Members of the Service Employees International Union who had worked as night security guards for 14 Penn Plaza were replaced in August 2003, when 14 Penn Plaza contracted with another firm to provide security for the building. Claiming that they were the building’s only employees over 50 years old, the union members filed an age discrimination suit against 14 Penn Plaza under the Age Discrimination in Employment Act (ADEA). 14 Penn Plaza filed a motion to compel arbitration under the union members’ collective bargaining agreement, which clearly required that discrimination claims be resolved via arbitration.
The district court denied 14 Penn Plaza’s motion to compel arbitration and the Second Circuit affirmed, holding that a “mandatory arbitration agreement purporting to waive a covered worker’s right to a federal forum with respect to statutory rights is unenforceable,” even when such an agreement had been freely negotiated by a union.
On April 1, the Supreme Court held that an arbitration clause contained in a collective bargaining agreement is enforceable. The Court reasoned that because the arbitration clause was freely negotiated and “clearly and unmistakably” required that ADEA claims be resolved by arbitration, it had no legal basis to strike down the provision. An earlier decision allowed arbitration of ADEA rights for individuals, and the Supreme Court has now applied this principle to collective bargaining agreements, as long as the waiver of the right to sue for ADEA violations is clearly expressed. The decision is important because it applies the right to arbitrate ADEA disputes broadly to employer agreements with individuals and unions alike.