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CNA-Henry Mayo CBA: The Pyett Omnibus Process in Practice

Last Wednesday the Los Angeles Daily Journal reported on the new collective bargaining agreement (CBA) between the California Nurses Association (CNA) and Henry Mayo Newhall Memorial Hospital (Henry Mayo) which, reportedly, “includes a provision to waive class complaints and send all individual workplace discrimination and labor grievances to a private arbitrator instead of a public courthouse.”  Quoted commentators expressed skepticism that other unions would follow suit in agreeing to such a provision.

Such an “omnibus” arbitration provision” was first permitted by the U. S. Supreme Court in its 2009 decision in 14 Penn Plaza LLC v. Pyett (556 U.S. 247) which held that whenever a union contract “clearly and unmistakably” requires that all age discrimination claims under the Age Discrimination in Employment Act of 1967 (ADEA) be decided through arbitration, then employees subject to that contract cannot have those claims heard in court.  Prior to Pyett, employees covered under union contracts were able to raise claims of civil rights violations by their employer in court, regardless of language contained in their union contract.

Pyett was another one of those 5-4 decisions[1] manifesting the “stark ideological and political warfare [which] continues between the Court’s core conservative majority and the liberal minority.”  See, David L. Gregory and Edward McNamara, Mandatory Labor Arbitration of Statutory Claims, and the Future of Fair Employment:  14 Penn Plaza v. Pyett, 19 Cornell Journal of Law and Public Policy 429, 450 (2010).  Gregory and McNamara, while faulting the Court for its “deeply problematic and severely truncated reasoning,”[2] suggest that “pragmatically…a sound functional result” may have occurred. [Ibid., 432], albeit one which presents a host of open questions, answers to which risk transforming pre-Pyett labor arbitration into something “unrecognizable.”  Ibid., 455.

In Pyett the union informed its employees that, should the union elect not to proceed with arbitration of the employees’ claim, they could individually present their statutory claims before the arbitrator with their own private counsel, bearing personal responsibility for attorney and arbitrator fees; commentators Gregory and McNamara recount how, under a “parade of horribles,” it is possible that the employer could be held responsible for such fees in those statutory rights cases that the union declines to take to arbitration.”  Other  “parade horribles”  identified by Gregory and McNamara include the dramatic proliferation of discovery and corresponding motion practice, as well as the addition of compensatory and punitive damages and attorneys fees culminating in  “interminable delays in an increasingly clogged and dysfunctional arbitration system;”  Ibid., 455.

Nonetheless, Gregory and McNamara find Pyett an “innovative” and “intriguing” alternative in contrast to the “serial proceedings and seemingly never-ending litigation”  under previous (Gardner-Denver) precedent.[3]  See also, Stephen A. Plass, Using Pyett to Counter the Fall of Contract-based Unionism in a Global Economy, 34 Berkeley Journal of Employment & Labor Law 219, 226 (2013) (noting the “transformative potential” of such a “precedent-setting unification of labor and employment law” construed to require as a sine qua non of union waiver legitimacy that the agreement permit the employee to arbitrate with substantive rights intact, notwithstanding a union declination of representation.) Plass construes Pyett to require the union to guarantee the employee the contractual right to “go it alone” when negotiating a forum waiver, since “anything less would make the forum waiver agreement void for preventing effective employee vindication of statutory rights” (Ibid., 236),[4] although, as noted in earlier blogposts, the current U.S. Supreme Court may not be committed to “effective vindication” as a threshold requirement for mandatory arbitration, adding yet another element of uncertainty into the future of labor and employment arbitration.[5]

Other commentators have proposed negotiation of a “separate arbitration procedure for statutory claims,” as a means to  “return the contractual procedure to its traditional and favored role as an extension of the contract negotiation process.”  See, Ann C. Hodges, Fallout from 14 Penn Plaza v. Pyett: Fractured Arbitration Systems in the Unionized Workplace, Journal of Dispute Resolution Vol. 2010 Iss. 1 [2010] Art. 3.[6]  And see Plass, supra, 248, also noting the necessity to establish a “specific procedure for processing statutory claims,” with attention to limitations period, discovery and other perquisites of due process.  Plass sees a role ahead for unions in Pyett arbitral practice in terms of ensuring non-elimination or non-dilution of employee substantive rights, policing fair process, etc., and urges unions to “overcome their discomfort” with Pyett principles to start realizing ‘its revolutionary potential.”  Ibid., 254-255.

[1] The majority decision was authored by Justice Thomas;  dissents were authored by Souter and Stevens.  Souter emphasized that the majority left open a significant question, inasmuch as it expressly reserved the issue, whether a CBA’s waiver of a judicial forum is enforceable when the union controls access to and presentation of employees’ claims in arbitration, which is often the situation.  Notably,  the CNA-Henry Mayo CBA reportedly contains an affirmative opt-out  of arbitration within 60 days of the alleged violation.

[2] For an unflinching critique of the Court’s “refusal to acknowledge the difference in federal law between protecting individual rights and protecting rights to collective action, thereby ignoring the “unique quality of federal labor law within American law- that of protecting group rights,” see, Kenneth M. Casebeer, Supreme Court Without A Clue:  14 Penn Plaza LLC v. Pyett and the System of Collective Action and Collective Bargaining Established by the National labor Relations Act, 65 Univ. of Miami Law Rev. 1063, 1066 (2011) (“a bare Supreme Court majority, in discovering the religion of arbitration in Pyett, has…summarily altered the system of labor-management relations in the United States..”  Ibid., 1080.

[3] Alexander v. Gardner-Denver (1974) 415 U.S. 36.

[4] To same effect, see, Ariana R. Levinson, What the Awards Tell Us About Labor Arbitration of Employment Discrimination Claims, 46   Univ. of Michigan Journal of Law Reform 789, 853 (2013).

[5] Although, as noted by Plass, the U.S. Supreme Court in Pyett itself ruled that a “substantive waiver of federally protected civil rights will not be upheld.”  Ibid., 240, note 125.

[6] Yet Hodges notes that creating an effective alternative system may prove difficult given the “common overlap of legal and contractual claims,” uncertainties remaining from unresolved issues in Pyett , and the  “ever present specter of duty of fair representation claims for unions.”  Ibid., 38.