Mandatory Labor Arbitration of Statutory Claims, and the Future of Fair Employment: 14 Penn Plaza V. Pyett

Abstract

By its 5-4 sharply divided decision in 14 Penn Plaza v. Pyett, 556 U.S. (April 1, 2009), the United States Supreme Court dramatically endorsed mandatory labor arbitration, rather than external litigation, to resolve labor union-represented employees’ statutory claims of unlawful age-based employment discrimination. The Court summarily isolated and trivialized as jurisprudentially obsolete, but did not deem it necessary to formally overrule, 35 years of well-established precedent that had protected the employee’s right to litigate de novo statutory claims of unlawful employment discrimination, without suffering any res judicata or collateral estoppel effects from a prior adverse arbitration decision. The Court substantially clarified, and perhaps simplified, what had become an increasingly complex and potentially inconsistent panorama of decisions as to whether labor union-represented employees can be mandated to arbitrate, and thus be foreclosed from litigating de novo, statutory claims, most frequently and most classically, those alleging unlawful employment discrimination by the employer. By its controversial activist methodology, the political, ideological Court ran roughshod over stare decisis principles. A host of questions, ramifications, and unintended consequences could well transform the dynamics of arbitration well beyond the present contours of labor-union represented employment environments. This article will critically assess the salient foreseeable consequences and likely ramifications of the Pyett decision. On the eve of a half-century of Supreme Court enthusiasm for labor arbitration, grounded in the landmark Steelworkers Trilogy in 1960, the Pyett decision perhaps reached the correct result, favoring a single, globalized, omnibus arbitration, rather than second bites at the apple in serial litigation. But, the Court engaged in deeply problematic, severely truncated reasoning to reach this result. Unfortunately, Pyett is not the rare exception. The phenomenon of the Court reaching the correct result, but through badly fractured and spasmodic reasoning, while not the norm, occurs with some frequency. Pragmatically, a sound functional result from a problematic and jagged opinion undeniably is markedly superior to an elegant theory yielding an obsolete, wrong result. The great practical utility of these quintessentially Lincolnian principles is palpable in labor and employment law. Pyett is certainly not the first, and will not be the last, decision of the Court that, while not elegantly grounded in sophisticated jurisprudential metaphysics, may nevertheless work well and yield just and fair results for employees, employers, and unions who favor a single, integrated arbitration forum for the resolution of all contractual and statutory claims. Meanwhile, those employees, employers, and unions wishing to retain independent judicial recourse for litigating statutory claims are not precluded from doing so, and are left unaffected by, the Pyett decision.