Opinion ID: 4587243
Heading Depth: 2
Heading Rank: 1

Heading: “Clear and Unmistakable” Waiver Standard

Text: Normally, the inclusion of an arbitration clause in a CBA creates a “presumption of arbitrability” as to disputes that arise between the parties to that agreement. 13 There is an exception to that rule where a dispute ultimately concerns not the application or interpretation of the CBA, but the meaning of a statute; Wright requires a court to determine whether, without use of the presumption, an “ordinary textual analysis of a CBA show[s] that matters which go beyond the interpretation and application of contract terms are subject to arbitration[.]” 14 In Wright, the Supreme Court emphasized 13 See AT & T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 650 (1986). 14 525 U.S. at 79. 7 that a waiver of employee rights to a judicial forum must be “clear and unmistakable.” 15 In addition, “[b]y 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.” 16 There are advantages and disadvantages to the employer and the union in negotiating an arbitration clause in a CBA that reaches employees’ individual statutory rights. With those considerations in mind, both parties—who are highly sophisticated at negotiating the terms of a CBA—must balance those interests. 17 If the parties reach agreement on this issue, there should be no ambiguities surrounding the waiver provision incorporated into the CBA. As mandated by the Supreme Court in Wright and 14 Penn Plaza, an agreement to waive employees’ rights to a judicial forum for individual statutory claims must be “clear and unmistakable” in the language of the CBA. 15 525 U.S. at 80. 16 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626-28 (1985). 17 See Floyd D. Weatherspoon, Incorporating Mandatory Arbitration Employment Clauses into Collective Bargaining Agreements: Challenges and Benefits to the Employer and the Union, 38 Del. J. Corp. L. 1025, 1029 (2014). 8 AC&S first argues that the circuit court should not have applied the “clear and unmistakable” waiver standard pronounced in Wright 18 when determining the “validity” of the arbitration clause. AC&S maintains this heightened standard runs afoul of the more recent case of Epic Systems Corp. v. Lewis, 19 where the Supreme Court stated that arbitration agreements cannot be invalidated by “defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” 20 AC&S reasons that Wright’s standard is premised on the clause’s relation to arbitration and is exactly the sort of defense that is prohibited under Epic Systems. AC&S’s reliance on Epic Systems is misplaced; that case did not involve collectively bargained waivers of employees’ rights to a judicial forum for employment discrimination claims. Epic Systems addressed whether employer-employee agreements that contain class and collective action waivers that provide employment disputes are to be resolved by individualized arbitration were invalid under the National Labor Relations Act 18 525 U.S. 70. 19 138 S.Ct. 1612 (2018). 20 Id. at 1622 (quoting AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011). 9 (NLRA). 21 The Supreme Court held that such agreements do not violate the NLRA and that the agreements must be enforced as written pursuant to the FAA. 22 In this case, the “clear and unmistakable” waiver standard was not used to determine the validity of the arbitration clause; the circuit court found the arbitration clause was valid and enforceable with regard to Mr. George’s contractual rights under the CBA. Rather, the circuit court used this standard to determine the scope of the CBA’s arbitration clause. 23 So, Epic Systems is not relevant to our analysis because the “clear and unmistakable” waiver standard “does not reflect disfavor of union-negotiated arbitration agreements.” 24 Rather, this standard ensures that courts do not inadvertently interpret a CBA as waiving employees’ individual rights to bring employment discrimination claims in court when examining general arbitration clauses that the parties intended to reach only to contractual disputes under the CBA. 25 21 138 S.Ct. at 1619-21, 1632. 22 Id. 23 Abdullayeva v. Attending Homecare Servs. LLC, 928 F.3d 218, 222-23 (2d Cir. 2019) (“[T]he ‘clear and unmistakable’ standard is applicable only to the question whether a union has waived its members’ right to bring statutory claims in court, not to the initial question whether an arbitration agreement exists at all.”). 24 Abdullayeva, 928 F.3d at 223. 25 See e.g., Wright, 525 U.S. at 80 (stating that clause mandating arbitration of “matters under dispute” did not waive right to bring claims of employment discrimination (continued . . .) 10 AC&S further argues that Wright’s “heightened standard” with respect to arbitration clauses in CBAs was based on the reasoning in Alexander v. Gardner-Denver Co., 26 and that Supreme Court jurisprudence with respect to arbitration has evolved to the point that Gardner-Denver is ripe for overruling. 27 To explain why this argument is flawed, we discuss Gardner-Denver in the context of the two cases that guide our analysis, Wright and 14 Penn Plaza. In Gardner-Denver, the plaintiff brought an action under Title VII of the Civil Rights Act of 1964, 28 and the Supreme Court was tasked with deciding “under what circumstances, if any, an employee’s statutory right to a trial de novo under Title VII may be foreclosed by prior submission of his claim to final arbitration under the in court, because such an ambiguous clause “could be understood to mean matters in dispute under the contract”). 26 415 U.S. 36 (1974). 27 AC&S points to the following dicta in a footnote from 14 Penn Plaza for this proposition: Because today’s decision does not contradict the holding of Gardner-Denver, we need not resolve the stare decisis concerns raised by the dissenting opinions. . . . But given the development of this Court’s arbitration jurisprudence in the intervening years, . . . Gardner-Denver would appear to be a strong candidate for overruling if the dissents’ broad view of its holding . . . were correct. 14 Penn Plaza, 556 U.S. at 264 n.8 (emphasis added). For the reasons discussed below, this footnote is not relevant to the issues before this Court. 28 42 U.S.C. §§ 2000e to 2000e-17. 11 nondiscrimination clause of a collective-bargaining agreement.” 29 The CBA at issue stated that “[n]o employee will be discharged, suspended or given a written warning notice except for just cause,” and it “contained a broad arbitration clause covering differences aris[ing] between the Company and the Union as to the meaning and application of the provisions of [the CBA] and any trouble arising in the plant.” 30 The Supreme Court observed that the lower courts “evidently thought that [the result] was dictated by notions of election of remedies and waiver and by the federal policy favoring arbitration of labor disputes[.].” 31 But the Court disagreed and stated that the doctrine of election of remedies had no application in the context of the case because submitting a grievance to arbitration vindicated a contractual right whereas filing a lawsuit asserted an “independent statutory right[.]” 32 Finding that in enacting Title VII, Congress granted individual employees a nonwaivable, public law right that was separate and distinct from rights created through collective bargaining, Gardner-Denver held that an employee “does not forfeit his right to a judicial forum for claimed discriminatory discharge in violation of Title VII” if he or she 29 Gardner-Denver, 415 U.S. at 38. 30 Id. at 39-40 (internal quotation marks omitted). 31 Id. at 45-46. 32 Id. at 49-50. 12 first pursues a grievance to final arbitration under the nondiscrimination clause of a CBA.33 In addition to Gardner-Denver’s core holding, the 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. 34 Over twenty years later, the Supreme Court was confronted with a similar issue in Wright, when it addressed whether a general arbitration clause in a CBA required an employee to use the arbitration procedure for an alleged violation of the Americans with Disabilities Act of 1990 35 (ADA). 36 The Supreme Court held that any waiver of a judicial forum for an employee’s statutory rights in a CBA would have to be “clear and unmistakable.” 37 With respect to the particular CBA at issue in Wright, the Court observed that it contained only a general arbitration provision, providing for “arbitration of matters 33 Id. at 49. 34 Id. at 51-52. 35 42 U.S.C. §§ 12101 et seq. 36 Wright, 525 U.S. at 72. 37 Id. at 80. (“[T]he right to a federal judicial forum is of sufficient importance to be protected against less-than-explicit union waiver in a CBA.”). 13 under dispute,” and, thus, contained no sufficiently “clear and unmistakable” waiver of statutory rights under the ADA. 38 In Wright, the Supreme Court stated that it did not reach the question of whether a “clear and unmistakable” waiver “would be enforceable.” 39 But it squarely addressed that issue in 14 Penn Plaza 40 and sanctioned the use of a CBA’s mandatory arbitration provisions covering employee’s individual statutory claims. In 14 Penn Plaza, the plaintiffs submitted their employment discrimination claims to arbitration pursuant to the CBA between the parties, and filed a claim for employment discrimination in federal court under the Age Discrimination in Employment Act of 1967. 41 The Court held that the explicit language in the CBA was sufficient to meet the test set out in Wright; the CBA “clearly and unmistakably” required the parties to arbitrate the statutory age discrimination claims. 42 38 Id. 39 Id. at 82. 40 556 U.S. 247. 41 29 U.S.C. §§ 621 to 634. 42 The CBA between the parties explicitly provided: 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, (continued . . .) 14 In 14 Penn Plaza, the Supreme Court went on to state that Gardner-Denver did not control the outcome when the CBA’s arbitration provision expressly covered both statutory and contractual discrimination claims. It noted since the employees in GardnerDenver had not agreed to arbitrate their statutory claims, and the arbitrators were not authorized to resolve such claims, the arbitration in those cases did not preclude subsequent statutory actions in court. 43