U.S. Supreme Court to Decide whether Labor Agreement Bars Court Litigation of Employee's ADA Claim

By Ronald Turner

On March 2, 1998, the United States Supreme Court announced that it will decide the question of whether an employee's Americans with Disabilities Act claim is subject to compulsory arbitration pursuant to an arbitration clause contained in a union-employer collective bargaining agreement.

The Supreme Court will consider this question in its review of the Court of Appeals for the Fourth Circuit's decision in Wright v. Universal Maritime Service Corporation, 1997 U.S. App. LEXIS 19299 (4th Cir. 1997). Ceasar Wright, a longshoreman, was injured at work and filed an action for benefits under the Longshore and Harbor Workers' Compensation Act in which he contended that he was totally and permanently disabled. Wright's employer settled that claim for $250,000. In January 1995, Wright, cleared to return to work by his physician, went to the hiring hall of Local 1422 of the International Longshoreman's Association ("Union"). The Union referred Wright to four different employers. When those employers learned of Wright's earlier total and permanent disability claim and settlement, their association (the South Carolina Stevedores Association, comprised of a number of shipping companies) informed the Union that Wright should not be referred to them for work because he was not qualified due to his disability. The Union disagreed with the association's action, but did not file a grievance under the grievance-arbitration clause contained in its collective bargaining agreement with the association. That clause stated that the "Union agrees that this Agreement is intended to cover all matters affecting wages, hours, and other terms and conditions of employment."

Advised by the Union to pursue his statutory rights, Wright filed an action alleging that the employer association's refusal to hire him violated the ADA. Relying on the Fourth Circuit's 1996 decision in Austin v. Owens-Brockway Glass Container, 78 F.3d 875 (4th Cir. 1996), the district court dismissed the suit because Wright did not submit the claim to arbitration under the Union-association labor agreement. Affirming the district court's ruling, the Fourth Circuit noted that its prior decision in Austin "established that collective bargaining agreements to arbitrate employment disputes are binding upon individual employees even when the dispute involves a federal cause of action." Wright argued that the arbitration clause did not specifically refer to or address ADA claims. Rejecting that argument, the court concluded that an "employer need not provide a laundry list of potential disputes in order for them to be covered by an arbitration clause." Accordingly, the court held that Wright had to submit his claim to arbitration and could not sue the association in court.

The Fourth Circuit's view that labor arbitration agreements require employees to submit statutory claims to arbitration rather than the courts is based on the court's reading of the Supreme Court's decision in Gilmer v. Interstate/Johnson Lane Corporation, 500 U.S. 20 (1991). In that case, arising under the Federal Arbitration Act and not involving a labor agreement, the Supreme Court held that an employee's Age Discrimination in Employment Act claim could be subjected to compulsory arbitration pursuant to an arbitration agreement contained in a securities registration application.

The Fourth Circuit's position has been rejected by other federal courts of appeals. See Martin v. Dana Corp., No. 96-1746 (3d Cir. 1997); Harrison v. Eddy Potash, Inc., 112 F.3d 1437 (10th Cir. 1997); Pryner v. Tractor Supply Company, 109 F.3d 354 (7th Cir. 1997); Varner v. National Super Markets, Inc., 94 F.3d 1209 (8th Cir. 1996). Those courts applied the Supreme Court's 1974 decision in Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974), wherein the Court held that "the federal policy favoring arbitration does not establish that an arbitrator's resolution of a contractual claim is dispositive of a statutory claim" under Title VII of the Civil Rights Act of 1964. The Alexander Court emphasized that the contractual right to submit a claim to arbitration under a collective bargaining agreement and the statutory right to file an action in federal court "have legally independent origins and are equally available to the aggrieved employee."

The Supreme Court's decision in Wright should resolve the issue of which precedent, Gilmer or Alexander, applies to and governs employer efforts to compel arbitration of employee statutory claims in unionized settings. Should the Court decide in favor of compulsory arbitration, employees could be required to forego court-adjudication of ADA and Title VII actions and other claims brought under laws providing employees with a right to jury trials, full discovery, attorneys' fees, punitive and compensatory damages, and other remedies. Whether these fundamental public-law matters can and should be relegated to the private-law system of labor arbitration is a critical question given employers' increasing use of arbitration as a means of resolving employment discrimination claims and other workplace disputes.

03/09/98