Supreme Court's decision in Pyett collective bargaining case will have little real world effect

George Lenard [Managing Parner, Harris Dowell Fisher & Harris, LC]: "In the academic world, this case will be a law professor's pleasure and a law student's nightmare. It presents interesting conflicting precedents and policies. Justice Thomas's majority opinion seems to make sense on first reading, but then so do the dissents - typical disagreements from the Supremes. At least there are no concurrences muddying the waters.

It would be fun to micro-analyze all the threads of argument and reread all the cited cases and think for hours about who was really right and about what points, who was more intellectually dishonest and about what points, etc. Heck, it'd be fun to do that for every labor and employment Supreme Court case that comes out. But I'm a practicing lawyer and haven't the time. Another fun game to play would be to look for the questions a case left open, which of course can be seen as opportunities for further litigation, not to mention great subjects for law journal notes or articles. Again, that's not my thing these days.

What I tend to do is read a new decision very quickly and then think more broadly about what its impact will be in the everyday world - how it will affect the actions of employers, employees, unions, their attorneys, and trial court judges. What I have found over years of doing this is that relatively few Supreme Court decisions wind up having as much everyday impact as we might expect when they are announced. And I don't always find it easy to predict which ones will be among the few with major impact.

My guess is that this one will get buried in the books quite quickly, with little lasting real-world impact (though it will likely be added to all the labor law and employment law casebooks in order to torture - I mean challenge - law students, and will generate its share of law journal commentary).

To begin with, only a small percentage of today's employees are covered by collective bargaining agreements. I suspect a relatively small percentage of these agreements include the kind of express reference in the arbitration clause to statutory claims that I believe was key to the outcome here. So the immediate applicability is quite narrow, in terms of the percentage of the workforce - and percentage of statutory discrimination claims - that are directly affected.

Of course, this case might encourage some employers and unions to seek to add such express language to their contracts. But both sides have reason to prefer not to do so, as well as reasons to consider doing so.

Those management employment lawyers who are huge fans of arbitration, and have been encouraging clients for years to make individual employees sign arbitration agreements, will no doubt see this decision as a major victory for employers and will encourage clients to push for this type of language at the bargaining table. I have never been in that category. I have been leery of expanded arbitration of employment claims because there are a number of significant negatives to such arbitration, not the least of which is losing two additional opportunities to win: summary judgment and appeal (appeal from arbitration being technically available, but normally worthless).

Employers may not want to agree to arbitration of discrimination claims because it may encourage and facilitate more employees to pursue such claims, albeit in a less costly forum. In the collective bargaining context, if labor-management relations deteriorate, or if they have a long history of hostility, the grievance arbitration process becomes as much about the union creating annoyance and cost for the employer and demonstrating power to employees as about the pursuit of just resolution of legitimate disputes. In this view, drastic expansion of the coverage of the arbitration clause amounts to handing the union a new weapon. On the other hand, in a properly managed company, the great majority of discrimination claims disappear following an appropriate response to an agency investigation, which can probably be prepared less expensively than an arbitration.

For their part, unions may not be interested in arbitration of statutory discrimination claims because the possibility of such arbitration may entangle them in too many situations in which the primary conflict is between the respective interests of members rather than between the membership as a whole (or substantial parts thereof) on the one hand and the employer on the other, raising the specter of duty of fair representation claims.

I have a hard time imagining the issue being of enough value to either party to be worth bargaining hard for, or trading economic contract items for, if the other side is opposed to making the change.

So, in practical terms, we are left with the question of whether future collective bargaining negotiations will yield a significant trend of including statutory claims in the arbitration clauses of more contracts, now that their legal status has been clarified. I'm skeptical, given that I see much bigger fish to fry as unions and employers struggle to cope with current major economic challenges.

If my skepticism is proven correct, this case will be another example of the Court having chosen to grant certiorari on a case that it found interesting and challenging, but that had little lasting significance."

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