'Hey, We Were Here First!': Union Arbitration and the Federal Arbitration Act
45 Pages Posted: 26 Sep 2019
Date Written: 2019
The U.S. Supreme Court in its 2018 decision in Epic Systems held, contrary to the position of the National Labor Relations Board (“Board” or “NLRB”), that under the Federal Arbitration Act (FAA) employer-employee agreements requiring employees to waive their right to participate in class action lawsuits were enforceable and that they did not interfere with the right of employees, under Section7 of the Labor Management Relations Act (LMRA), to “engage in concerted activity.” In Justice Neil Gorsuch’s opinion for the majority in that 5-4 decision, he stated repeatedly that “§7 focuses on the right to organize unions and bargain collectively.” Justice Gorsuch further stated, and pointed out that the dissent in the decision did the same, that “the legislative policy embodied in the LMRA is aimed at ‘safeguard[ing], first and foremost, workers' rights to join unions and to engage in collective bargaining.’” The references to both the majority and dissenting opinions demonstrate that all Justices of the U.S. Supreme Court in 2018 agreed that the “foremost” policy of the LMRA was protecting employees’ rights to be represented by a union and have that union bargain collectively with their employer on their terms and conditions of employment.
One aspect of that should include union-controlled arbitration of claimed violations of collective bargaining agreements, as an estimated 99% of major union-employer agreements include a grievance procedure that terminates in binding arbitration by a person or panel. And more than 90% of collective-bargaining agreements have a provision protecting employees from termination by requiring employers have “just cause” or something equivalent to fire an employee, meaning that in most union agreements an employee’s termination can be challenged as a contract violation subject to arbitration. The term “union-controlled” for such arbitration was not chosen lightly, but rather was based on the fact that most grievances are over some action of the employer that the union is trying to reverse or otherwise alter, an action that will remain unchanged unless the union decides to bring the grievance to arbitration.
Keywords: Federal Arbitration Act, unions, union arbitration
JEL Classification: K31
Suggested Citation: Suggested Citation