Choosing the Fork in the Road: Second Circuit Upholds Collective Bargaining Agreement Between CHRO and its Union Mandating Employees Elect Their Remedy (Court or Arbitration)
It's always interesting when the state agency responsible for enforcing discrimination claims is sued for discrimination itself. It's even more interesting when the agency takes a position that is opposite of the view of the EEOC. But a case decided on July 7th by the Second Circuit Court of Appeals sets up that scenario.
The case is Richardson v. CHRO (download here) and it resolves (at least in the Second Circuit) an important question for employers who have collective bargaining agreements with unions. Namely, does Title VII (the federal anti-discrimination law on gender and race, among other protected categories) prohibit clauses that allo
w an employee to choose their remedy for discrimination complaints in a collective bargaining agreement or does such a clause constitute "discrimination".
The Second Circuit, creating a split among the Courts of Appeals, agreed with the CHRO (and rejected the EEOC's interpretation). In doing so, the Court said that such a clause is not prohibited by Title VII and is not discrimination.
The Court's main holding is here:
While there are limits on what a union may agree to in collective bargaining, Plaintiff’s union has not transgressed them by contracting to limit an employee’s legal recourse under certain circumstances. The collective bargaining agreement about which Plaintiff complains simply stipulates that an aggrieved employee may either arbitrate her grievance or file a charge with the CHRO describing that grievance.
Nor did the union discriminate against Plaintiff by adhering to the election-of-remedies provision after Plaintiff chose to file a charge with the CHRO. The union’s choice to adhere to its collective bargaining agreement in this case was indubitably non-discriminatory: the collective bargaining agreement does not constitute a waiver of any statutory rights under Gardner-Denver, and the defendants’ withdrawal from arbitration did not constitute retaliation because the forum-selection clause was a reasonable defensive measure to avoid duplicative proceedings in the two fora Richardson’s employer maintained for addressing discrimination complaints.
Here was the clause that the court approved of:
[D]isputes over claimed unlawful discrimination shall be subject to the grievance procedure but shall not be arbitrable if a complaint is filed with the Commission on Human Rights and Opportunities arising from the same common nucleus of operative fact.
In other words, the employee can aribtrate a discrimination complaint or file a charge with the state agency responsible for investigating discrimination complaints, but not both. In so ruling, the Second Circuit upheld the lower court's granting of summary judgment to the CHRO and the union.
As the Workplace Horizons blog is quick to note, (and as the decision acknowledges), this now creates a split in the circuits, meaning that at some point, the issue will be ripe for U.S. Supreme Court involvement.
In the short run, for employers this type of clause may be an important bargaining chip in negotiations with unions. Until now, some unions might balk at such a provision because they might believe it was unenforceable. This decision now gives both employers and unions some room to manuever in this area. For employers looking to reduce costs, inserting such provisions may also help to avoid discrimination lawsuits by having employees use the grievance procedure instead.
Interesting footnote: The case was argued in February 2007 and decided in July 2008. Thus, for those that think the justice system always moves quickly, think again.
ow to evaluate and litigate damages, including discovery, mental examinations, the value of expert testimony, the risk of punitive damages, mitigation, tax and insurance implications, and settlement. My colleague, 
on the subject, the Labor & Employment Committee of 
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