Opinion ID: 216851
Heading Depth: 2
Heading Rank: 1

Heading: Waiver and Preclusion of Statutory Claims

Text: Mathews's first argument on appeal is that the decision to submit his amended grievance to arbitration did not constitute a waiver of his right to litigate statutory discrimination and retaliation claims, and that the arbitral decision rendered on his grievance should not preclude the instant litigation. The issue is controlled by Gardner-Denver. In Gardner-Denver, the Supreme Court set forth several tenets regarding the relationship between contract-dispute arbitration and subsequent civil rights litigation. First, the Gardner-Denver Court stated that, while an employee may presumably waive his cause of action under Title VII... mere resort to the arbitral forum to enforce contractual rights constitutes no such waiver. 415 U.S. at 52, 94 S.Ct. 1011 (emphasis added). Second, where the arbitration agreement between the parties empowers the arbitrator to resolve only questions of contractual rights under a collective-bargaining agreement, such arbitrator's decision could not preclude the employee from later bringing his Title VII claims in federal court regardless of whether certain contractual rights are similar to, or duplicative of, the substantive rights secured by Title VII. Id. at 53-54, 94 S.Ct. 1011; see also 14 Penn Plaza, 129 S.Ct. at 1467 (discussing the holding of Gardner-Denver ). In Gardner-Denver, these basic rules combined to permit the plaintiff an opportunity to litigate Title VII claims against his employer despite having previously lost at arbitration on a grievance alleging unjust discharge in violation of the just cause provision of his collective-bargaining agreement. See 415 U.S. at 38-42, 94 S.Ct. 1011. Critically, the arbitration agreement in Gardner-Denver did not provide the arbitrator with authority to resolve questions of statutory rights. Id. at 53, 94 S.Ct. 1011. Under such circumstances, the arbitral decision had resolved only the contractual violations alleged by plaintiff, and the distinctly separate nature of [his] contractual and statutory rights [was] not vitiated merely because both were violated as a result of the same factual occurrence. Id. at 49, 94 S.Ct. 1011. The preclusive doctrines of election of remedies, waiver, res judicata, and collateral estoppel were therefore inapplicable in light of the collective-bargaining agreement's failure to address arbitration of Title VII claims. [3] 14 Penn Plaza, 129 S.Ct. at 1467 (explaining the reasoning behind Gardner-Denver 's holding); see also Gardner-Denver, 415 U.S. at 50 n. 10, 94 S.Ct. 1011 (The policy reasons for rejecting the doctrines of election of remedies and waiver in the context of Title VII are equally applicable to the doctrines of res judicata and collateral estoppel.). In addition to its core holding, the Gardner-Denver Court expressed doubts about the competence of arbitrators to evaluate and decide statutory claims, and about the validity of union-negotiated waivers of employees' federal forum rights for statutory claims. 415 U.S. at 51-52, 56-61, 94 S.Ct. 1011. In subsequent years, the Supreme Court has disavowed Gardner-Denver 's anti-arbitration language as misguided, [4] and clarified that an arbitration agreement can constitute an enforceable waiver of judicial forum for statutory civil rights claims regardless whether negotiated individually or collectively. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991) (holding individually negotiated arbitration agreement encompassing statutory claims enforceable); Wright v. Universal Maritime Service Corp., 525 U.S. 70, 80, 119 S.Ct. 391, 142 L.Ed.2d 361 (1998) (holding union-negotiated waiver of employees' right to judicial forum for statutory claims must be clear and unmistakable); 14 Penn Plaza, 129 S.Ct. 1456 (2009) (holding union-negotiated waiver of employees' right to judicial forum for statutory claims enforceable where waiver was clear and unmistakable). Gardner-Denver 's core holding, however, that the decision to arbitrate an employee's contractual claim by itself neither waives nor precludes the subsequent litigation of statutory claims arising out of the same underlying facts, remains intact. See 14 Penn Plaza, 129 S.Ct. at 1467. As the law now stands, both individual employees and unions may prospectively agree with the employer to arbitrate all employment-related disputes, including statutory rights normally enforced through litigation, but only so long as this intention is clearly expressed. See id. at 1465; Gilmer, 500 U.S. at 26, 111 S.Ct. 1647. The continued vitality of Gardner-Denver in cases where the parties had not agreed to arbitrate statutory claims was most recently affirmed by the Supreme Court in 14 Penn Plaza v. Pyett, 556 U.S. 247, 129 S.Ct. 1456, 173 L.Ed.2d 398 (2009). There, the plaintiffs' collective-bargaining agreement contained the following language: There shall be no discrimination against any present or future employee by reason of race, creed, color, age, disability, national origin, sex, union membership, or any other characteristic protected by law, including, but not limited to, claims made pursuant to Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act.... All such claims shall be subject to the grievance and arbitration procedures (Article V and VI) as the sole and exclusive remedy for violations. Id. at 1461. Despite this explicit language, the 14 Penn Plaza plaintiffs filed a complaint against their employer in federal court, alleging violations of their rights under the Age Discrimination in Employment Act. Citing the terms of the collective-bargaining agreement, the defendant-employer sought dismissal of the complaint and an order compelling the plaintiffs to submit their claims to arbitration. Although the district court and Second Circuit concluded that Gardner-Denver controlled (rendering the collective-bargaining agreement's waiver of federal forum ineffective), the Supreme Court reversed and held the provision enforceable. Id. at 1463. Gardner-Denver, the Supreme Court explained, denied preclusive effect to a prior arbitral decision because the collective-bargaining agreement did not cover statutory claims. Id. at 1467. It therefore followed that the Gardner-Denver arbitrator could not decide questions of statutory rights regardless whether the plaintiff's contractual rights [were] similar to, or duplicative of, the substantive rights secured by Title VII. Id. (quoting Gardner-Denver, 415 U.S. at 53-54, 94 S.Ct. 1011). This jurisprudence remained sound, but does not control the outcome where ... the collective-bargaining agreement's arbitration provision expressly covers both statutory and contractual discrimination claims.  Id. at 1469 (emphasis added). Because the collective-bargaining agreement in 14 Penn Plaza did expressly cover statutory claims, Gardner-Denver had no bearing and the terms of the arbitration agreement controlled. Id. at 1466-69. This body of precedent determines the outcome of Mathews's current challenge, and the district court correctly recognized that the crucial inquiry is whether the CBA's arbitration provisions covered Mathews's statutory claims. It noted that Article II, Section 11 of the CBA provided contractual guarantees against discrimination precisely coterminous with those given in federal law, and that Mathews and the Agency both treated this provision as doing nothing more than recognizing actions or omission that would otherwise constitute statutory violations as also violations of their agreement. From this, the district court concluded the parties recognized that the CBA's arbitration agreement covered Plaintiff's statutory claims, placing the case within 14 Penn Plaza 's holding rather than Gardner-Denver 's. The court concluded Mathews's prior submission to arbitration therefore constituted a waiver of his right to seek a judicial remedy. Nothing in the record supports the district court's logical jump. Although the parties acknowledged that violations of statutory law would also constitute violations of the contract, this does not mean that the CBA covered statutory claims or that the parties believed it to do so. Indeed, the district court's conclusion ignores the distinctly separate nature of contractual and statutory rights, which is not vitiated merely because both were violated as a result of the same factual occurrence. Gardner-Denver, 415 U.S. at 50, 94 S.Ct. 1011. This reasoning does not change even though the contours of the CBA's anti-discrimination protections were defined by reference to federal law. See id. at 54, 94 S.Ct. 1011. Rather, unionized employees of the Agency subjected to discriminatory treatment hold two similar claims, one based in statute, and one based in contract. The operative question remains whether the CBA's arbitration provisions are broad enough to encompass Mathews's statutory claims, such that his submission to arbitration operated as a waiver of forum or election of remedy. Applying Supreme Court precedent to the facts of Mathews's case, it is evident no waiver of judicial forum has occurred. Again, such a waiver may only occur where the arbitration agreement expressly grants the arbitrator authority to decide statutory claims. See 14 Penn Plaza, 129 S.Ct. at 1469; Wright, 525 U.S. at 70-80, 119 S.Ct. 391. The arbitration clause of the CBA, from which the arbitrator derived all authority, states that [t]he arbitrator shall have no power to add to, subtract from, change or modify any provision of this Agreement, but shall be authorized only to resolve the dispute submitted to him or her.  CBA, Article XIII (emphasis added). The dispute submitted to arbitration by Mathews asserted a violation of Article II, Section 11 of the CBA and a vague complaint of retaliation, but no statutory claims under Title VII or 42 U.S.C. § 1981. Because the arbitration agreement empowered the arbitrator to resolve only the dispute submitted, and because the dispute submitted made no mention of statutory claims, the arbitral decision could in no way determine the question of Mathews's statutory rights. Appropriately, the Agency's representative at arbitration agreed that the issue before the arbitrator was whether the company discriminate[d] against Mr. Mathews in violation of Section 11, Article II of the contract,  and the arbitral decision phrased the question decided strictly in terms of Mathews's contractual rights under the CBA ([D]id GRIEVANT'S demotion violate the contractual provisions prohibiting discrimination?) (emphases added). Thus, the relevant facts of Mathews's case precisely track those of Gardner-Denver. There, as here, no waiver of the right to litigate statutory claims has occurred, because mere resort to the arbitral forum to enforce contractual rights constitutes no such waiver. Gardner-Denver, 415 U.S. at 52, 94 S.Ct. 1011. That Mathews's contractual rights and statutory rights were coterminous is of no moment: As the Supreme Court has recently reaffirmed, [b]ecause the collective-bargaining agreement gave the arbitrator `authority to resolve only questions of contractual rights,' his decision could not prevent the employee from bringing the Title VII claim in federal court ` regardless of whether certain contractual rights are similar to, or duplicative of, the substantive rights secured by Title VII. ' 14 Penn Plaza, 129 S.Ct. at 1467 (emphasis added) (quoting Gardner-Denver, 415 U.S. at 53-54, 94 S.Ct. 1011). Nor can it be argued that the arbitration agreement required submission of statutory claims, such that Mathews's failure to assert them in arbitration resulted in their waiver. By its own terms, the arbitration agreement applied only to disagreements as to the interpretation, application or construction of this contract [i.e. the CBA], including all disputes involving discharge or discipline. CBA, Article XIII (emphasis added). Mathews's statutory claims consequently fall outside the scope of the arbitration agreement, and he has not waived such claims by failing to raise them at arbitration. For these same reasons, no preclusive effect should be accorded to the arbitral decision. Again, nothing in the arbitration agreement permitted or required Mathews to submit statutory claims to the arbitrator, nothing in the amended grievance purports to do so, and the arbitration agreement nowhere empowered the arbitrator to decide questions of statutory rights. The facts of Mathews's case thus mirror those of Gardner-Denver in all relevant aspects. Because the Gardner-Denver employees had not agreed to arbitrate their statutory claims, and the labor arbitrators were not authorized to resolve such claims, the arbitration in [ Gardner-Denver ] understandably was held not to preclude subsequent statutory actions. Gilmer, 500 U.S. at 35, 111 S.Ct. 1647. Seeing no relevant distinction between that case and the one before us, the same reasoning holds. The Agency's reliance on Lewis v. Circuit City Stores , in which we granted preclusive effect to a prior arbitral decision, is unavailing. There, the plaintiff had submitted specific claims under the Kansas Act Against Discrimination ... and Title VII of the Civil Rights Act against his employer to binding arbitration. 500 F.3d at 1144. The arbitration agreement in Lewis, moreover, required arbitration of  any claims arising under federal, state or local statutory or common law ... includ[ing], but not limited to ... Title VII of the Civil Rights Act of 1964 ... state discrimination statutes, state statutes and/or common law regulating employment termination, the law of contract or the law of tort. Id. at 1143 (emphasis added). Following the arbitrator's adverse determination, the Lewis plaintiff initiated a federal lawsuit against his employer, asserting violations of his statutory rights arising from the same set of facts as his arbitral complaints. Id. at 1145. In affirming the district court's grant of summary judgment against plaintiff on claim preclusion grounds, we explicitly distinguished Gardner-Denver and its progeny, which had allowed litigation to proceed because the parties had arbitrated contract-based claims, in contrast to statutory claims [and] the employees had never agreed to have an arbitrator decide their individual statutory rights. Id. at 1148 n. 9. In contrast, Lewis's arbitration agreement... was not limited to contractual disputes, [and] Lewis broadly agreed to arbitrate any statutory or tort claims. Id. Under those circumstances, the doctrines of preclusion and waiver applied. As is evident from our foregoing discussion, Mathews's case falls squarely within the reasoning of Gardner-Denver, and is easily distinguished from Lewis. Because the submission of Mathews's contractual claims to binding arbitration results in no waiver or preclusion of his statutory claims, summary judgment on such grounds was inappropriate.