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Arbitration: Make that Three-Supreme Court Agrees to Hear Another Arbitration Case. (Web)

The U.S. Supreme Court will hear a third arbitration case in the 2007-2008 term. Last week, it granted a writ of certiorari in 14 Penn Plaza LLC, et al., v. Pyett, et al. (Docket No. 07-581)(writ granted Feb. 19, 2008).

The issue on review is whether an arbitration clause in a collective-bargaining agreement that waives employees' rights to file statutory discrimination claims is enforceable.

The respondents, present and former employees of New York-based Temco Service Industries Inc., worked as night watchmen and porters in the front lobby and near the back entrance of 14 Penn Plaza LLC's commercial office in midtown Manhattan.

Around August 2003, guards from a related company, Spartan Security Services Inc., were hired, and the respondents were assigned to other, less desirable locations in the building, and eventually departed the company. The respondents were unhappy and alleged that age discrimination was the basis for their reassignments.

The collective bargaining agreement requires employees to submit employment discrimination cases to binding arbitration.

The former employees filed a federal court suit alleging violations of federal, state, and city laws prohibiting discrimination. The petitioners asked the court to dismiss the claims because the respondents had not raised the age discrimination issue in an arbitration proceeding related to this incident. The parties had arbitrated contractual claims earlier.

Alternatively, the employers asked the court to compel age discrimination arbitration.

The court denied the petitioners' requests, and upon appeal, the Second U.S. Circuit Court of Appeals affirmed the lower court decision that a collective bargaining agreement arbitration waiving employees' rights to file statutory discrimination claims was unenforceable in all situations.

The employers petitioned the U.S. Supreme Court last year requesting a hearing on the grounds that there is conflict in the courts over the enforceability of union-negotiated waivers of a judicial forum, and that the uncertainty about the enforceability of collective bargaining arbitration agreements creates serious policy concerns.

The Supreme Court agreed to hear the case on Feb. 19, but it hasn’t set an argument date.

--Kelly McIntyre, CPR Intern