The U.S. Supreme Court, in its recent decision in Wright v. Universal Maritime Serv. Corp., squandered an opportunity to resolve an issue of great import to employers and employees covered by collective bargaining agreements (CBA's). Instead of resolving the question that was presented, whether or not union negotiated waivers of employees' statutory rights to a federal judicial forum are valid, the Court opted for a narrow holding that failed to significantly advance the law on this issue. The decision fails to reconcile the tension between the two lines of cases that have evolved from the Court's previous decisions in Alexander v. Gardner-Denver Co., and Gilmer v. Interstate/Johnson Lane Corp.

The Wright Court acknowledged the obvious tension between the two lines of cases. While Gardner-Denver held that an employees' rights under Title VII were not susceptible to a prospective waiver, Gilmer held that the right to a federal judicial forum for statutory claims by employees could be waived. However, rather than resolving the issue of the validity of a union-negotiated waiver, the Court held, based on the specific facts of the Wright case, that no waiver had occurred. The Court refused to reach the issue of whether such a waiver would be enforceable under other circumstances.

The Court recognized that the arbitration clause in Gilmer, which was as broad as the clause under scrutiny in Wright, was nevertheless found to cover statutory claims. The Court distinguished Gilmer, however, on the basis that Gilmer involved an individual's waiver of his own rights, rather than a union's waiver of member's rights. Therefore, the Court reasoned that it was not necessary to apply the clear and unmistakable waiver standard in that case. After examining the arbitration clause in Wright and finding it to be very general, and reviewing the contract for a provision that explicitly incorporated the anti-discrimination requirements of Title VII and finding none, the Court found that there was not a clear and unmistakable waiver of the covered employees' rights to a judicial forum for the resolution of federal employment discrimination claims. It remains uncertain the effect of broad arbitration clauses on cases where the CBA clearly encompasses employment claims or is not in the collective bargaining arena.

The crux of the Court's decision is that statutory claims are not subject to the presumption of arbitrability that the Court has found in § 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1947) and applied to collective bargaining agreements. Instead, the Court found that any requirement in a collective bargaining agreement to arbitrate statutory claims must be particularly clear. The Wright Court, quoting the U.S. Supreme Court in Metropolitan Edison Co. v. NLRB, stated, "[W]e will not infer from a general contractual provision that the parties intended to waive a statutorily protected right unless the undertaking is 'explicitly stated.' More succinctly, the waiver must be clear and unmistakable."

If you have any questions regarding this case or the arbitration clause in your collective bargaining agreement, please feel free to contact us by telephone or e-mail as set forth below.

The information provided herein is for general guidance on matters of interest only. While every effort has been made to ensure the information provided herein is accurate and timely, no decision should be made or action taken on the basis of this information without first consulting an Epstein Becker & Green professional.

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