Vol. 10, No. 1, Pg. 28. Recent Developments in Arbitration of Employment Disputes.

• Author: By David E. Dubberly

South Carolina Lawyer

1998.

Vol. 10, No. 1, Pg. 28.

Recent Developments in Arbitration of Employment Disputes

28Recent Developments in Arbitration of Employment DisputesBy David E. DubberlyThe U.S. Court of Appeals for the Fourth Circuit has taken a leading role in enforcing various types of employment agreements requiring binding arbitration to resolve workplace disputes. In Gilmer v. Interstate/ Johnson Lane Corp., 500 U.S. 20 (1991), the first U.S. Supreme Court endorsement of contractually-mandated arbitration of statutory employment claims, the Court unanimously affirmed a Fourth Circuit decision.

As a condition of employment, the plaintiff in Gilmer had been required to register as a securities representative with the New York Stock Exchange. The application for his securities registration, known as a Form U-4, contained an arbitration clause under which the plaintiff agreed to arbitrate any disputes with his employer arising out of his employment. When the plaintiff filed an action claiming that his termination violated the Age Discrimination in Employment Act (ADEA), the Fourth Circuit ruled that the case was subject to compulsory arbitration.

In 1996 the Fourth Circuit became the first Circuit Court of Appeals to require an employee to arbitrate discrimination claims pursuant to a collective bargaining agreement (CBA). In Austin v. Owens-Brockway Glass Container, Inc., 78 F.3d 875 (4th Cir.), cert. denied, 117 S.Ct. 432 (1996), the plaintiff sued her former employer for violating Title VII and the Americans with Disabilities Act (ADA). Her employment was covered by a CBA pecifically providing that claims of discrimination were subject to the grievance procedure. Following the last step of the grievance procedure, an unsettled dispute "may be referred" to arbitration.

Even though the Supreme Court had held in Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974), that an arbitration provision in a CBA cannot bar an employee from bringing a statutory discrimination claim in court, the Austin court concluded that an agreement to arbitrate is enforceable whether it is contained in a Form U-4, a private employment agreement, or a CBA. 78 F.3d at 885. The court stated that Gilmer "rejects the principal concern in Gardner-Denver that arbitration is an 'inappropriate forum' for the resolution of" discrimination claims. Id. at 880.

While the Supreme Court denied certiorari in Austin, the Fourth Circuit's decision has been rejected by the Sixth, Seventh, Tenth and Eleventh Circuits, which have continued to apply Gardner-Denver as holding that an employee's right to a judicial forum cannot be waived in a CBA. See Penny v. United Parcel Serv., 128 F.3d 408 (6th Cir. 1997); Pryner v. Tractor Supply Co., 109 F.3d 354 (7th Cir.), cert. denied, 118 S. Ct. 294 (1997); Harrison v. Eddy Potash, Inc., 112 F.3d 1437 (10th Cir.), petition for cert. filed, 66 U.S.L.W. 3137 (U.S. Aug. 6, 1997); Brisentine v. Stone & Webber Eng'g. Corp., 117 F.3d 519 (11th Cir. 1997).

In Martin v. Dana Corp., 114 F.3d 428 (3d Cir. 1997), vacated, rehearing en banc granted, No. 96-1746,1997 WL 575880 (3d Cir. Sept. 12, 1997), a panel of the Third Circuit agreed with the Fourth Circuit that under certain circumstances an employee could be bound to submit her statutory claims to arbitration under the terms of a CBA. Subsequently, however, Martin was vacated and rehearing en banc granted.

In 1997 the Fourth Circuit became the first...