Arbitrator and NAA member, Lise Gelernter discusses a recent decision by the United States Court of Appeals for the Second Circuit  dealing with the waiving of the statutory rights of individual employees through a collective bargaining agreement.

In Lawrence v. Sol G. Atlas Realty Co. Docket No. 15-3087 (2d Cir. 10/28/16), the federal Second Circuit Court of Appeals in New York held that a union contract had not waived an individual employee’s right to go to court to vindicate his claims of employment discrimination. Winston Lawrence, who is black and is of West Indian descent, is a union-represented porter at Atlas Realty, a property management company.  He sued his employer, alleging that Atlas had discriminated against him on the basis of race and national origin, thus violating Title VII of the Civil Rights Act of 1964 and other federal and state laws.

Atlas contended that the union contract required Lawrence to pursue his claim through the contractually designed grievance and arbitration process.  The employer pointed to the “No Discrimination” section of the collective bargaining agreement, which provided:

“There shall be no discrimination against any present or future employee by reason of race, creed, color, age, disability of an individual in accordance with applicable law, national origin, sex, sexual orientation, union membership, or any characteristic protected by law. Any disputes under this provision shall be subject to the grievance and arbitration procedure.”

The Second Circuit overturned a District Court decision that had agreed with Atlas’ reasoning.  The appeals court found that the contract’s arbitration clause did not specifically state that disputes about statutory rights were subject to arbitration and also failed to identify the specific laws at issue in Lawrence’s claim.  The Court said: “The ‘No Discrimination’ provision may plausibly be interpreted to require arbitration of contractual disputes only. It makes no mention of ‘claims’ or ‘causes of action.’ It cites no statutes.”  Therefore, the Second Circuit held, the collective bargaining agreement did not constitute a “clear and unmistakable waiver” of Lawrence’s right to bring his lawsuit in court.

This ruling is consistent with the earlier holding of the U.S. Supreme Court in Wright v. Universal Maritime, 525 U.S. 70, 80‐81 (1998).  In that case, the Supreme Court also found that a collective bargaining agreement’s arbitration clause was not a “clear and unmistakable waiver” of an individual employee’s right to bring a lawsuit based on a violation of a statute.  The arbitration contract language in Wright was similar to the language in the Atlas case in that it did not refer to any specific statutes and it could be read to address contractual violations only.  The Wright language stated: “no provision or part of this Agreement shall be violative of any Federal or State Law,” and also provided that “[m]atters under dispute which cannot be promptly settled between the Local and an individual Employer shall, no later than 48 hours after such discussion, be referred in writing covering the entire grievance to a Port Grievance Committee.”  The Second Circuit found that the Atlas Realty contract was similarly deficient of references to particular laws and statutory claims.