by the statute;
it only submits to their resolution in an arbitral, rather
than a judicial forum.” Gilmer, 500 U.S. at 26. For that
reason, and the others expressed above, much of the
underlying motivation for Gardner-Denver’s hostility to
arbitration has simply faded away as the law has evolved
over the last thirty years.
B. The Lower Federal Courts are in
Irreconcilable and Acknowledged Conflict.
The decision below directly and irreconcilably
conflicts with the Fourth Circuit’s rulings that union-
negotiated arbitration agreements are enforceable. The
Fourth Circuit has been steadfast in its position, both
pre- and post-Wright, applying the rationale of Gilmer
rather than Gardner-Denver to collective bargaining
agreements. The ;sidance and drafting instructions
detailed in its decisions have become a primer for labor-
relations practice throughout the country.
Even before Wright, the Fourth Circuit definitively
ruled that union-negotiated waivers of an individual’s
right to proceed in a judicial forum for statutory
discrimination claims are enforceable. In Austin v.
Owens-Brockway Glass Container, Inc. , 78 F.3d 875 (4th
Cir.), cert. denied, 519 U.S. 980 (1996), the Fourth Circuit
determined that Gardner-Denver could not survive
Gilmer. Reasoning that Gilmer “recognized that
19
arbitration of a statutory claim is not equal to giving up
any right under a statute, [but] simply another forum in
which to resolve the dispute,” id., the Fourth Circuit held
that Gilmer had rejected the principal basis of Gardner-
Denver, that “arbitration is an inappropriate forum for
the resolution of [anti-discrimination] statutory [rights].
...” Id. Following Gilmer, Austin noted that there was
no evidence of a Congressional intent to prohibit
arbitration of these matters, and therefore no reason to
block enforcement of such an agreement. Jd. at 880-81.
The Fourth Circuit’s decision was grounded in the
recognition that the mechanism for resolving
employment disputes is a natural and appropriate
subject of collective bargaining, and one over which a
union — as the exclusive bargaining representative of its
membership — has “the right and duty” to negotiate.
As the court observed, the right to arbitrate is as much
a term and condition of employment as any other
protected by statute. Jd. at 885. Waivers of such rights
are effective because they rest on the premise of fair
representation through the union.
Accordingly, the Fourth Circuit drew no distinction
between the individual agreement to arbitrate upheld
in Gilmer and the union-negotiated arbitration
agreement at issue in Austin. The court held:
Whether the dispute arises under a contract
of employment growing out of securities
registration application, a simple employment
contract, or a collective bargaining agreement,
an agreement has yet been made to arbitrate
20
the dispute. So long as the agreement is
voluntary, it is valid, and we are of the opinion
it should be enforced.
Id. The Fourth Circuit thus rejected the precise grounds
on which the Second Circuit rested its decision. To the
Second Circuit, the identity of the party negotiating the
waiver is determinative of whether the waiver is valid.
Rogers, 220 F.3d at 75. To the contrary, Austin announced
a uniform policy — so long as the agreement to waive a
judicial forum was made voluntarily, in¢cividual
agreements and collectively-bargained agreemeuts are
equally valid. Austin, 78 F.3d at 885.
In later cases, the Fourth Circuit has fortified and
elaborated on its Austin holding, articulating the precise
circumstances under which union-negotiated arbitration
clauses are enforceable. In Carson v. Giant Food, Inc.,
175 F.3d 325, 331 (4th Cir. 1999) (Wilkinson, J.), cert.
denied, 540 U.S. 1074 (2000), the Fourth Circuit found
two ways to meet Wright’s “clear and unmistakable” test:
one, by drafting an explicit arbitration clause whereby
employees agree to submit to arbitration all federal
causes of action arising out of their employment; and
the other, by explicitly incorporating statutory anti-
discrimination requirements elsewhere in the contract.
This explicit drafting advice signals the court’s
continuing commitment to the enforcement of such
agreements. See, e.g., EF. Associated Coal Corp. v.
Massey, 373 F.3d 530, 533 (4th Cir. 2004) (“We have
consistently held that a union-negotiated CBA may waive
an employee’s statutory right to litigate his employment
discrimination claims in a judicial forum.”); Singletary
v. Enersys, Inc., 57 F. Appx. 161 (4th Cir. 2003);
21
Brown v. ABF Freight Sys., Inc., 183 F.3d 319, 321 (4th
Cir. 1999) (Luttig, J.).°
In its most recent decision on point, Aleman v.
Chugach Support Servs., Inc., 485 F.3d 206, 215 (4th Cir.
2007) (Wilkinson, J.), the Fourth Circuit went so far as
to describe the method of dispute resolution as a
“preeminent” term and condition of employment as to
which unions were entitled to strike bargains. /d. at 216.
It expressly rejected the idea that there was any
statutory basis or precedent for inventing a rule that
clear and unmistakable waivers require a “meeting of
the minds” between the employer and individual union
members. Indeed, it commented that to hold that
Congress had placed the resolution of civil rights claims
beyond the reach of arbitration “would be too much an
exercise in judicial implication” — an exercise that would
“change the nature of collective bargaining over
conditions of employment and ... read judicial
exceptions into the National Labor Relations Act.” /d.
at 216-217. See also Safrit v. Cone Mills Corp., 248 F.3d
306, 308-09 (4th Cir.), cert. denied, 534 U.S. 995 (2001)
(“[A]n agreement to arbitrate statutory claims is part
of the natural tradeoff that a union must make in
exchange for other benefits. ... To redact one clause
from a CBA would in effect alter the agreement reached
during the often-difficult collective bargaining
process.”).
Despite the sea change in this Court’s jurisprudence
in the thirty years since Gardner-Denver, and the Fourth
Circuit’s insightful and practical holdings, most other
* The CBA clause at issue here incorporates both concepts
in evincing its clear and unmistakable waiver. App. 43a-48a.
22
circuits that have addressed the issue have aligned
themselves with the Second Circuit — albeit while
expressing uncertainty about the state of the law. See
Air Line Pilots Ass’n, Int'l v. Northwest Airlines, Inc.,
211 F.3d 1312 (D.C. Cir.) (en banc) (per curiam),
reinstating 199 F.3d 477, 484 (D.C. Cir. 1999) (“Whatever
the Supreme Court said — or more precisely, refrained
from saying — in Wright, we do not understand the Court
in Gilmer to have overruled Gardner-Denver. We
therefore leave to the Court itself the prerogative of
overruling its own precedent (if it will); we apply the
law as it stands.’’), cert. denied, 121 S. Ct. 565 (2000);
Pryner v. Tractor Supply Co., 109 F.3d 354, 365 (7th Cir.)
(Posner, J.) (acknowledging a “circuit split” and stating
that “[o]n balance our case is closer to Alexander; but is
enough left of Alexander to compel a decision in favor of
plaintiff?”), cert. denied, 522 U.S. (1997); Bratten v. SSI
Servs., Inc., 185 F.3d 625 (6th Cir. 1999) (holding,
anomalously, that this Court’s decision in Wright
“implicitly overruled” the Fourth Circuit’s holding ir
Austin); Albertson’s Inc. v. United Food & Commercial
Workers Union, 157 F.3d 758 (9th Cir. 1998), cert. denied,
528 U.S. 809 (1999); Harrison v. ¥ddy Potash, Inc., 112
F.3d 1437, 1453-54 (10th Cir. 19$%) (following Gardner-
Denver); Brisentine v. Stone & Webster Eng’g Corp., 117
F.3d 519, 526 (11th Cir. 1997) (same).
The Third Circuit is a likely exception. In Martin v.
Dana Corp., 114 F.3d 421 (3d Cir. 1997), a divided panel
agreed with Austin that a union-negotiated arbitration
clause could supplant an individual worker’s right to a
judicial forum. The en banc court vacated that opinion
and referred the case back to the panel to determine
whether the plaintiff could arbitrate without the
23
assistance of the union. After determining that the
agreement in that case did not grant that right, the
original panel reversed its decision, ruling that the
collective bargaining agreement did not bar the
plaintiff’s suit. See Martin v. Dana Corp., 135 F.3d 765
(3d Cir. 1997), reported in full at 156 L.R.R.M. (BNA)
3137 (3d Cir. Dec. 16, 1997). Because the issue of the
claimant’s right to arbitrate without the consent of the
union was “the sole issue ... upon which [the] appeal
turn[ed],” id. at *2, it appears that the Third Circuit
would uphold the CBA here, as Local 32BJ union
members have the right to bring their own attorneys
into the arbitral forum. App. 42a.
In sum, the lower federal courts are in irreconcilable
conflict over whether a union-negotiated arbitration
clause may be enforceable. In addition to the sharp split
between the positions of the Second and Fourth Circuit,
other circuits have expressed deep-seated confusion
regarding the enforceability of these waivers. Even
courts that continue to apply Gardner-Denver do so while
questioning its continued viability. This Court’s review
is needed to resolve the conflict.
C. State Courts Are In Conflict With Federal
Courts.
The unsettled nature of the law has produced not
only a federal circuit split, but also a split between
several federal and state courts sitting in the same
geographic location. Since state courts have the authority
to decide federal discrimination claims, see Gilmer
(holding that concurrent jurisdiction exists in state and
federal courts to decide ADEA claims); Yellow Freight
24
Sys., Inc. v. Donnelly, 494 U.S. 820 (1990) (same for Title
VII claims), this conflict raises the specter that the law
could be applied in inconsistent ways — depending on
whether the claim was brought in federal or state court.
In reliance on this Court’s precedents, New York
State courts have held under the FAA that clear and
unmistakable union-negotiated agreements to arbitrate
statutory discrimination claims are enforceable.
See, e.g., Garcia v. Bellmarc Prop. Mgmt., 745 N.Y.S.2d
113 (App. Div. 2002) (enforcing an arbitration agreement
drafted by the same parties to this action and containing
waiver language identical to the CBA because “Gardner-
Denver ... was not decided under the FAA, and does
not reflect modern Federal policy favoring arbitration”)
(citing Gilmer); Sum v. Tishman Speyer Props., Inc.,
Docket No. 11079-2005 (Sup. Ct. N.Y. Co. Dec. 2, 2005);
Lewandowski v. Collins Bldg. Servs. Inc., Docket No.
104657/00 (Sup. Ct. N.Y. Co. Dec. 6, 2000). These holdings
place New York State courts in direct conflict with the
Second Circuit.
Similarly, the Ohio State courts are in conflict
with the Sixth Circuit. Compare Minnick v. City of
Middleburg Heights, No. 81728, 2003 Ohio App. LEXIS
4569 (Ohio Ct. App. Sept. 25, 2003) (holding, in
accordance with Wright, that clear and unmistakable
union-negotiated waivers of statutory claims are
enforceable), with Bratten, 185 F.3d 625. In California,
the state courts are in conflict with the Ninth Circuit.
Compare Zavala v. Scott Bros. Dairy, Inc., 49 Cai. Rptr.
3d 503, 511 n. 9 (Ct. App. 2006) (acknowledging that a
union may waive its members’ rights to a judicial forum
25
for employment discrimination claims pursuant to
Wright), with Albertson’s, 157 F.3d 758.
To have federal and state courts sitting in the same
locality apply the same law inconsistently undermines
uniformity and raises the specter of forum shopping.
These dangers reinforce the need for this Court’s review.
II. UNCERTAINTY ABOUT THE ENFORCE-
ABILITY OF ARBITRATION AGREEMENTS
CREATES SERIOUS POLICY CONCERNS.
A. The Adverse Effect on Employers, Unions, and
Unionized Employees.
Continued conflict regarding the enforceability of
union-negotiated arbitration agreements hampers the
day-to-day operations of businesses and labor
organizations. Many of this country’s industries, such
as the real estate and building services industry, operate
in more than one federal circuit. In particular, many of
the building service companies covered under the CBA
operate throughout the country, including in both New
York City (Second Circuit) and Virginia (Fourth Circuit).
These multi-circuit businesses must adhere to different
collective bargaining obligations and employee policies
in circuits whose rulings are in conflict.
Labor organizations are also compelled to alter
bargaining strategies and modify practices to administer
collective bargaining agreements across jurisdictions.
Following the lead of corporate America, unions are
26
consolidating. For example, New York City-based Local
32BJ now has jurisdiction for building service employees
all along the East Coast. Absent this Court establishing
a uniform position for all circuits to follow, the prospect
of devising a standard dispute resolution procedure for
an entire region is exceedingly remote.
Further, as many current collective bargaining
agreements cover employees located in more than one
judicial circuit, an absence of uniformity among the
circuits causes confusion within bargaining relationships.
For example, the CBA covers employees in New York
(Second Circuit) and New Jersey (Third Circuit). Absent
this Court’s guidance, the clause presently might be
enforceable with respect to employees working in the
latter but not the former, even though all these
employees are working for the same employer and are
represented by the same union.
Sound policy should support the ability of business
to apply consistent practices across federal judicial
circuits; the ability of labor organizations to advance
consistent goals across federal judicial circuits; and the
ability of labor and management to pursue mature
relationships, such as the one between Local 32BJ and
the RAB, whereby they can resolve employee disputes
without disruption.
27
B. The Adverse Effect on Labor-Management
Relations.
The Second Circuit’s decision could prove highly
detrimental to labor-management relations. In circuits
that do not enforce union-negotiated waivers, an
employer would seemingly be able to bypass the union
as the employees’ bargaining agent. Employers could
require unionized employees to sign individual
arbitration agreements as a condition of employment —
in the same manner that non-unionized employees can
be compelled to do under Gilmer and its progeny.
In particular, if a union cannot agree to an arbitration
clause relating to statutory discrimination claims, it is
well-established under labor law that such a term of
employment becomes a non-mandatory subject of
bargaining. See Air Line Pilots Ass'n, Int'l v. Northwest
Airlines, Inc., 199 F.3d 477, 485 (D.C. Cir. 1999) (“[A]
proposal to trade that which is not one’s to give cannot
be a mandatory subject of bargaining.”) (citing
Brotherhood of R.R. Trainmen v. Akron & Barberton
Belt R.R. Co., 385 F.2d 581, 603 (D.C. Cir. 1967) (holding
proposal to bargain over effects of job terminations,
normally a mandatory subject, non-mandatory because
union “could not bargain away any part of the rights that
accrued to employees under the [arbitral] Award”));
see also NLRB v. Wooster Div. of Berg-Warner Corp.,
356 U.S. 342 (1958) (distinguishing between mandatory
and non-mandatory subjects of bargaining). As with all
non-mandatory subjects of bargaining, an employer
would be permitted to present the arbitration agreement
directly to its employees — bypassing the union. J.J. Case
Co. v. NLRB, 321 U.S. 332 (1944). The employer,
28
therefore, may be able to require its employees to sign
the arbitration agreement in exchange for continued
employment. Gilmer, 500 U.S. 20.
Following the Second Circuit’s rule could strip
unionized employees of their leverage that is only
available through collective bargaining. An individual
agreement to arbitrate clearly would be lawful under
Gilmer, and the concept of bypassing the union to
implement such an agreement unilaterally already has
been approved by the District of Columbia Circuit in the
context of the Railway Labor Act. Air Line Pilots Ass’n,
Int'l, 199 F.3d at 486. Marginalizing the union would
prove highly destabilizing to labor-management
relations, and would in no way serve the ultimate ends
of the ADEA or other anti-discrimination statutes.
29
CONCLUSION
For all the aforementioned reasons, the petition for
a writ of certiorari should be granted.
Respectfully submitted,
JAMES F. BERG PAuL SALVATORE*
HowAarRD ROTHSCHILD Mark D. Harris
REALTY ADvisORY BOARD ON Brian S. RAUCH
Labor RE.ATIons, INC. Tan C. SCHAEFER
292 Madison Avenue PROSKAUER Rose LLP
New York, NY 10017 1585 Broadway
(212) 889-4100 New York, NY 10036
Counsel for Petitioner (212) 969-3000
Temco Service Industries, Inc. Counsel for Petitioner
14 Penn Plaza LLC
* Counsel of Record
APPENDIX
la
APPENDIX A — OPINION OF THE UNITED
STATES COURT OF APPEALS FOR THE
SECOND CIRCUIT DECIDED AUGUST 1, 2007
UNITED STATES COURT OF APPEALS
SECOND CIRCUIT
Docket Nos. 06-3047-CV(L), 06-3106-CV(CON )
Steven PYETT, Thomas O’Connell,
and Michael Phillips,
Plaintiffs-Appellees,
V.
PENNSYLVANIA BUILDING COMPANY, 14 Penn
Plaza, LLC, and Temco Service Industries, Inc.,
Defendants-Appellants.
Argued: June 27, 2007.
Decided: Aug. 1, 2007.
Before CABRANES and RAGGI, Circuit Judges, and
KORMAN,' District Judge.
JOSE A. CABRANES, Circuit Judge.
1. The Ilonorable Edward R. Korman, of the United States
District Court for the Eastern District of New York, sitting by
designation.
2a
Appendix A
In this appeal, defendants challenge an order of the
United States District Court for the Southern District
of New York (Naomi Reice Buchwald, Judge ) denying
their motion to compel arbitration of plaintiffs’ age
discrimination claims in accordance with the collective
bargaining agreement between plaintiffs’ union and their
employer. Defendants argue that the District Court,
which relied on the Supreme Court’s decision in
Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct.
1011, 39 L.Ed.2d 147 (1974), and our Court’s decision in
Rogers v. New York University, 220 F.3d 73 (2d Cir.2000),
failed to take into account the Supreme Court’s decisions
in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S.
20, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991), and Wright »v.
Universal Maritime Service Corp., 525 U.S. 70, 119 S.Ct.
391, 142 L.Ed.2d 361 (1998). We disagree, and reaffirm
our decision in Rogers that mandatory arbitration
clauses in collective bargaining agreements are
unenforceable to the extent they waive the rights of
covered workers to a judicial! forum for federal statutory
causes of action.
BACKGROUND
The following facts are not disputed by the parties.
Plaintiffs are employees of Temco Services
Industries (“Temco”), a building service and cleaning
contractor. Before August 2003, they worked as night
watchmen in a commercial office building owned by
Pennsylvania Building Company and 14 Penn Plaza LLC
(jointly, the “Company”). Since that time, they have been
3a
Appendix A
working as night porters and light duty cleaners in the
same building.
Plaintiffs are members of Local 32BJ of the Service
Employees International Union (“Union”), and they are
covered by the collective bargaining agreement (“CBA”)
between the Union and the Realty Advisory Board on
Labor Relations, Inc. (“RAB”), the multi-employer
bargaining association of the New York City real estate
industry. The CBA contains a mandatory arbitration
clause for discrimination claims, which provides as
follows:*
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 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, New
Jersey Law Against Discrimination, New
Jersey Conscientious Employee Protection
Act, Connecticut Fair Employer Practices Act,
or any other similar laws, rules or regulations.
All such claims shall be subject to the
grievance and arbitration procedure (Articles
2. From 1999 on, each CBA between the Union and the RAB
has included a mandatory arbitration clause for discrimination
claims.
4a
Appendix A
V and VI [of the CBA] ) as the sole and
exclusive remedy for violations. Arbitrators
shall apply appropriate law in rendering
decisions based upon claims of discrimination.
In or about August 2003, the Company engaged
Spartan Security, a security services contractor and
affiliate of Temco, to provide certain security personnel,
including night watchmen, for the building. Spartan
brought in new employees, and plaintiffs, who had been
employed as night watchmen, were reassigned to
different locations and less desirable positions as night
porters and light duty cleaners within the building.
Plaintiffs filed grievances with the Union under the
CBA. They claimed that, as the only building employees
over the age of 50, they were wrongfully transferred and
denied overtime in violation of various provisions of the
CBA, including the provision that prohibited
discrimination on the basis of age. Plaintiffs’ grievances
were submitted to arbitration before the Contract
Arbitrator, Ear] Pfeffer, who held hearings on eight
occasions between February 2, 2004 and March 7, 2005.
Shortly after arbitration began, the Union declined to
pursue plaintiffs’ claims of wrongful transfer and age
discrimination, electing to pursue only the claims
regarding denial of overtime on behalf of all plaintiffs
and wrongful denial of promotion on behalf of plaintiff
Pyett. According to plaintiffs, the Union’s counsel
explained to them that “since the Union had consented
to Spartan Security being brought into the building,”
the Union could not contest their replacement as night
Sa
Appendix A
watchmen by personnel of Spartan Security. On August
10, 2005, the Contract Arbitrator issued his Opinion and
Award, denying plaintiffs’ arbitrated claims in their
entirety.
On May 26, 2004, while the arbitration was ongoing,
but after the Union declined to submit the age
discrimination claims, plaintiffs filed charges of
discrimination with the Equal Employment Opportunity
Commission (“EEOC”). The EEOC issued a Dismissal
and Notice of Rights on June 29, 2004 for plaintiffs
Phillips and O’Connell and on September 14, 2004 for
plaintiff Pyett. In each case, the EEOC determined that
its “review of the evidence . . . fail[ed] to indicate that a
violation ha[d] occurred,” and notified each plaintiff of
his right to sue. On September 23, 2004, plaintiffs
commenced this action against the Company and Temco
in the District Court, pursuing those claims that the
Union did not submit to arbitration. Plaintiffs alleged
that they had been transferred from their positions and
replaced by younger security officers in violation of the
Age Discrimination in Employment Act (“ADEA”),
29 U.S.C. § 621 et seq. , the New York State Human
Rights Law, N.Y. Exec. Law § 290 et seg. , and the New
York City Administrative code, N.Y.C. Admin. Code
§ 8-107.
Defendants moved for dismissal for failure to state
a claim upon which relief can be granted, pursuant to
Fed.R.Civ.P. 12(b)(6), and, in the alternative, to compel
arbitration, pursuant to 9 U.S.C. §§ 3 and 4. In an order
dated May 31, 2006, the District Court denied both
6a
Appendix A
motions. With respect to defendants’ motion to compel
arbitration, the District Court referred to its decision
in Granados v. Harvard Maintenance, Inc., No. 05 Civ.
5489, 2006 U.S. Dist. LEXIS 6918 (S.D.N.Y. Feb. 22,
2006), where it “concluded based largely on binding
Second Circuit precedent 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.” Pyett v. Pennsylvania
Building Co., 04 Civ. 7536, 2006 U.S. Dist. LEXIS 35952,
*11 (S.D.N.Y. June 1, 2006). In Granados, the District
Court relied principally on our Court’s opinions in F'ayer
v. Town of Middlebury, 258 F.3d 117 (2d Cir.2001), and
Rogers.’ The District Court recognized the distinction
3. Gardner-Denver held that a collective bargaining
agreement could not waive covered workers’ rights to a judicial
forum for causes of action created by Congress-in that case, a
cause of action created by Title VII. See Gardner-Denver, 413
U.S. at 49-51. Gilmer 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. See
Gilmer, 500 U.S. at 33-35. In Wright, the Supreme Court held
that a collective bargaining agreement could not waive covered
employees’ “rights to a judicial forum for federal claims of
employment discrimination” absent a “clear and unmistakable
waiver” of those rights. /d. at 82. It declined to resolve the tension
between Gardner- Denver and Gilmer, however, instead deciding
that it would “not reach the question whether such a [clear and
unmistakable] waiver would be enforceable.” /d.
In Rogers, we applied Wright to hold that an arbitration
provision in a collective bargaining agreement could not waive
an employee’s right to assert local, state, and federal statutory
(Cont'd)
Ta
Appendix A
our Court has drawn between arbitration clauses in
individual contracts, which are governed by a line of
Supreme Court cases represented by Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct.
1647, 114 L.Ed.2d 26 (1991), and arbitration clauses in
CBAs, which are governed by a line of Supreme Court
cases represented by Alexander v. Gardner-Denver Co.,
415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974). See
Granados, 2006 U.S. Dist. LEXIS 6918, at *11-14 (citing
Fayer, 258 F.3d at 122). The District Court, following
Rogers, held that union-negotiated waivers of statutory
rights in CBAs were unenforceable and denied
defendants’ motion to dismiss. /d. at *15-22. Pursuant
to 9 U.S.C. § 16(a)(1)(A) and (B), defendants timely
appealed the District Court’s May 31, 2006 order denying
their motion to compel arbitration.
DISCUSSION
Defendants argue that Rogers left open the question
of whether an arbitration clause in a CBA that clearly
waives a covered worker’s right to a judicial forum with
respect to statutory claims is enforceable. They contend
that such waivers are enforceable under Gilmer, which,
they argue, overturned the holding in Gardner-Denver.
(Cont'd)
employment discrimination claims in federal court. See 220 F.3d
at 75-77. In Fayer, we held that, under Wright, a collective
bargaining agreement could not bar a covered employee from
pursuing a First Amendment claim in federal court because it
did not clearly and unmistakably waive the employee's right to
pursue the claim. See 258 F.3d at 123.
8a
Appendix A
While conceding that in Gilmer the Supreme Court dealt
only with contracts signed by individuals and not CBAs,
defendants claim, see Appellants’ Br. 12, that in Wright
the Supreme Court made clear its abandonment of
Gardner-Denver’s rule that a union may only “waive
certain statutory rights related to collective activity, such
as the right to strike,” Gardner-Denver, 415 US. at 51,
94 S.Ct. 1011. We disagree. Our Court in Rogers squarely
decided that a union-negotiated mandatory arbitration
agreement purporting to waive a covered worker’s right
to a federal forum with respect to statutory rights is
unenforceable. We took full account of both Gilmer and
Wright and concluded that the Supreme Court’s decision
in Gardner-Denver remains good law. Our conclusion in
Rogers was an alternative holding, not dicta, and
continues to bind our Court. In any event, none of the
cases relied upon by defendants persuades us that this
holding in Rogers was incorrect.
In Rogers, we considered two issues: whether a
mandatory arbitration clause in a CBA is enforceable
generally, and whether the language of the particular
clause at issue was a “clear and unmistakable waiver”
under Wright, 525 U.S. at 80, 119 S.Ct. 391. We held first
that Gardner-Denver still governed arbitration
provisions in CBAs, notwithstanding the Supreme
Court’s holding in Gilmer that an employee who agreed
to waive his individual right to a federal forum could be
compelled to arbitrate an age discrimination claim.
See Rogers, 220 F.3d at 75 (discussing Gilmer, 500 U.S.
at 23). Second, we held that the language of the waiver
at issue in that case was not “clear and unmistakable”
9a
Appendix A
under Wright. See id. at 77. We explained that Gardner-
Denver had not been overruled by Wright. Rogers, 220
F.3d at at 75 (“[W hile Wright may have called Gardner-
Denver into question, it did not overrule it.”); see also
Wright, 525 U.S. at 82, 119 S.Ct. 391 (“We do not reach
the question whether such a waiver [under a CBA] would
be enforceable.”).
Defendants focus on our comment in Hogers that
Wright “could be taken to suggest that, under certain
circumstances, a union negotiated waiver of an
employee’s statutory right to a judicial forum might be
enforceable.” Appellants’ Br. 13 (quoting Rogers, 220
F3d at 75). But they ignore our holding, in reliance on
Wright and Gardner- Denver, that arbitration provisions
contained in a CBA, which waive employees’ rights to a
federal forum with respect to statutory claims, are
unenforceable. Defendants argue that our statements
regarding the enforceability of arbitration provisions in
CBAs were dicta because we also concluded that the
clause at issue in Rogers was not “clear and
unmistakable.” This argument is without merit. We
explicitly stated in Rogers that “the rule in Gardner-
Denver was sufficient” to decide the case. Rogers, 220
F.3d at 75. An alternative conclusion in an earlier case
that is directly relevant to a later case is not dicta; it is
an entirely appropriate basis for a holding in the later
case. Our reliance on Gardner-Denver in Rogers was an
alternative holding; it was thus not dicta. See
MacDonald, Sommer & Frates v. County of Yolo, 477
U.S. 340, 346 n. 4, 106 S.Ct. 2561, 91 L.Ed.2d 285 (1986)
(“(S}inece the Superior Court did not rest its holding on
10a
Appendix A
only one of its two stated reasons, it is appropriate to
treat them as alternative bases of decision [rather than
dicta].”); United States v. Fulks, 454 F.3d 410, 434-35
(4th Cir.2006) (stating that an alternative conclusion in
a prior case that bears directly on a subsequent case
cannot be dismissed as dicta).
None of the other Supreme Court cases on which
defendants rely casts doubt on our holding in Rogers.
For example, they draw our attention to Metropolitan
Edison Co. v. N.L.R.B., 460 U.S. 693, 103 S.Ct. 1467, 75
L.Ed.2d 387 (1983), and Circuit City Stores, Inc. v.
Adams, 532 U.S. 105, 121 S.Ct. 1302, 149 L.Ed.2d 234
(2001). Metropolitan Edison held that union officials may
be bound by union-negotiated agreements to enforce no-
strike agreements, and thus waive their right,
guaranteed by the National Labor Relations Act
§ 8(a)(3), 29 U.S.C. § 158(a)(3), to be free of anti-union
discrimination. Metropolitan Edison, 460 U.S at 708.
However, rather than supporting the notion that
individual rights may be waived by CBAs, as defendants
claim, that holding is in line with the Supreme Court’s
observation in Gardner-Denver that unions “may waive
certain statutory rights related to collective activity,
such as the right to strike.” Gardner-Denver, 415 U.S.
at 51 (emphasis added). Circuit City addressed an
individual’s employment contract, rather than a CBA,
and therefore likewise does not address the issue before
us now.’
4. After Wright, our sister circuits have not stepped much
beyond Gardner-Denver's holding with regard to the
(Cont'd)
lla
Appendix A
In short, there is nothing that has changed in the
nine years since Wright or the seven years since Rogers
that compels us to reverse our ruling in Rogers that
arbitration provisions contained in a CBA, which purport
to waive employees’ rights to a federal forum with
respect to statutory claims, are unenforceable.°®
(Cont'd)
enforceability of arbitration provisions in CBAs. See, e.g., O’Brien
v. Town of Agawam, 350 F.3d 279, 285 (1st Cir.2003) (“The Wright
Court declined to resolve this tension [between enforceability of
mandatory arbitration clauses in individual contracts and those
in CBAs], holding that even assuming a CBA can waive an
employee’s right to a federal forum, any such waiver must at a
minimum be ‘clear and unmistakable.’ ”); Mitchell v. Chapman,
343 F.3d 811, 824 (6th Cir.2003) (“Assuming arguendo, that the
CBA mandates binding arbitration, it is well-established that the
CBA must contain a ‘clear and unmistakable waiver’ of Mitchell’s
[Family and Medical Leave Act] rights to foreclose his
entitlement to a judicial forum.”); Tice v. Am. Airlines, Inc., 288
F.3d 313, 317 (7th Cir.2002) (citing Gardner-Denver, but noting
the ambiguity in the CBA language); EEOC v. Ind. Bell Tel. Co.,
256 F.3d 516, 522 (7th Cir.2001) (holding that “a union cannot
surrender employees’ rights under Title VII”). But see E.
Associated Coal Corp. v. Massey, 373 F.3d 530, 533 (4th Cir.2004)
(“{A] union-negotiated CBA may waive an employee’s statutory
right to litigate his employment discrimination claims in a judicial
forum.”).
5. The case before us illustrates why the Supreme Court
may be reluctant to treat arbitration provisions in CBAs the same
as arbitration provisions in individual contracts. If, as plaintiffs
allege, the Union refused to submit the wrongful transfer claims
to arbitration because the Union had agreed to the new contract,
(Cont'd)
12a
Appendix A
CONCLUSION
For the foregoing reasons, the order of the District
Court is affirmed.
(Cont'd)
the interests of the Union and the interests of plaintiffs are
clearly in conflict. See Gardner-Denver, 415 U.S. at 58 n. 19, 94
S.Ct. 1011 (“| T]he interests of the individual may be subordinated
to the collective interests of all employees in the bargaining
unit.”).
I3a
APPENDIX B — MEMORANDUM AND ORDER OF
THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK
FILED JUNE 1, 2006
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
No. 04 Civ. 7536 (NRB)
STEVEN PYETT, THOMAS O’CONNELL,
and MICHAEL PHILLIPS,
Plaintiffs,
- against -
PENNSYLVANIA BUILDING COMPANY,
14 PENN PLAZA LLC, and
TEMCO SERVICE INDUSTRIES, INC.,
Defendants.
MEMORANDUM AND ORDER
NAOMI REICE BUCHWALD
UNITED STATES DISTRIC? JUDGE
Steven Pyett, Thomas O’Connell, and Michael
Phillips (collectively, “plaintiffs”), all of whom are over
50 years of age, bring this action against Pennsylvania
Building Company (“PBC”), 14 Penn Plaza LLC
14a
Appendix B
(collectively, “the Company”), and Temco Service
Industries, Inc. (“Temco”) (collectively, “defendants”) for
age discrimination. Defendants now move to dismiss or
compel arbitration and for sanctions. For the reasons
set forth below, defendants’ motions are denied.
BACKGROUND!
Plaintiffs are or were longstanding employees in the
office building at 14 Penn Plaza, New York, New York
(the “building”), who allege that in 2003 they were
reassigned to less desirable positions because of their
age.” Plaintiffs’ Amended Complaint alleges that
defendants engaged in age discrimination, in violation
of the Age Discrimination in Employment Act of 1967,
as amended, 29 U.S.C. § 621 et seq. (“ADEA”), the New
York State Human Rights Law, N.Y. Exec. Law § 290,
et seq. (McKinney 2005), and the New York City
Administrative Code, N.Y.C. Admin. Code § 8-107.
Employment History
Pyett began working at the building in or about 1970,
and since then he has been continuously employed there
1. The following facts are drawn from plaintiffs’ complaint
and, as is appropriate when considering a motion to dismiss under
Fed.R.Civ.P 12(b)(6), are assumed herein to be true.
2. Plaintiffs Pyett and Phillips are still employed at the
building, while O’Connell left employment in 2004. First
Amended Complaint (“Amended Complaint” or “Am. Compl.”)
V9 14, 18, 22.
15a
Appendix B
in various positions. Until his reassignment to work as a
night porter in 2003, he had worked since 1989 as a night
watchman. Am. Compl. 17 13, 14. O’Connell began
working at the building in or about 1969 and was
continuously employed there until he retired in 2004.
Id. at 117. O’Connell also worked in numerous positions,
and before his reassignment to work as a night porter
in 2003, he had been working as a night watchman
starting in 1992. /d. at 118. Phillips began working at
the building in or about 1995 and had worked as a night
starter until he was reassigned in 2003 to work as a light
duty cleaner.’ /d. at 1 35.
All three plaintiffs were and still are members of
Local 32B-32J Service Employees International Union
(“Local 32B-J”). Jd. at 19 15, 19, 22. In addition, plaintiffs
allege that at all relevant times, PBC and Temco were
and are parties to a collective bargaining agreement
(“CBA”) with Local 32B-J covering the terms and
conditions of plaintiffs’ employment. /d. at 1 27.
Plaintiffs allege that in or about 1982 defendant
Temco was engaged by defendant PBC to provide
maintenance and cleaning services at the building. /d.
at 123. At or about the same time, Pyett and O’Connell
were transferred from the payroll of PBC to that of
Temco. /d. at 1 24. Notwithstanding this payroll change,
plaintiffs allege that they continued to receive their work
3. We note that elsewhere, the Amended Complaint states
that Phillips is currently employed as a night porter. See id.
at 4 22.
l6a
Appendix B
assignments and were still supervised by PBC
employees, including the building owner. /d. at 1 25.
Plaintiffs assert that in or about August 2008,
Spartan Security’ was engaged by PBC to provide
security services at the building. /d. at 1 26. Shortly
before this date, on or about July 23, 2003, plaintiffs
Pyett and O’Connell were informed by PBC and Temco
that they were being reassigned as night porters, while
Phillips was told he would be reassigned as a light duty
cleaner. Jd. at 11 28, 32, 35. Plaintiffs allege that they
were reassigned to “substantially less desirable”
positions. /d. at 191 29, 36. In addition, Pyett and
O’Connell allege that their reassignments led to
“a substantial loss of income.” /d. at 1% 30, 33. In all three
cases, plaintiffs allege that their former positions were
given to Spartan employees who were much younger and
had much less seniority at the building than them. /d. at
1% 31, 34, 37.
Procedural History
In or about August 2003, plaintiffs filed grievances
against defendants under the CBA, alleging that: (i) they
had been reassigned to less desirable positions in
violation of provisions which prohibited age
discrimination; (ii) the Company violated seniority
4. Plaintiffs allege that Spartan is a company “engaged in
the business of providing building security services at various
buildings located in the City of New York, and a subsidiary,
department, related or affiliated company of the defendant
Temco.” 7d. at 4 11.
17a
Appendix B
policies when it failed to promote either Pyett or
O’Connell to the assistant mechanic position; and (iii)
the Company failed equitably to rotate overtime. /d. at
1 38; Def. Mem. at 4. While all these grievances were
initially submitted by Local 32B-J to arbitration, the
union subsequently withdrew plaintiffs’ age
discrimination claim from arbitration by letter dated
February 23, 2004, Am. Compl. 1% 39 and 40, and
proceeded with the remaining claims.
On or about August 21, 2004, plaintiffs filed an action
(No. 04 Civ. 6769(N RB)) in this Court against Local 32B-
J and defendants, alleging that Local 32B-J had
breached its duty of fair representation toward them by
withdrawing their age discrimination grievance from
arbitration. /d. at 7 41.
On or about May 18, 2004, plaintiffs jointly filed a
complaint of age discrimination against defendants with
the United States Equal Employment Opportunity
Commission (“EEOC”). /d. at 1 42. The EEOC
subsequently issued right to sue letters to plaintiffs, 2d.
at 111 44-46, and on November 1, 2004 plaintiffs filed the
Amended Complaint against defendants.°
On August 10, 2005, the arbitrator issued an Opinion
and Award which denied the remaining grievances of
Local 32B-J. See Plaintiffs’ Letter dated September 12,
2005 (“Sept. 12, 2005 Letter”). Following the arbitrator’s
decision, plaintiffs discontinued their action (No. 04 Civ.
5. Defendants answered the Amended Complaint in March
2005.
18a
Appendix B
6769(NRB)) against Local 32B-J and defendants.
However, plaintiffs maintain that their claims in the
instant action remain viable notwithstanding the
arbitrator’s decision. See Sept. 12, 2005 Letter.
Defendants subsequently filed their motion on
November 23, 2005.
DISCUSSION
I. Motion to Dismiss
In considering a motion to dismiss,® the Court must
accept as true all material factual allegations in the
complaint. Levy ex rel. Immunogen Inc. v. Southbrook
Int'l Invs., Ltd., 263 F.3d 10, 14 (2d Cir.2001). However,
“(cjonclusory allegations or legal conclusions
masquerading as factual conclusions will not suffice to
prevent a motion to dismiss.” Smith v. Local 819 I.B.T.
Pension Plan, 291 F.3d 236, 240 (2d Cir. 2002) (quoting
Gebhardt v. Allspect, Inc., 96 F.Supp.2d 331, 333
(S.D.N.Y. 2000)). A motion to dismiss may be granted
only where “it appears beyond doubt that the plaintiff
can prove no set of facts in support of his claim which
would entitle him to relief.” Still v. DeBuono, 101 F.3d
888, 891 (2d Cir. 1996) (quoting Conley v. Gibson, 355
U.S. 41, 45-46 (1957)).
—-——__ asi a —- —_—_—————— - -——
6. Because we do not rely on any material outside the
complaint in ruling on the motion, we decline to convert this
motion into one for summary judgment. See Friedl v. City of
New York, 210 F.3d 79, 83 (2d Cir. 2000).
19a
Appendix B
Defendants assert in their papers that we should
undertake the three-step burden shifting analysis
established in McDonnell Douglas Corp. v. Green, 411
U.S. 792, 802-04 (1973), in deciding their motion to
dismiss. However, “(t]he prima facie case under
McDonnell Douglas ... is an evidentiary standard, not
a pleading requirement.” Swierkiewicz v. Sorema N.A.,
534 U.S. 506, 510, 122 S.Ct. 992, 997 (2002).’ Accordingly,
the Supreme Court has unanimously held that “an
employment discrimination complaint need not include
{specific facts establishing a prima facie case of
discrimination] and instead must contain only ‘a short
and plain statement of the claim showing that the pleader
is entitled to relief.” ’ Leibowitz v. Cornell University,
445 F.3d 586, 591 (2d Cir.2006) (quoting Swierkiewicz,
534 U.S. at 508) (brackets in original); see also Galvez v.
New York Mortgage Co., No. 05 Civ. 2365(DLC), 2005
WL 2124112, at *4 (S.D.N.Y. Sept. 1, 2005)
(“[Defendant’s] insistence that [plaintiff] must state a
prima facie claim of race discrimination to survive a
motion to dismiss must be rejected in light of
Swierkiewicz.” ).
Therefore, our inquiry at this stage in the litigation
is limited to whether the Amended Complaint provides
defendants with fair notice of what the plaintiffs’ claims
are and the grounds upon which they rest.
See Swierkiewicz, 534 U.S. at 512. Under this “simplified
standard for pleading, ‘{[a] court may dismiss a complaint
only if it is clear that no relief could be granted under
7. Defense counsel subsequentiy acknowledged the
applicability of Swierkiewicz during oral argument.
20a
Appendix B
any set of facts that could be proved consistent with the
allegations.’” 7d. at 514 (quoting Hishon v. King &
Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229 (1984)); see
Braphman-Bines v. New York City Police Dept., No. 03
Civ. 10207(/KMK), 2005 WL 22843, at *3 (S.D.N.Y. Jan.
3, 2005) (“Under Swierkiewicz, Rule 8 pleading is
extremely permissive.”) (quoting Wynder v. McMahon,
360 F.3d 73, 77 (2d Cir.2004)). “This simplified notice
pleading standard relies on liberal discovery rules and
summary judgment motions to define disputed facts and
issues and to dispose of unmeritorious claims.”
Swierkiewicz 534 U.S. at 512.
We find that plaintiffs have satisfied these lenient
standards, as they allege that plaintiffs were over the
age of 40, that they were reassigned to positions which
led to substantial losses in income,® and that their
replacements were both younger and had less seniority
at the building. Cf Vallone v. Banca Nazionale del
Lavoro, N.Y. Branch, No. 02 Civ. 6064( RCC), 02 Civ. 7102
(RCC), 2004 WL 2912887, at *3 (S.D.N.Y. Dec. 14, 2004).
Although plaintiffs clearly will need evidence supporting
these allegations to survive summary judgment, we
cannot say that they have failed to meet the notice
pleading standard required at this stage. Therefore,
defendants’ motion to dismiss is denied.
8. In the case of plaintiff Phillips, the Amended Complaint
alleges that he was assigned to a “substantially less desirable
position.” Am. Compl. 1 36.
2la
Appendix B
II. Motion to Compel Arbitration
Defendants alternatively move to compel arbitration
in this matter, arguing that plaintiffs are bound by the
terms of the CBA to arbitrate their claims. Plaintiffs
assert that they are not bound by these union-negotiated
terms and are free to litigate their claims before this
Court. We recently addressed this very issue in
Granados v. Harvard Maintenance, Inc., No. 05 Civ.
5489(NRB), 2006 WL 435731 (S.D.N-Y. Feb. 22, 2006).
There, we concluded based largely on binding Second
Circuit precedent 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. In light of our reasoning in that case,
defendants’ motion to compel arbitration is denied.
III. Motion for Sanctions
In light of these conclusions, imposition of sanctions
against plaintiffs would not be appropriate. Therefore,
defendants’ motion for sanctions is denied.
22a
Appendix B
CONCLUSION
For the reasons set forth above, defendants’ motion
to dismiss or compel arbitration is denied, and their
motion for sanctions is denied.
IT IS SO ORDERED.
Dated: New York, New York
May 31, 2006
23a
APPENDIX C — OPINION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK
FILED FEBRUARY 22, 2006
UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK
05 Civ. 5489 (NRB)
LUZ GRANADOS,
Plaintiff,
- against -
HARVARD MAINTENANCE, INC.,
Defendant.
February 22, 2006, Decided
February 22, 2006, Filed
JUDGES: NAOMI REICE BUCHWALD, UNITED
STATES DISTRICT JUDGE.
OPINION BY: NAOMI REICE BUCHWALD
OPINION
MEMORANDUM AND ORDER
24a
Appendix C
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE
Plaintiff Luz Granados (“plaintiff” or “Granados”),
an office cleaner, has brought this action against her
current employer, Harvard Maintenance, Inc.
(“defendant” or “HMI”), which provides cleaning and
maintenance services to commercial properties. Plaintiff
alleges that defendant subjected her to disparate
treatment based on her race, age, national origin, and
gender and also retaliated against her in response to her
request for leave pursuant to the Family and Medical
Leave Act of 1993 (“FMLA”) as well as her complaints
of discrimination. Defendant now moves pursuant to
Fed.R.Civ.P. 12(b)(1) & (6) to dismiss plaintiff’s
complaint. For the reasons set forth herein, defendant’s
motion is denied.
BACKGROUND’
Plaintiff is a 54 year old Hispanic woman who has
been employed as an office cleaner by HMI since 2002.
Compl. at 1 6. Plaintiff asserts claims under the FMLA;
the New York State Human Rights Law, N.Y. Exec. Law
§ 290, et seq. (McKinney 2005); and the New York City
Administrative Code, N.Y.C. Admin. Code § 8-107.
Plaintiff alleges that she has been subjected to a hostile
1. The following facts are drawn from plaintiff’s complaint
and, as is appropriate when considering a motion to dismiss under
Fed.R.Civ.P 12(b)(6), are assumed herein to be true.
25a
Appendix C
work environment and has suffered adverse employment
actions based on her race, age, national origin, and
gender. She also alleges that adverse actions were taken
against her for requesting leave pursuant to the FMLA
and in retaliation for her complaints of discrimination.
Id. at % 7.
I. Disparate Treatment and Harassment
Plaintiff alleges that since 2003 and continuing to
the present day, defendant has taken various actions
against her which it did not take against other, similarly
situated employees. Jd. at 1 8. Specifically, plaintiff
alleges that her male, Albanian supervisor, Al (last name
unknown), regularly used derogatory language in her
presence. On a monthly basis, Al referred to Hispanics
as “Spic.” On a weekly basis, he referred to plaintiff as
“dumb Hispanic.” Virtually every day, he referred to
plaintiff as an “old, weak woman” and referred to older
male employees as “old and weak.” On July 20, 2003, in
front of several other employees, Al allegedly called
plaintiff an “old Mexican woman” and a “clown” while
using plaintiff’s work cart to imitate an old woman. /d.
In addition, plaintiff asserts that during weekly
inspections, defendant regularly allows three to four
Albanian employees to work together to clean sites of
comparable size to those which it requires one Hispanic
employee to clean alone. Plaintiff and other Hispanic
employees allegedly are then reprimanded for failure
to do as good a job as the Albanians, even when this is
not the case. On July 10, 2003, plaintiff alleges that she
26a
Appendix C
alone was suspended without pay for failing to properly
clean her assigned area despite the fact that two
Albanian women were working on the same area with
her. Jd.
From 2003 until the present, plaintiff alleges that
defendant has forced her to vacuum nearly every day,
even though Albanian employees were not required to
do so. Plaintiff at one point allegedly produced a doctor’s
note stating that she should refrain from vacuuming
because it was causing damage to her hands.
Irregardless, defendant did not assign an Aibanian co-
worker assigned to the same work area to vacuum but
instead forced plaintiff to continue vacuuming. Jd.
Plaintiff alleges that on several occasions she
complained both to HMI management and to her union
that defendant subjected Hispanic employees to
disparate treatment. In response, she alleges that she
was told by management to “shut up and mind her own
business.” Plaintiff alleges that approximately twice a
month thereafter, defendant harassed her and
threatened her employment. /d. at 7 9.
Il. FMLA Leave Request
On August 26, 2003, plaintiff requested two weeks
of unpaid leave (which she alleges was the equivalent of
FMLA leave), as well as two weeks of accrued vacation
time in order to visit her terminally ill father in Colombia.
Despite the fact that plaintiff’s union delegate, Paul
Romero (“Romero”), had “approved [her] paperwork”
27a
Appendix C
defendant denied the request. Plaintiff alleges that
Romero told her the request was denied because she was
Hispanic rather than Albanian. Romero then advised
plaintiff to see Murat Mela (“Mela”), an Albanian who
was the Assistant Vice President of HMI. /d. at 1 10.
Plaintiff alleges that when she went to Mela’s office
accompanied by her husband, Mela allegedly told
plaintiff that she was a “troublemaker” and that she was
“now going to be on [Mela’s] troublemakers list.” He then
allegedly stated that he “[got] rid of [troublemakers]”
and that plaintiff should not complain to the union about
discrimination or FMLA leave because “all problems
remain in house and anybody who goes outside is a
troublemaker.” /d. at 9111.
III. Subsequent Events
On October 6, 2003 (presumably after she returned
from her visit to her father), Al allegedly told plaintiff
that she could not start her shift until she provided a
copy of her father’s death certificate to Mela. /d. at 112.
Plaintiff produced one the following day, but she was then
told that she would not be allowed to return to work until
she provided a notarized English translation of the death
certificate. Jd. at 4 13.
Plaintiff eventually was allowed to return to work
but then discovered that an Albanian woman had
replaced her while she was away. Plaintiff also learned
that the Albanian woman was allowed eight hours to
28a
Appendix C
complete the same job that plaintiff was required to
perform within 7.5 hours.’ /d. at 9 14.
In October 2003, during an inspection in which
plaintiff and an Albanian woman were both assigned the
same work area, Al reprimanded plaintiff because he
claimed the area was not clean. Plaintiff alleges that only
she was reprimanded, despite the fact that Al saw the
Albanian woman sitting in an office instead of working.
Plaintiff alleges that when she complained to Al about
this, he told the Albanian woman, “(t|his Spanish bitch
thinks she’s going to do what she wants. I’m going to
make her life miserable and if she says anything else I
have oraers from the office to get rid of her. I can get
rid of her for anything. She’s an old woman and a
troublemaker.” /d. at 4 15.
During the same month, Al again complained that
plaintiff’s work area was not properly cleaned. Plaintiff
allegedly explained to him that her Albanian coworker
refused to clean her portion of the assigned area.
Although Al saw that the Albanian woman was not
working, he told plaintiff to “mind her own business”
and said that the Albanian woman could “do whatever
she wants.” Al allegedly threatened to issue a written
reprimand to plaintiff if the floor was not cleaned when
he returned. /d. at 9 16.
2. Defendant allegedly compensates employees on an hourly
basis,:d at 714, but it is not clear whether the Albanian woman
was paid at the same rate as plaintiff.
~
29a
Appendix C
On March 11, 2005, plaintiff was suspended for three
days fer poor work performance. She alleges that when
giving her the suspension, Al stated to her, “I told you I
would get you. We are going to make an example out of
you. This is coming from the office. Those were my
orders.” Jd. aL 417. During the same month, Al allegedly
admitted to plaintiff that he had been ordered to make
her life miserable. /d. at 7 18.
On Apr* 12, 2005, plaintiff was suspended for one
week for failing to properly clean her worksite. However,
defendant failed to suspend plaintiff’s “similarly-
situated employees who were outside her protected
class.” In addition, Al allegedly stated to plaintiff that
“[yjou Hispanic people do not know how to clean.
My people are perfect.” Al also allegedly stated that if
plaintiff went to the union she would be fired. /d. at
1 19. On April 15, 2005, while plaintiff was still
serving her suspension, defendant suspended her again.
Id. at I 20.
On May 5, 2005, Al ordered plaintiff to lift heavy
trash bags. When she asked him to assign someone else
to assist her, he allegediy refused and threatened to “get
your Hispanic ass out of this building.” Fearful of losing
her job, plaintiff complied, subsequently injuring her
hand and foot as a result. /d. at 9 21.
Plaintiff alleges that as a result of her treatment,
she has suffered and continues to suffer a loss of
monetary and other benefits. She also alleges physical
and emotional damages. /d. at "23.
30a
Appendix C
IV. Collective Bargaining Agreement*
Throughout her employment with HMI, plaintiff has
been represented for purposes of collective bargaining
by Local 32B-32J, Service Employees International
Union (“Local 32B-32J” or the “Union”). A collective
bargaining agreement (“CBA” or “Agreement”) between
IiMI and Local 32B-32J is in place which governs wages,
hours, and other terms and conditions. The CBA directly
references and requires compliance with the FMLA.‘ In
addition, the CBA requires arbitration of disputes
“arising between the parties as to interpretation,
application or performance of any part of this Agreement
and such other issues as the parties are expressly
required to arbitrate ... under the terms of this
Agreement.” Affidavit of Perry S. Heidecker, Esq. dated
August 15, 2005 (“Heidecker Aff.”) Ex. A at 6. The CBA
also contains an anti-discrimination clause which states
that:
There shall be no discrimination against
any present or future employee by reason of
race, creed, color, age, disability, national
3. The facts in this section, though not included in the
complaint, are drawn from the contents of the CBA, of which we
appropriately take judicial notice. See Kramer v. Time Warner,
Inc., 937 F.2d 767, 773 (2d Cir. 1991).
4. The Agreement states that “[aJny Employer who is
required by law to comply with the provisions of the Family
Medical and Leave Act (FMLA) shall comply with the
requirements of said act.” Heidecker Aff. Ex. A at 36.
3la
Appendix C
origin, sex, sexual orientation, union
membership, or any 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 procedure (Articles V and VI) as
the sole and exclusive remedy for violations.
Id. at 41 (emphasis added).
Defendant has moved to dismiss the complaint in its
entirety. For the reasons set forth below, defendant's
motion is denied.
DISCUSSION
In considering a motion to dismiss, the Court must
accept as true all material factual allegations in the
complaint. Levy ex rel. Immunogen Inc. v. Southbrook
Int'l Invs., Ltd., 263 F.3d 10, 14 (2d Cir. 2001). However,
“fejonclusory allegations or legal conclusions
masquerading as factual conclusions will not suffice to
prevent a motion to dismiss.” Smith v. Local 819 1. B.T:
Pension Plan, 291 F.3d 236, 240 (2d Cir. 2002) (quoting
Gebhardt v. Allspect, Inc., 96 F.Supp.2d 331, 333
(S.D.N.Y. 2000)). A motion to dismiss may be granted
only where “it appears beyond doubt that the plaintiff
32a
Appendix C
can prove no set of facts in support of his claim which
would entitle him to relief.” Still v. DeBuono, 101 F.3d
888, 891 (2d Cir.1996) (quoting Conley v. Gibsor.,, 355 U.S.
41, 45-46 (1957)).
I. Waiver of Rights Generally
Defendant argues that plaintiff’s complaint should
be dismissed because the union-negotiated CBA
designates arbitration as the sole and exclusive remedy
for any disputes involving the subject matter of
plaintiff’s claims. As detailed in numerous cases, see, e.g.,
Fayer v. Town of Middlebury, 258 F.3d 117, 121-22 (2d
Cir.2001), there has been some uncertainty about the
enforceability of such provisions in light of two different
lines of Supreme Court precedent. For purposes of this
discussion, we summarize them briefly below.
The first line of cases involves “the preclusive effect
of arbitrations conducted under collective bargaining
agreements on subsequent litigation arising out of the
same underlying facts.” /d. at 121. This line is
represented by Alexander v. Gardner-Denver Co., 415
U.S. 36, 49 (1974), in which the Court held that an
individual is not barred from bringing a Title VII action
even if, pursuant to a nondiscrimination clause of a
collective bargaining agreement, he previously
arbitrated a grievance involving the same conduct.
The second line of cases deals with “the
enforceability of individually executed predispute
arbitration agreements on federal statutory and
33a
Appendix C
constitutional claims.” Fayer, 258 F.3d at 122. This line
is represented by Gilmer wv. Interstate/Johnson Lane
Corp ., 500 U.S. 20, 27 (199!), in which the Court held
that a claim under the Age Discrimination in
Employment Act of 1967 (ADEA) could be subjected to
compulsory arbitration pursuant to an arbitration
agreement in a securities registration form, thus waiving
the plaintiff’s right to a federal judicial forum. There,
the Court stated that “[iJ]t is by now clear that statutory
claims may be the subject of an arbitration agreement,
enforceable pursuant to the FAA .” Gilmer, at 26.
Subsequently, in Wright v. Universal Maritime Svc.
Corp 525 U.S. 70, 72 (1998), the Supreme Court
considered “whether a general arbitration clause in
a{CBA] requires an employee to use the arbitration
procedure for an alleged violation of the Americans with
Disabilities Act of 1990(ADA).” Although the Court
ultimately concluded that the employee was not obliga’ed
to use the arbitration procedure, it did not explicitly
decide whether or not such a union-negotiated waiver of
the employee’s right to a judicia! forum was valid. /d. at
77 (“we find it unnecessary to resolve the question of
the validity of a union-negotiated waiver, since it is
apparent to us ... that no such waiver has occurred”).
Rather, it held that the waiver in question was not
sufficiently clear and unmistakable such that, even
assuming such waivers were enforceable, it would be
valid. Jd. at 80. In reaching its conclusion, the Court
acknowledged the tension between the two prior lines
of cases but did not resolve it.
34a
Appendix C
Absent more explicit guidance from the Supreme
Court, lower courts, including the Second Circuit, have
distinguished these two lines of cases by asserting that
the second line of cases “deal[s] not with arbitration
clauses in collective bargaining agreements but with
employees’ own agreements to arbitrate specified
disputes.” Frayer, 258 F.2d at 122; Rogers v. New York
University, 220 F.3d 73, 75 (2d Cir. 2000).
In addition, the Second Circuit has since considered
the enforceability of an arbitration provision in a union-
negotiated CBA. The Second Circuit concluded that the
provision was not enforceable against the plaintiff’s
claims under the ADA, the FMLA, and New York State
and City human rights laws. Rogers, 220 F:3d at 75 (“The
arbitration provision in the instant case, by which
employees purport to waive their right to a federal forum
with respect to statutory claims, is contained in a union-
negotiated CBA.... [SJuch provisions are not
enforceable.”). In reaching this conclusion, the Court
stated that “the Gardner-Denver rule is sufficient to
decide this case” and noted that “while Wright may have
called Gardner-Denver into question, it did not overrule
it.” Jd.
However, as an alternative rationale, it also affirmed
the district court’s conclusion that even if such provisions
were enforceable as a general matter, the alleged waiver
in that case was not sufficiently clear. /d. at 75-77. In
reaching this conclusion, the Court articulated a two-
step analysis of whether a waiver of statutorily conferred
rights in a CBA is clear and unmistakabie. Specifically,
35a
Appendix C
it held that a waiver in a CBA will be deemed sufficiently
clear and unmistakable if either of two conditions is met.
Id. at 76. “First, a waiver is sufficiently explicit if the
arbitration clause contains a provision whereby
employees specifically agree to submit all federal causes
of action arising out of their employment to arbitration.”
Id. “Second, a waiver may be sufficiently clear and
unmistakable when the CBA contains an explicit
incorporation of the statutory anti-discrimination
requirements in addition to a broad and general
arbitration clause.” /d.
Applying the two rationales of Rogers, we find that
the arbitration provision at issue here is not enforceable
as to any of plaintiff’s statutory claims.
A. FMLA Claim
Broadly, the Second Circuit has already held that a
union-negotiated arbitration clause in a CBA is
unenforceable. See Rogers, 220 F.3d at 75; F'ayer, 258 F.3d
at 123 n. 2 (“In this Circuit, we have reached the question
left open by Wright and held that an arbitration clause
in a union collective bargaining agreement is not
enforceable against an individual employee’s ADA and
Family and Medical Leave Act claims.”); see also Fowler
v. Transit Supervisors Org., 96 Civ. 6796 (JGK), 2000
WL 1726687, at *1 (S.D.N.Y. Sept. 6, 2000) (noting that
Second Circuit has “expressly held that collective
bargaining agreement mandatory arbitration provisions
cannot bar union members from bringing federal claims
to court”). This binding precedent is sufficient to find
36a
Appendix C
that the arbitration clause in this case is unenforceable
against plaintiff’s FMLA claim. See Rogers, 220 F.3d at
75 (noting that “the Gardner-Denver rule is sufficient
to decide this case”); Beljakovic v. Melohn Props., Inc.,
04 Civ. 3694(RJH), 2005 WL 2709174, at *1 (S.D.N.Y. Oct.
17, 2005) (finding that language requiring arbitration was
“clear and unequivocal” but concluding that because
CBA was negotiated between plaintiff’s union and his
employer, the arbitration provision was unenforceable).
Moreover, even assuming such an arbitration clause
were enforceable, the provision in this case is not
sufficiently explicit to waive plaintiff’s right to assert
her claim under the FMLA in federal court. The
provision in relevant part states that it includes
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.
Heidecker Aff. Ex. A at 41 (emphasis added). Although
the provision references both federal and state statutory
rights, it does not specifically incorporate claims made
under the FMLA and also falls short of “a specific
agreement to submit all federal claims t~ arbitration.”®
Rogers, 220 F.3d at 76 (emphasis addea).
5. We do not consider the reference to “any other similar
laws, rules or regulations” to be sufficiently explicit to
(Cont'd)
37a
Appendix C
In addition, while the requirement in the CBA to
abide by the FMLA may “creat [e] a contractual right
that is coextensive with the federal statutory right,”
doing so does not necessarily “mak[{e] compliance with
the [federal statute] a contractual commitment that
would be subject to the arbitration clause.” Wright, 525
U.S. at 79, 81. In this case, the CBA’s FMLA compliance
provision and a separate provision for arbitration of
disputes “arising between the parties as to
interpretation, application or performance of any part
of this Agreement and such other issues as the parties
are expressly required to arbitrate ... under the terms
of this Agreement,” Heidecker Aff. Ex. A at 6, are
insufficient to constitute a clear waiver. See Rogers, 220
F.3d at 76 (noting that although the CBA expressly
provided for FMLA compliance and elsewhere contained
a general arbitration clause, it did not thereby make
compliance with the FMLA a contractual commitment
subject to arbitration). In light of the above, we find that
the arbitration provision is unenforceable against
plaintiff’s F MLA claim, and she is entitled to bring this
claim in federal court. Defendant’s motion as to
plaintiff’s FMLA claim therefore is denied.
B. State Statutory Claims
Because the Federal Arbitration Act (“FAA”),
9 U.S.C. § 1 et seq., applies to this case, federal law
(Cont'd)
incorporate the FMLA. We also note that in light of the fact that
the drafters chose to specify certain federal claims, the exclusion
of the FMLA is especially significant.
38a
Appendix C
controls the analysis of whether the arbitration provision
is enforceable against plaintiff’s state statutory claims.°®
See Fletcher v. Kidder, Peabody & Co., 81 N.Y.2d 623,
631, 601 N.Y.S.2d 686, 689 (N.Y. 1993) (noting that “where
the FAA is applicable, it preempts State law on the
subject of the enforceability of arbitration clauses”).
In the case of plaintiff’s state statutory claims, the
waiver contained in the CBA is sufficiently clear. The
prevision explicitly states that “claims made pursuant
to... the New York State Human Rights Law/[ |[and]
the New York City Human Rights Code ... shall be
subject to the grievance and arbitration procedure
(Articles V and VI) as the sole and exclusive remedy for
violations.” Heidecker Aff. Ex. A at 41.
Therefore, we now confront an issue that many
courts before us have been able to avoid. That is, in
addressing plaintiff's state statutory claims, we must
answer the question of whether a clear and unmistakable
union-negotiated waiver is enforceable. As discussed
above, the Supreme Court has not spoken clearly on this
issue. However, we understand Rogers to hold that such
6. Neitler party disputes that the FAA applies to this case.
Because plaintiff “is an employee in a service industry which
affects commerce, and is not engaged in the transportation
industry” we agree. Rogers v. New York University, 98 Civ.
2089(WHP), 1999 WL 710777, at *2 (S.D.N.Y. Sept. 10, 1999),
aff'd, 220 F:3d 73 (2d Cir. 2000); see Maryland Cas. Co. v. Realty
Advisory Bd. on Labor Relations, 107 F.3d 979, 982 (2d Cir.1997)
(“Since collective bargaining agreements are c.; tracts entailing
transactions in commerce, the bargaining agreement in the
instant case falls within the purview of the [FAA, ’).
all
39a
Appendix C
union-negotiated waivers are unenforceable under the
reasoning of Gardner-Denver. Therefore, in the absence
of more explicit guidance from the Supreme Court, and
in light of the Second Circuit’s holding in Rogers that
arbitration provisions contained in a union-negotiated
CBA are unenforceable against statutory claims
(including New York State and City human rights laws),
we apply the reasoning of Gardner-Denver and find that
such a waiver is unenforceable.’ See Rogers, 220 F.3d at
75 (“When the arbitration provision has been negotiated
by a union in a CBA, these courts have held that
Gardner-Denver applies. The Second Circuit is no
7. We decline to adopt the approach set forth in Fletcher, 81
N.Y.2d at 632, 601 N.Y.S.2d at 690 (applying approach of Gilmer
in case involving union-negotiated waiver because FAA applied
to agreement at issue), which was decided before the Supreme
Court’s decision in Wright. Rather, we agree with the majority
of courts applying Wright that the basis for the distinction
between Gardner-Denver and Gilmer was not so much whether
or not the FAA applied but the identity of the party negotiating
the waiver. See, e.g., Rogers, 220 F.3d at 75 (noting that “most
lower courts have focused on the party negotiating the waiver of
rights”).
While some state courts have found such provisions to be
enforceable against state statutory claims, see, e.g., Garcia v.
Bellmarc Property Mgmt., 295 A.D.2d 233, 745 N.Y.S.2d 13 (1st
Dep’t 2002); Torres v. Four Seasons Hotel of New York, 277
A.D.2d 23, 715 N.Y.S.2d 28 (1st Dep’t 2000), they did so based on
their interpretation of the Supreme Court’s holding in Wright.
Until the Supreme Court speaks more clearly on this issue,
however, we are constrained to adopt the Second Circuit’s holding
in Rogers.
40a
Appendix C
exception.”); Beljakovic, 2005 WL 2709174, at *3
(“Simply put, there is no compelling authority for the
proposition that Gilmer overruled Alexander, and until
the Supreme Court clarifies that it has, this Court will
apply the law as it stands.” (citations and quotations
omitted)); see also Fowler, 2000 WL 1726687, at *1 (“The
Court of Appeals for the Second Circuit, however, has
expressly held that collective bargaining agreement
mandatory arbitration provisions cannot bar union
members from bringing federal claims to court”).
Defendant’s motion to dismiss plaintiff’s state
statutory claims therefore is denied.
CONCLUSION
For the reasons set forth above, defendant’s motion
to dismiss is denied. Counsel are directed to appear for
a conference on March 19, 2006 at 2:30pm.
SO ORDERED.
Dated: New York, New York
February 22, 2006
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE
4la
APPENDIX D — AFFIDAVIT OF
LARRY ENGELSTEIN
DATED NOVEMBER 21, 2005
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
04 CIV. 07536 (N RB)
STEVEN PYETT, THOMAS O’CONNELL AND
MICHAEL PHILLIPS,
PLAINTIFFS,
V.
PENNSYLVANIA BUILDING COMPANY,
14 PENN PLAZA LLC, AND
TEMCO SERVICE INDUSTRIES, INC.
DEFENDANTS.
STATE OF NEW YORK _)
)
COUNTY OF NEW YORK )
ECF CASE
AFFIDAVIT OF
LARRY ENGELSTEIN
42a
Appendix D
LARRY ENGELSTEIN, ESQ., being duly sworn,
deposes and says:
1. I am currently employed as General Counsel] of
Local 32BJ, Service Employees International Union (the
“Union”). As such, I am familiar with the circumstances
of the arbitration before Arbitrator Pfeffer in the above
identified matter and make this affidavit upon
information directly known by me.
2. The Union withdrew any contractual grievance
related to Plaintiffs’ age discrimination claim before the
arbitration hearing concluded.
3. The Union consents to the use of the Office of the
Contract Arbitrator (OCA), created under the Collective
Bargaining Agreement between the Realty Advisory
Board of Labor Relations, Inc. and the Union, as the
forum for Plaintiffs’ private attorney to pursue Plaintiffs’
statutory age discrimination claims, as long as the
parties to this lawsuit, and not the Union, pay the costs
associated with the arbitration.
s/ Larry Engelstein
Larry Engelstein, Esq.
43a
APPENDIX E — EXCERPTS FROM THE
2005 CONTRACTORS AGREEMENT
2005
Contractors
AGREEMENT
BETWEEN
Service Employees
International Union
Local 32BJ AFL-CIO
AND
THE REALTY ADVISORY
BOARD ON LABOR
RELATIONS INC.
EFFECTIVE OCTOBER 1, 2004
TO DECEMBER 31, 2007
* * *
ARTICLE VI
Arbitration
1. There shall at all times be a Contract Arbitrator
to decide all differences arising between the parties as
to interpretation, application or performance of any part
of this Agreement and such other issues as the parties
are expressly required to arbitrate before him under the
terms of this Agreement.
44a
Appendix E
2. The fee of the Contract Arbitrator and all
reasonable expenses involved in his functions shall be
borne fifty percent (50%) by tne Employer and fifty
percent (50%) by the Union, except that in the event the
Employer is in violation of any obligation under the
provisions relating to the Health, Pension, Training,
Legal and/or SRSF Funds, wages, dues and initiation
fees, or any other violations involving damages, then the
Employer shall pay the full fee of the Contract Arbitrator
and all expenses in connection with the arbitration of
the dispute, including, but not limited to, counsel fees,
auditor’s fees, arbitration costs and fees and court costs,
plus a minimum of fifteen percent (15%) per annum on
all monies awarded by the Contract Arbitrator.
3. The Arbitrator shall initially schedule a hearing
after either party has served written notice upon the
other that the grievance procedure has not resulted in
an adjustment. The oath-taking and the period and the
requirements for service of notice in the form prescribed
by statute are hereby waived. The Arbitrator’s award
shall be made within thirty (30) days after the hearing
closes. If the Arbitrator shall fail to render his written
award within said thirty-day period, either party may
serve a written demand upon him that the award must
be made within ten (10) days after said demand. The
decision shall be rendered within such additional ten (10)
day period unless the parties consent to an extension in
writing or an illness of the Arbitrator delays such
decision. By mutual consent, the time of both the hearing
and decision may be extended in a particular case. In
the event of a willful default by either party in appearing
45a
Appendix E
before the Arbitrator, after due written notice shall have
been given to him, the Arbitrator is authorized to render
his award upon the testimony of the adversary party.
Due written notice means mailing, faxing,
telegraphing or hand delivery to the address of the
employer furnished to the Union by the RAB.
4. The procedure herein outlined in respect to
matters over which the Contract Arbitrator has
jurisdiction shall be the sole and exclusive method for
the determination of all such issues, and said Arbitrator
shall have the power to grant any remedy required to
correct a violation of this Agreement, including, but not
limited to, damages and mandatory orders, and said
Arbitrator shall have the further power in cases of willful
violations (violations reflective of a deliberate intent to
violate this Agreement) to award appropriate remedies,
including, but not limited to, damages, all costs and
expenses incurred by the Union in the processing of the
grievance and arbitration proceedings, and to issue
mandatory orders, the award of the Arbitrator being
final and binding upon the parties and the employee(s)
involved; provided, however, that nothing herein shall
be construed to forbid either of the parties from
resorting to court for relief from, or to enforce rights
under, any arbitration award.
5. If any proceeding to confirm an award, service
may be made by registered or certified mail within or
without the State of New York as the case may be.
46a
Appendix E
6. Should either party fail to abide by an arbitration
award within two (2) weeks after such award is sent by
registered or certified mail to the parties, either party
may, in its sole and absolute discretion, take any action
necessary to secure such award, including, but not
limited to, suits at law. Should either party bring such
Suit, it shall be entitled, if it succeeds, to receive from
the other party all expenses for counsel fees and court
costs.
7. Grievants attending grievances and arbitrations
during their regularly scheduled hours shall be paid
during such attendance. If a grievant requires any
employee of the building to be a witness at the hearing
and the Employer adjourns the hearing, the employee
witness shall be paid by the Employer for his regularly
scheduled hours during attendance at such hearing. This
provision shall] be limited to one employee witness.
No more than one adjournment per party shall be
granted by the Arbitrator without the consent of the
opposing party.
All Union claims are brought by the Union alone,
and no individual shall have the right to compromise or
settle any claim without the written permission of the
Union.
In the event that the Union appears at an arbitration
without the grievant, the Arbitrator shall conduct the
hearing provided it is not adjourned. The Arbitrator shall
decide the case based upon the evidence adduced at the
hearing.
47a
Appendix F.
There is presently an Office of the Contract
Arbitrator-Building Service Industry as contract
arbitrator for all disputes. It is agreed by the parties
hereto that the arbitrators serving such office shall also
serve as contract arbitrators under this Agreemert. The
arbitrators currently are:
John Anner, Stuart Bauchner, Noel Berman,
Nicholas Cooney, John Dorsey, Howard Edelman,
Robert Herzog, Theodore Lang, Marilyn Levine, Randi
Lowitt, Earl Pfeffer and Bernard Young.
Upon thirty (30) days written notice to each other,
either the Union or the RAB may terminate the services
of any Arbitrator on the panel. Successor or additional
Arbitrators shall be appointed by mutual agreement of
the Union and the RAB. In the event of the removal,
death or resignation of all of the Arbitrators, the
successors or temporary substitute shall be chosen by
the Union and the RAB. If the parties are unable to agree
on asuccessor, then the Chairman of the New York State
Employment Relations Board shall appoint a successor
after consultation with the parties.
The costs of the Office of the Contract Arbitrator
shall be shared equally in a manner determined by the
Union and the RAB.
48a
Appendix E
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
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, New Jersey Law Against Discrimination, New
Jersey Conscientious Employee Protection Act,
Connecticut Fair Employer Practices Act, or any other
similar laws, rules or regulations. All such claims shall
be subject to the grievance and arbitration procedure
(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.
* * ~ +
49a
APPENDIX F — 9 U.S.C. 88 3 & 4
9 U.S.C. § 3
§ 3. Stay of proceedings where issue therein referable
to arbitration
If any suit or proceeding be brought in any of
the courts of the United States upon any issue
referable to arbitration under an agreement
in writing for such arbitration, the court in
which such suit is pending, upon being
satisfied that the issue involved in such suit
or proceeding is referable to arbitration under
such an agreement, shall on application of one
of the parties stay the trial of the action until
such arbitration has been had in accordance
with the terms of the agreement, providing the
applicant for the stay is not in default in
proceeding with such arbitration.
50a
Appendix F
9U.S.C.§ 4
§ 4. Failure to arbitrate under agreement; petition to
United States court having jurisdiction for order to
compel arbitration; notice and service thereof; hearing
and determination
A party aggrieved by the alieged failure,
neglect, or refusal of another to arbitrate
under a written agreement for arbitration may
petition any United States district court
which, save for such agreement, would have
jurisdiction under Title 28 [28 USCS §§ 1
et seq.], in a civil action or in admiralty of the
subject matter of a suit arising out of the
controversy between the parties, for an order
directing that such arbitration proceed in the
manner provided for in such agreement. Five
days’ notice in writing of such application shal]
be served upon the party in default. Service
thereof shall be made in the manner provided
by the Federal Rules of Civil Procedure
[USCS Rules of Civil Procedure]. The court
shall hear the parties, and upon being satisfied
that the making of the agreement for
arbitration or the failure to comply therewith
is not in issue, the court shall make an order
directing the parties to proceed to arbitration
in accordance with the terms of the agreement.
The hearing and proceedings, under such
agreement, shall be within the district in which
the petition for an order directing such
Sla
Appendix F
arbitration is filed. If the making of the
arbitration agreement or the failure, neglect,
or refusal to perform the same be in issue, the
court shall proceed summarily to the trial
thereof. If no jury trial be demanded by the
party alleged to be in default, or if the matter
in dispute is within admiralty jurisdiction, the
court shall hear and determine such issue.
Where such an issue is raised, the party
alleged to be in default may, except in cases of
admiralty, on or before the return day of the
notice of application, demand a jury trial of
such issue, and upon such demand the court
shall make an order referring the issue or
issues to a jury in the manner provided by the
Federal Rules of Civil Procedure [USCS Rules
of Civil Procedure], or may specially call a jury
for that purpose. If the jury find that no
agreement in writing for arbitration was made
or that there is no default in proceeding
thereunder, the proceeding shall be dismissed.
If the jury find that an agreement for
arbitration was made in writing and that there
is a default in proceeding thereunder, the court
shall make an order summarily directing the
parties to proceed with the arbitration in
accordance with the terms thereof.
52a
APPENDIX G — 29 U.S.C. $§ 621, 623(a), 626, 630
29 U.S.C. § 621
§ 621. Congressional statement of findings and purpose
(a) The Congress hereby finds and declares
that—
(1) in the face of rising productivity and
affluence, older workers find themselves
disadvantaged in their efforts to retain
employment, and especially to regain
employment when displaced from jobs;
(2) the setting of arbitrary age limits
regardless of potential for job performance
has become a common practice, and certain
otherwise desirable practices may work to
the disadvantage of older persons;
(3) the incidence of unemployment,
especially long-term unemployment with
resultant deterioration of skill, morale, and
employer acceptability is, relative to the
younger ages, high among older workers;
their numbers are great and growing; and
their employment problems grave;
(4) the existence in industries affecting
commerce, of arbitrary discrimination in
employment because of age, burdens
commerce and the free flow of goods in
commerce.
S3a
Appendix G
(b) It is therefore the purpose of this Act
[29 USCS §§ 621 et seq.;] to promote
employment of older persons based on their
ability rather than age; to prohibit arbitrary
age discrimination in employment; to help
employers and workers find ways of meeting
problems arising from the impact of age on
employment.
29 U.S.C. § 623
§ 623. Prohibition of age discrimination
(a) Employer practices. It shall be unlawful
for an employer—
(1) to fail or refuse to hire or to
discharge any individual or otherwise
discriminate against any individual with
respect to his compensation, terms,
conditions, or privileges of employment,
because of such individual’s age;
(2) to limit, segregate, or classify his
employees im any way which would deprive
or tend to deprive any individual of
employment opportunities or otherwise
adversely affect his status as an employee,
because of such individual’s age; or
(3) to reduce the wage rate of any
employee in order to comply with this Act.
S4a
Appendix G
29 U.S.C. § 626
§ 626. Recordkeeping, investigation, and enforcement
(a) Attendance of witnesses; investigations,
inspections, records, and homework
regulations. The Secretary [Commission]
shall have the power to make investigations
and require the keeping of records necessary
or appropriate for the administration of this
Act in accordance with the powers and
procedures provided in sections 9 and 11 of
the Fair Labor Standards Act of 1938, as
amended (29 U.S.C. 209 and 211).
(b) Enforcement; prohibition of age
discrimination under fair labor standards;
unpaid minimum wages and unpaid overtime
compensation; liquidated damages; judicial
relief; conciliation, conference, and persuasion.
The provisions of this Act shall be enforced in
accordance with the powers, remedies, and
procedures provided in sections 11(b), 16
(except for subsection (a) thereof), and 17 of
the Fair Labor Standards Act of 1938, as
amended (29 U.S.C. 211(b), 216, 217), and
subsection (c) of this section. Any act
prohibited under section 4 of this Act
[29 USCS § 623] shall be deemed to be a
prohibited act under section 15 of the Fair
Labor Standards Act of 1938, as amended
(29 U.S.C. 215). Amounts owing to a person
=
55a
Appendix G
as a result of a violation of this Act shall be
deemed to be unpaid minimum wages or
unpaid overtime compensation for purposes of
sections 16 and 17 of the Fair Labor Standards
Act of 1938, as amended (29 U.S.C. 216, 217):
Provided, That liquidated damages shall be
payable only in cases of willful violations of this
Act In any action brought to enforce this Act
the court shall have jurisdiction to grant such
lega! or equitable relief as may be appropriate
to effectuate the purposes of this Act,
including without limitation judgments
compelling employment, reinstatement or
promotion, or enforcing the liability for
amounts deemed to be unpaid minimum wages
or unpaid overtime compensation under this
section. Before instituting any action under
this section, the Secretary [Commission] shall
attempt to eliminate the discriminatory
practice or practices alleged, and to effect
voluntary compliance with the requirements
of this Act through informal methods of
conciliation, conference, and persuasion.
(ec) Civil actions; persons aggrieved;
jurisdiction; judicial relief; termination of
individual action upon commencement of
action by Secretary [Commission]; jury trial.
(1) Any person aggrieved may bring
a civil action in any court of competent
jurisdiction for such legal! or equitable
56a
Appendix G
relief as will effectuate the purposes of this
Act: Provided, That the right of any person
to bring such action shall terminate upon the
commencement of an action by the Secretary
[Commission] to enforce the right of such
employee under this Act.
(2) In an action brought under
paragraph (1), a person shall be entitled to a
trial by jury of any issue of fact in any such
action for recovery of amounts owing as a
result of a violation of this Act, regardless of
whether equitable relief is sought by any
party in such action.
(d) Filing of charge with Secretary
[Commission]; timeliness; conciliation,
conference, and persuasion. No civil action may
be commenced by an individual under this
section until 60 days after a charge alleging
unlawful discrimination has been filed with the
Secretary [Commission]. Such a charge shall be
filed—
(1) within 180 days after the alleged
unlawful practice occurred; or
(2) in a case to which section 14(b)
(29 USCS § 633(b)] applies, within 300 days
after the alleged unlawful practice occurred,
or within 30 days after receipt by the
individual of notice of termination of
proceedings under State law, whichever is
earlier.
57a
Appendix G
Upon receiving such a charge, the Secretary
[Commission] shall promptly notify all persons
named in such charge as prospective defendants
in the action and shall promptly seek to eliminate
any alleged unlawful practice by informal
methods of conciliation, conference, and
persuasion.
(e) Reliance on administrative rulings; notice of
dismissal or terminav.on; civil action after receipt
of notice. Section 10 of the Portal-to-Portal Act
of 1947 [29 USCS § 259] shall apply to actions
under this Act. If a charge filed with the
Commission under this Act is dismissed or the
proceedings of the Commission are otherwise
terminated by the Commission, the Commission
shall notify the person aggrieved. A civil action
may be brought under this section by a person
defined in section 1l(a) [29 USCS §$ 630(a)]
against the respondent named in the charge
within 90 days after the date of the receipt of
such notice.
(f) Waiver.
(1) An individual may not waive any
right or claim under this Act unless the
waiver is knowing and voluntary. Except as
provided in paragraph (2), a waiver may not
be considered knowing and voluntary unless
at a minimum—
(A) the waiver is part of an agreement
between the individual and the employer
58a
Appendix G
that is written in a manner calculated to be
understood by such individual, or by the
average individual eligible to participate;
(B) the waiver specifically refers to
rights or claims arising under this Act;
(C) the individual does not waive rights
or claims that may arise after the date the
waiver is executed;
(D) the individual waives rights or
claims only in exchange for consideration
in addition to anything of value to which the
individual already is entitled;
(E) the individual is advised in writing
to consult with an attorney prior to
executing the agreement;
(F) (i) the individual is given a period
of at least 21 days within which to consider
the agreement; or
(ii) if a waiver is requested in
connection with an exit incentive or other
employment termination program
offered to a group or class of employees,
the individual is given a period of at least
45 days within which to consider the
agreement;
(G) the agreement provides that for a
period of at least 7 days following the
59a
Appendix G
execution of such agreement, the individual
may revoke the agreement, and the
agreement shall not become effective or
enforceable until the revocation period has
expired;
(H) if a waiver is requested in
connection with an exit incentive or other
employment termination program offered
to a group or class of employees, the
employer (at the commencement of the
period specified in subparagraph (F))
informs the individual in writing in a
manner calculated to be understood by the
average individual eligible to participate, as
a
(i) any class, unit, or group of
individuals covered by such program, any
eligibility factors for such program, and
any time limits applicable to such
program; and
(ii) the job titles and ages of all
individuals eligible or selected for the
program, and the ages of all individuals
in the same job classification or
organizational unit who are not eligible
or selected for the program.
(2) A waiver in settlement of a
charge filed with the Equal Employment
Opportunity Commission, or an action filed
60a
Appendix G
in court by the individual or the individual’s
representative, alleging age discrimination
of a kind prohibited under section 4 or 15
{29 USCS § 623 or 633a] may not be
considered knowing and voluntary unless at
a minimum—
(A) subparagraphs (A) through (E) of
paragraph (1) have been met; and
(B) the individual is given a
reasonable period of time within which to
consider the settlement agreement.
(3) In any dispute that may arise over
whether any of the requirements, conditions,
and circumstances set forth in subparagraph
(A), (B), (C), (D), CE), (F), (G), or (AH) of
paragraph (1), or subparagraph (A) or (B) of
paragraph (2), have been met, the party
asserting the validity of a waiver shall have
the burden of proving in a court of competent
jurisdiction that a waiver was knowing and
voluntary pursuant to paragraph (1) or (2).
(4) No waiver agreement may affect the
Commission’s rights and responsibilities to
enforce this Act. No waiver may be used to
justify interfering with the protected right
of an employee to file a charge or participate
in an investigation or proceeding conducted
by the Commission.
6la
Appendix G
29 U.S.C. § 630
§ 630. Definitions
For the purposes of this Act [29 USCS §§ 621 et seq.]—
(a) The term “person” means one or more
individuals, partnerships, associations, labor
organizations, corporations, business trusts,
legal representatives, or any organized groups
of persons.
(b) The term “employer” means a person
engaged in an industry affecting commerce who
has twenty or more employees for each working
day in each of twenty or more calendar weeks in
the current or preceding calendar year:
Provided, That prior to June 30, 1968, employers
having fewer than fifty employees shall not be
considered employers. The term also means
(1) any agent of such a person, and (2) a State or
political subdivision of a State and any agency
or instrumentality of a State or a political
subdivision of a State, and any interstate agency,
but such term does not include the United
States, or a corporation wholly owned by the
Government of the United States.
(c) The term “employment agency” means any
person regularly undertaking with or without
compensation to procure employees for an
employer and includes an agent of such a person;
but shall not include an agency of the United
States.
62a
Appendix G
(d) Theterm “labor organization” means a labor
organization engaged in an industry affecting
commerce, and any agent of such an
organization, and includes any organization
of any kind, any agency, or employee
representation committee, group, association, or
plan so engaged in which employees participate
and which exists for the purpose, in whole or in
part, of dealing with employers concerning
grievances, labor disputes, wages, rates of pay,
hours, or other terms or conditions of
employment, and any conference, general
committee, joint or system board, or joint council
so engaged which is subordinate to a national or
international labor organization.
(e) A labor organization shall be deemed to be
engaged in an industry affecting commerce if
(1) it maintains or operates a hiring hall or hiring
office which procures employees for an employer
or procures for employees opportunities to work
for an employer, or (2) the number of its
members (or, where it is a labor organization
composed of other labor organizations or their
representatives, if the aggregate number of the
members of such other labor organization) is
fifty or more prior to July 1, 1968, or twenty-
five or more on or after July 1, 1968, and such
labor organization—
(1) is the certified representative of
employees under the provisions of the
63a
Appendix G
National Labor Relations Act, as amended,
or the Railway Labor Act, as amended; or
(2) although not certified, is a national
or international labor organization or a local
labor organization recognized or acting as
the representative of employees of an
employer or employers engaged in an
industry affecting commerce; or
(3) has chartered a local labor
organization or subsidiary body which is
representing or actively seeking to
represent employees of employers within
the meaning of paragraph (1) or (2); or
(4) has been chartered by a labor
organization representing or actively
seeking to represent employees within the
meaning of paragraph (1) or (2) as the local
or subordinate body through which such
employees may enjoy membership or
become affiliated with such labor
organization; or
(5) is aconference, general committee,
joint or system board, or joint council
subordinate to a national or international
labor organization, which includes a labor
organization engaged in an industry
affecting commerce within the meaning of
any of the preceding paragraphs of this
subsection.
64a
Appendix G
(f) The term “employee” means an individual
employed by any employer except that the term
“employee” shall not include any person elected
to public office in any State or political
subdivision of any State by the qualified voters
thereof, or any person chosen by such officer to
be on such officer’s personal staff, or an
appointee on the policymaking level or-an
immediate adviser with respect to the exercise
of the constitutional or legal powers of the office.
The exemption set forth in the preceding
sentence siiall not include employees subject to
the civil service laws of a State government,
governmental agency, or political subdivision.
The term “employee” includes any individual
who is a citizen of the United States employed
by an employer in a workplace in a foreign
country.
(g) The term “commerce” means trade, traffic,
commerce, transportation, transmission, or
communication among the several States; or
between a State and any place outside thereof;
or within the District of Columbia, or a
possession of the United States; or between
points in the same State but through a point
outside thereof.
(h) The term “industry affecting commerce”
means any activity, business, or industry in
commerce or in which a labor dispute would
hinder or obstruct commerce or the free flow of
6Sa
Appendix G
commerce and includes any activity or industry
“affecting commerce” within the meaning of the
Labor-Management Reporting and Disclosure
Act of 1959.
(i) The term “State” includes a State of the
United States, the District of Columbia, Puerto
Rico, the Virgin Islands, American Samoa,
Guam, Wake Island, the Canal Zone, and Outer
Continental Shelf lands defined in the Outer
Continental Shelf Lands Act.
(j) The term “firefighter” means an employee,
the duties of whose position are primarily to
perform work directly connected with the
control and extinguishment of fires or the
maintenance and use of firefighting apparatus
and equipment, including an employee engaged
in this activity who is transferred to a
supervisory or administrative position.
(k) The term “law enforcement officer” means
an employee, the duties of whose position are
primarily the investigation, apprehension, or
detention of individuals suspected or convicted
of offenses against the criminal] laws of a State,
including an employee engaged in this activity
who is transferred to a supervisory or
administrative position. For the purpose of this
subsection, “detention” includes the duties of
employees assigned to guard individuals
incarcerated in any penal institution.
66a
Appendix G
(1) The term “compensation, terms, conditions,
or privileges of employment” encompasses all
employee benefits, including such benefits
provided pursuant to a bona fide employee
benefit plan.
OPPOSITION
BRIEF
FILED
JAN 1 6 2008
S| No. 07-581 one
RT, U.S.
IN THE
Supreme Court of the United States
14 PENN PLAZA LLC and
TEMCO SERVICE INDUSTRIES, INC.,
Petitioners,
v.
STEVEN PYETT, THOMAS O’CONNELL,
and MICHAEL PHILLIPS,
Respondents.
ON PETITION FOR A Writ OF CERTIORARI TO THE
UnitTepD STATES Court OF APPEALS
FOR THE SECOND CIRCUIT
—- ——
ee —
BRIEF IN OPPOSITION
JEFFREY L. KREISBERG
KREISBERG & MAITLAND, LLP
116 John Street, Suite 1120
New York, New York 10038
(212) 629-4970
Counsel for Respondents
, '
214490 cr
rN SS wor
bed ,
SiAt) 444 eM
i
QUESTION PRESENTED
Whether the Court should grant the Petition herein
to resolve the question of whether Respondents’ union’s
third-party waiver of their right to sue in federal court
for violation of federal, state and city anti-discrimination
statutes, contained in the arbitration provision of the
collective bargaining agreement by which they were
covered, is enforceable, where the union did not submit
their age discrimination claims to arbitration?
l
INTRODUCTION
This is not the appropriate case for the Court to
determine whether a union negotiated waiver of its
members’ right to sue in federal court for alleged
violation of federal, state and city anti-discrimination
statutes, by requiring that such claims be submitted to
arbitration, is enforceable, since, in this case, the union,
after having initially submitted Respondents’ age
discrimination claims to arbitration, along with their
other contractual claims, withdrew the age
discrimination claims from arbitration. Then, after
Respondents filed their Federal lawsuit herein, the union
granted Respondents permission to litigate their age
discrimination claims before the same arbitrator who
heard their other contractual claims, but at their sole
cost and expense, and with their own attorney. Since
Respondents’ age discrimination claims were withdrawn
from arbitration by the union, the question of whether
Respondents are required to pursue those claims in
arbitration, rather than in a judicial forum, is not
properly raised and should not be considered by this
Cuurt.
Any determination by the Court of whether it should
go beyond its decision in Wright v. Universal Maritime
Service Corp., 525 U.S. 70 (1998), and hold that a clear
and unequivocal union negotiated waiver of an
employee’s rights to litigate federal statutory age
discrimination claims in a judicial forum contained in an
arbitration provision of a collective bargaining
agreement is enforceable against the covered employee,
should be made only in a case where the union has
actually submitted the discrimination claim for binding
arbitration under the clause, and not, as here, where the
2
claim was withdrawn from arbitration by the union prior
to decision by the arbitrator. The permission granted
by the union to Respondents, after they had already
commenced their federal court action, to pursue their
claims before the same arbitrator who heard their other
contractual claims, but at their own cost and expense,
and with their own privately retained counsel, merely
afforded Respondents an option as to whether to proceed
in court or before the arbitrator, but did not constitute
an exercise by the union of the collectively bargained
arbitration provision, thereby triggering the claimed
waiver contained therein. Under these circumstances,
the Court should deny the Petition and wait to resolve
the issue of the enforceability of a union negotiated
waiver contained in a mandatory arbitration provision
of a collective bargaining agreement for a case in which
arbitration has actually been invoked by the union to
resolve the discrimination claim.
STATEMENT OF THE CASE
Respondents, long term employees of Petitioners at
the Pennsylvania Building, known as 14 Penn Plaza, New
York, New York, on September 23, 2004, brought this
‘ claim under the Age Discrimination in Employment Act
of 1967, 29 U.S.C. § 621-634 (“ADEA”), the New York
State Human Rights Law, N.Y. Exec. Law § 290 et seg.,
and the New York City Administrative Code, N.Y.C.
Admin. Code § 8-107, alleging that they were
discriminated against in the terms and conditions of their
employment because of their age. Respondents alleged
that they were wrongfully replaced by much younger
workers, transferred to less desirable positions, and
suffered significant loss of income.
3
Petitioners moved in the district court to dismiss the
complaint for failure to state a claim, or in the alternative
to compel Respondents to litigate their age
discrimination claims under the arbitration provision of
the collective bargaining agreement between their union,
Local 32BJ Service Employees International Union, and
the Petitioners’ employer associations.
On May 31, 2006, the district court issued its
Memorandum and Order denying Petitioners’ motion to
dismiss or to compel arbitration. Petitioners then
appealed only the denial of their motion to compel
arbitration to the Court of Appeals for the Second
Circuit.
On August 1, 2007, the court of appeals affirmed the
district court’s denial of Petitioners’ motion to compel
arbitration, holding that under its determination in
Rogers v. New York University, 220 F:3d 73 (2d Cir.), cert.
denied, 531 U.S. 1036 (2000), the union’s third-party
waiver of Respondents’ right to bring their claims for
age discrimination under the ADEA, state and city laws
in federal court, was unenforceable. Rogers relied upon
this Court’s decision in Alerander v. Gardner-Denver
Co., 415 U.S. 5° (1974), for its holding.
REASONS FOR DENYING THE PETITION
Prior to commencing their federal! court action,
Respondents filed grievances with their union alleging
that their replacement by younger employees and
transfer to other positions violated several provisions of
the collective bargaining agreement, including the
provision which prohibited discrimination based upon
age. The union initially submitted all of Respondents’
grievances, including their claims of age discrimination,
4
to arbitration. However, shortly after the arbitration
hearing began, counsel for the union notified the
arbitrator and Respondents that their age discrimination
claims were withdrawn. Respondents’ remaining claims
proceeded to decision by the arbitrator, and were denied
by him.
After the union’s withdrawal of their age
discrimination claims from arbitration, Respondents
filed this action in the district court, alleging violation
by Petitioners of the ADEA, N.Y. Exec. Law and N.Y.C.
Admin. Code. In support of their motion in the district
court to compel arbitration, Petitioners submitted an
affidavit of Larry Engelstein, counsel for the union. The
affidavit confirmed that the union withdrew the
contractual grievance related to Respondents’ age
discrimination claims before the arbitration hearing
concluded. The affidavit also stated that
“(t]he Union consents to the use of the Office
of the Contract Arbitrator (OCA), created
under the Collective Bargaining Agreement
between the Realty Advisory Board of Labor
Relations, Inc. and the Union, as the forum
for Plaintiffs’ statutory age discrimination
claims, as long as the parties to this lawsuit,
ani not the Union, pay the costs associated
with the arbitration.”
Thus, it is clear that the union did not ultimately
submit Respondents’ age discrimination claims to
arbitration under the union negotiated arbitration
provision of the collective bargaining agreement. It is
only the union which is empowered to invoke the
arbitration provision of the collective bargaining
5
agreement, and it is only the submission of a dispute to
arbitration by the union which would trigger the
collective bargaining agreement waiver, even if the
waiver is found to be enforceable.
Since the union never submitted Respondents’ age
discrimination claims to arbitration, the union negotiated
collective bargaining agreement waiver of their right to
sue in court for alleged violations of the ADEA, state
and city anti-discrimination statutes, is clearly
unenforceable herein, and may not be relied upon by
Petitioners to preclude them from litigating their age
discrimination claims in a judicial forum.
Under these circumstances, this is not the
appropriate case in which to determine whether a union
negotiated waiver of its members’ right to sue under
federal anti-discrimination statutes contained in an
arditration provision of a collective bargaining
agreement is enforceable against them.
CONCLUSION
Petitioners have not demonstrated that it is
appropriate for this Court to grant the Petition.
Therefore, Respondents respectfully request that the
Petition be denied.
Respectfully submitted,
JEFFREY L. KREISBERG
KREISBERG & MaiTLanp, LLP
116 John Street, Suite 1120
New York, New York 10038
(212) 629-4970
Counsel for Respondents
No. 07-581
IN THE
Supreme Court of the United State
14 PENN PLAZA LLC and
TEMCO SERVICE INDUSTRIES, INC.,
Petitioners,
v.
STEVEN PYETT, THOMAS O’CONNELL,
and MICHAEL PHILLIPS,
Respondents.
On PETITION FOR A Writ OF CERTIORARI TO THE
UNITED StaTES Court OF APPEALS
FOR THE SECOND CIRCUIT
REPLY BRIEF
|
JAMES F: BERG PAUL SALVATORE*
HOWARD ROTHSCHILD Mark D. Harris
REALTY ADVISORY BOARD ON LaBoR BRIAN S.. Raucu
RELATIONS, INC. IAN C. SCHAEFER
292 Madison Avenue PROSKAUER Rose LLP
New York, NY 10017 1585 Broadway
(212) 889-4100 New York, NY 10036
Counsel for Petitioner (212) 969-3000
Temco Service Industries, Inc. Counsel for Petitioner
14 Penn Plaza LLC
* Counsel of Record
213739 g
COUNSEL PRESS
(800) 274.332. + (800) 359-6859
i
CORPORATE DISCLOSURE STATEMENT
Petitioners’ Corporate Disclosure Statement was set
forth at page 7 of its Petition for a Writ of Certiorari,
and there are no amendments to that Statement.
il
TABLE OF CONTENTS
Page
CORPORATE DISCLOSURE STATEMENT . i
pe ge): rere ii
TABLE OF CITED AUTHORITIES ......... iil
EE nk cb chases cduseadanensicdclaens 1
I. It Is Undisputed That Whether Union-
Negotiated Arbitration Agreements Are
Enforceable Is A Critical Question. ..... 1
II. This Case Is An Excellent Vehicle To
Decide Whether A Union-Negotiated
Agreement To Arbitrate Statutory Claims
PE, ndaceuenceececeeens san ax 3
EE Sitvides Kcneddniesesanaeaewes 7
iil
TABLE OF CITED AUTHORITIES
\
CASES |
Aleman v. Chugach Support Servs., Inc.,
485 F.3d 206 (4th Cir. 2007) ................
Gilmer v. Interstate/Johnson Lane Corp.,
ES db cae tudeenduchade+sans
Howsani v. Dean Witter Reynolds, Inc.,
ee ee PD hn ade waeKeshnustscseeve
Kravar v. Triangle Servs., Inc.,
509 F. Supp. 2d 407 (S.D.N.Y. 2007) ........
Manigault v. Macy’s East, LLC,
506 F. Supp. 2d 156 (E.D.N.Y. 2007) ........
Marquez v. Screen Actors Guild,
SP PED oS hhdbanecesesseccadeaves
Selmanovic v. NYSE Group, Inc.,
No. 06 Civ. 3046, 2007 U.S. Dist. LEXTS 94963
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Vaca v. Sipes,
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Cited Authorities
Page
STATUTES AND OTHER AUTHORITIES
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Transcribed Recording of Oral Argument
Before the Second Circuit,
Pyett v. Pa. Bldg. Co., 06-3047-cv(L),
ee 2
1
Nothing in Respondents’ brief challenges the
fundamental importance or the timeliness of the question
presented by this case: Whether unions may waive their
members’ rights to a federal forum for their statutory
discrimination claims in exchange for other benefits
offered by employers. Respondents’ only argument is
that they believe this is not an appropriate case to decide
that question, although their reasons are unclear. In fact,
none of Respondents’ arguments calls into question the
certworthiness of this case.
ARGUMENT
I. ItIs Undisputed That Whether Union-Negotiated
Arbitration Agreements Are Enforceable Is A
Critical Question.
Respondents do not dispute that whether union-
negotiated arbitration agreements are enforceable is a
fundamental and urgent question this Court should
resolve. They do not dispute that there is a deep and
irreconcilable split between the Circuits on this issue —
which has lasted for more then a decade — with the Fourth
Circuit repeatedly holding that such agreements are
enforceable so long as the waiver language is clear and
unmistakable, and the Second and some other Circuits
ruling that such agreements are never enforceable under
any circumstances. Respondents do not deny that there
is an unresolved tension in this Court’s own precedents
as this Court itself has recognized. And they do not
question that the conflict among the lower courts has
adversely affected labor relations among employers,
2
unions, and unionized employees, who currently must
bargain against a backdrop of uncertainty about the law.!
There is no reason to expect that the conflict will
diminish over time or that the issue will not recur. In
the short time since the Second Circuit’s decision below,
two district courts have blocked similar arbitration
agreements from taking effect. See Selmanovic v. NYSE
Group, Inc., No. 06 Civ. 3046, 2007 U.S. Dist. LEXIS
94963, at *24(S.D.N.Y. Dec. 20, 2007); Kravar v. Triangle
Servs., Inc., 509 F. Supp. 2d 407 (S.D.N.Y. 2007) (holding
that even pendent state-law discrimination claims that
would be arbitrable in the New York State courts may
not be the subject of a union-negotiated waiver of a
federal judicial forum); see also Manigault v. Macy’s
East, LLC, 506 F. Supp. 2d 156, 160 (E.D.N.Y. 2007)
(citing holding in decision below in non-collective
bargaining context). As these cases demonstrate, the
Second Circuit’s decision continues to disrupt the
legitimate expectations of parties to the collective
bargaining process. Only a ruling from this Court can
settle this matter.
—_——-—— — —_—_— —
' Indeed, at oral argument before the Second Circuit,
counsel for Respondents candidly remarked: “Whether or not
the table is or is not set for changing the law - it is only the
Supreme Court that can eat at that table.” Transcribed
Recording of Oral Argument Before the Seeond Circuit, Pyett v
Pa. Bidg. Co. , 06-3047-ev( L) (2d Cir. June 27, 2007).
3
II. This Case Is An Excellent Vehicle To Decide
Whether A Union-Negotiated Agreement To
Arbitrate Statutory Claims Is Enforceable.
Unable to deny that the legal question at stake is
critically important, Respondents instead claim that this
case is somehow not the right vehicle for resolving that
question because of its procedural history. In August
2003, Respondents filed their grievances with the Union
under the collective bargaining agreement (“CBA”),
alleging both statutory age discrimination and
contractual violations, which grievances were submitted
to arbitration. App. 4a. In February 2004, shortly after
arbitration began, the Union withdrew their age
discrimination claims. While the remaining claims were
still pending before the arbitrator, Respondents filed the
instant action in federal court alleging age
discrimination. The arbitrator denied all contractual
claims in August 2005. Jd. at 5a.
Based on this chronology, Respondents assert that
the mandatory arbitration requirement of the CBA was
not “triggered,” because at the time Respondents filed
their federal complaint, the Union had already
withdrawn their age discrimination claims. Although the
crux of their argument is far from clear, Respondents
seem to believe that the arbitration requirement is
optional — if the Union chooses not to arbitrate, then
its members are not bound by the provision. Thus,
Respondents argue that this case is not a good vehicle
for resolution of the ultimate legal question, because even
if the arbitration provision is enforceable, it did not apply
to them.
4
This argument is factually and logically flawed. First,
there is no basis whatsoever for Respondents’ ipse dixit
that the mandatory arbitration provision only applies
when the Union submits claims before the arbitrator.
As quoted in the Petition, the CBA states: “All such
claims (of discrimination under federal, state, and local
law] shall be subject to the grievance and arbitration
procedure ... as the sole and exclusive remedy for
violations.” App. 48a (emphasis supplied). There is no
reference in the CBA to any “trigger” before the right
to a judicial forum is waived, and Respondents do not
cite any contractual language in support of their bald
claim. Neither court below found that the Union must
submit grievances to arbitration before judicial claims
are foreclosed. Indeed, Respondents’ perverse reading
of the CBA would undermine the very purpose of having
an arbitration provision in the first place. If the effect of
the Union declining to arbitrate grievances is that the
employees may litigate in federal court, then a judicial
forum waiver has little value. Respondents’ argument,
untethered to case law or contractual language, would
fundamentally alter the “preeminent” term and condition
of their employment. Aleman v. Chugach Support Servs.,
Inc., 485 F.3d 206, 215 (4th Cir. 2007) (Wilkinson, J.).”
oe
* If Respondents felt the Union’s withdrawal of their
discrimination claims was somehow unfair, the proper course of
action was to file a Duty of Fair Representation claim against
the Union, not to disregard their obligations pursuant to the
arbitration provision. See Marquez v. Sereen Actors Guild, 525
U.S. 33, 44 (1998); Vaea v. Sipes, 386 U.S. 171, 190 (1967). In
fact, Respondents did precisely that, only to later withdraw that
claim with prejudice. App. 17a-18a.
5
Second, the possibility that there is such a “trigger”
would not make this case any less certworthy. The upshot
of Respondents’ argument is that if this Court were to
find the arbitration provision enforceable, they would
still have a defense that the provision did not apply to
them. But a holding by this Court as to the enforceability
of such a provision would still be binding precedent for
all future cases. Ordinarily, the fact that another legal
defense exists at the trial level is not a reason to deny
certiorari, especially where the proceeding is under the
Federal Arbitration Act, which specifically contemplates
the immediate appeal of a denial of a motion to compel
arbitration, see 9 U.S.C. § 16(a)(1).
Respondents’ prudential argument is particularly
inappropriate in this context because the scope of an
enforceable arbitration agreement is a matter in the first
instance for the arbitrator, not for a court. That is,
questions of procedural arbitrability are not subject to
judicial review but instead are properly submitted to
an arbitrator as part of the grievance/arbitration
mechanism. As this Court has stated:
“tI]n the absence of an agreement to the
contrary, issues of substantive arbitrability . . .
are for a court to decide and issues of
procedural arbitrability, 7.e., whether
prerequisites such as time limits, notice,
laches, estoppel, and other conditions
precedent to an obligation to arbitrate have
been met, are for the arbitrators to decide.”
Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 85
(2002). Out of respect for the different roles played by
6
judicial actors and arbitrators, this Court should address
the important substantive arbitrability issue squarely
presented in the instant case without regard to any
arguments pertaining to procedural arbitrabilit; that
Respondents may make to an arbitrator in the course of
a later arbitration proceeding.
Contrary to Respondents’ suggestion, the
circumstances of this case in fact make it an ideal vehicle
for this Court to decide the question presented. The
union-negotiated arbitration agreement at issue clearly
and unmistakably waived their right to bring statutory
claims in
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