WRIGHT v. UNIVERSAL MARITIME SERVICE CORP.

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Argument of Ray P. McClain

Chief Justice Rehnquist: We'll hear argument next in Number 97-889, Ceasar Wright v. Universal Maritime Service Corporation.

Mr. McClain.

Mr. McClain: Excuse me.

Mr. Chief Justice, and may it please the Court:

Petitioner Ceasar Wright seeks a hearing on the merits of his claim that the respondents violated his rights under the Americans with Disabilities Act when they refused to accept him for work when he was referred from the union hiring hall.

As the district court found when Mr. Wright was refused work, he took the matter to the union.

The union protested on his behalf, but when the employers would not accede to the union's protest, the union decided, as the district court found, that they would not pursue the matter as a formal grievance, and recommended that Mr. Wright should take the matter to private counsel to bring the case under the Americans with Disabilities Act.

Justice O'Connor: Do you think that the ADA claim could have been resolved in a grievance procedure?

Mr. McClain: This grievance procedure I do not believe was thought by the union to cover it.

Justice O'Connor: I'm not asking you what the union thought.

I'm asking you whether... if... suppose the union said, fine, we'll process it.

Do you think under this agreement that under the grievance procedure this claim could have been resolved?

Mr. McClain: Not with finality.

No, not binding on the petitioner, if it was... if it had been addressed, no.

Chief Justice Rehnquist: Why would it not have been binding on the petitioner?

Mr. McClain: Because the grievance procedure itself did not specifically provide for a statutory claim to be pursued through that manner.

Chief Justice Rehnquist: So then you're saying that the collective bargaining agreement, because it didn't specify statutory claims, didn't include this kind of a claim?

Mr. McClain: That's been the holding of this Court for years, Your Honor.

Chief Justice Rehnquist: In what cases?

Mr. McClain: Livadas v.... the Livadas case is the most recent one, in which it was indicated that the waiver of an individual's right to proceed under a law that was applicable to all workers would not be inferred.

Chief Justice Rehnquist: Well, you said a holding of this case, and now you say... the case you cite for the holding, you say it was indicated in the case.

Was Livadas a holding on this point?

Mr. McClain: I believe it actually was part of the holding of that case, Your Honor.

I'd have to read it more carefully to be absolutely sure of that.

Justice O'Connor: If there had been a nondiscrimination clause in the collective bargaining agreement, would that have changed the situation here?

Would that have been enough?

Mr. McClain: No, because as in Alexander the petitioner had both remedies recognized by this Court's decision.

Chief Justice Rehnquist: Well, Alexander's been cut back in later cases by our Court.

Some of the reasoning of Alexander has certainly been undercut as to arbitration not being a satisfactory way of handling these cases.

Mr. McClain: That's correct, Your Honor, but however, an essential part of the reasoning of Alexander which this Court emphasized in the decision in the Gilmer case is as applicable today as it was when Alexander was decided, and that is that Mr. Wright had no legal authority to compel a hearing on his claim.

He was at the mercy of the union's decision as to whether or not the matter would be pursued.

Justice Scalia: Why is that worse for a statutory claim than it is for... is that only bad for Federal statutory claims, or is it State statutory claims as well?

Mr. McClain: The same rule applies to the State statutory...

Justice Scalia: To State statutory claims.

Mr. McClain: Which Livadas was an example of.

Justice Scalia: Why is a State statutory claim against... well, let's assume... or a Federal, against discrimination, why is that more important to the worker than his common law right to get the money owed him for work performed under a contract?

I mean, you know, as between one and the other, which one would you rather give up?

Mr. McClain: I don't want to give up either one, Justice Scalia.

Justice Scalia: Yes, me neither, but if I had to pick I would think my right to agreed-upon contract compensation might be the more important to me, to tell you the truth.

Mr. McClain: Well...

Justice Scalia: What's the reason for this rule?

And what if California codifies its law of contract so that your right to get money for a day's work as agreed upon in the contract becomes a statutory right?

It then becomes, what, nongrievable in the union contracts?

Mr. McClain: Your Honor, basically... let me back off just a minute and try to start with the questions one at a time.

Justice Scalia: All right.

Mr. McClain: First, Congress has determined that certain minimum standards should apply to all workers, and they have determined that these minimum standards are enforceable in court, and they've determined that they're only... as this Court held in Alexander, it has been determined that there are only two jurisdictional requirements for going to court.

Justice Scalia: But congressional law is interstitial.

I mean, Federal law, especially in these areas of contract, is really not the dominant law.

The States have determined, I can say just as...

Mr. McClain: Well, I would...

Justice Scalia: just as ponderously the States have determined that a man or woman should get a day's pay for a day's work as agreed upon, and has determined that there should be a lawsuit available for that.

Mr. McClain: But in the unionized contract context, it is in fact Federal law that governs because of the statutory relationship between the union as the exclusive bargaining agent for the workers in that unit, and so the union has to be the party to enforce the rights, and the rights that it can enforce are those which it has negotiated with the employer.

That's the nature of that particular workplace.

It has been organized pursuant to Federal statute, as construed and applied for decades by this Court.

Justice Scalia: I'm not sure what you're saying.

Are you saying that the rule you're arguing for is that only Federal statutes cannot be made... cannot be disposed of in the collective bargaining arbitration process?

Mr. McClain: No, sir.

What I was stating... I was trying to answer your question about whether this was a matter of State law, the contract right, and the fact is that the contract right under the collective bargaining agreement is totally regulated by Federal law, and the rights, the manner in which those contract rights are created, and the manner in which those contract rights are enforced are thoroughly regulated by...

Justice Ginsburg: You're talking about 301.

Mr. McClain: That's correct.

Justice Ginsburg: And Lincoln Mills, and that...

Mr. McClain: Yes, ma'am.

Justice Ginsburg: And that under that whole regime you have a right to go to court but you have to use the grievance arbitration procedure...

Mr. McClain: First, under 301...

Justice Ginsburg: So that works for the whole collective bargaining regime.

Mr. McClain: That's correct.

Justice Ginsburg: And was your distinction of Gilmer primarily that the... it is not the worker that has a claim in the grievance procedure, it is the union that is in control and that's...

Mr. McClain: That's...

Justice Ginsburg: That's how you differ it from Gilmer?

Mr. McClain: That's absolutely right.

That's why the union is not capable of making the same promise that Mr. Gilmer made, because the union cannot say, under the labor grievance mechanism, that Mr. Wright will have the power to enforce this contract.

Chief Justice Rehnquist: Well, but that simply states the conclusion.

What if this case had come up under the Federal Arbitration Act, that these people were not longshoreman, but the Federal Arbitration Act would apply to their contracts?

There we would probably hold that this was arbitrable, don't you think?

Mr. McClain: Well, Your Honor, of course this Court has not decided the question of whether or not the Federal Arbitration Act applies to any contract of employment.

Chief Justice Rehnquist: No, but let's assume we did decide that point in favor of arbitration.

Mr. McClain: And then... well, no... the critical distinction between Mr. Gilmer's situation as an individual and Mr. Wright's situation as a member of an organized bargaining unit is absolutely critical.

Both Mr. Wright has not in fact...

Chief Justice Rehnquist: Are you answering my question, or...

Mr. McClain: I'm trying to.

Chief Justice Rehnquist: Okay.

Mr. McClain: Sorry.

Chief Justice Rehnquist: Keep trying.

Mr. McClain: The answer is no under the FAA, because the promise... the union just can't make the same promise.

Chief Justice Rehnquist: Well, but the union certainly is capable of enforcing the contract rights, and it may have to give away some of Mr. Wright's claims there, and you're saying that there's some magic difference between statutory rights and contract rights?

Mr. McClain: That is the case because the whole labor grievance arbitration process for enforcing the contract rights is an integral part of the bargain.

Chief Justice Rehnquist: Well, if you made the arbitration clause broader, supposing it said specifically that we include statutories, then you could say that was an integral part of the thing, too.

That just states the conclusion.

To say it's an integral part...

Mr. McClain: No, sir, I'm sorry, I didn't make myself clear.

When I say it's an integral part of the bargain I mean that the decision... in other words, the way in which disputes under the contract are to be resolved is in the contract...

Chief Justice Rehnquist: Well...

Mr. McClain: and there is... it doesn't have any source in external law, in public law.

Chief Justice Rehnquist: Well, but why does that make a difference?

Mr. McClain: As between the FAA and...

Chief Justice Rehnquist: Well, either between the FAA and the present situation or between statutory rights.

I mean, if arbitration is favored, I mean, why don't we encourage the inclusion of arbitration clauses in Federal labor contracts, allow for the arbitration and statutory rights?

Mr. McClain: Because that would threaten the union's role as the exclusive bargaining agent.

Chief Justice Rehnquist: How would it do that?

Mr. McClain: Well, the control, as this Court has emphasized in decisions such as Vaca v. Sipes, the control of the grievance process in the hands of the union subject to only an extremely limited review is essential to the union's role as... in enforcing the contract, in continuing to maintain labor peace by not only making an agreement with the employer in the first place but by then resolving disputes that arise under the agreement with that employer.

And if the union does not have the authority to make these decisions with a very limited scope of review, then it will not be able to have the same give-and-take that this Court has approved...

Chief Justice Rehnquist: Well, maybe it does have authority to make these decisions with limited scope of review.

Mr. McClain: That's correct, and then that... that deprives the individual of his right under the Federal statute.

Chief Justice Rehnquist: Well, but if his right to... if his right to contract for wages is subject to that, why shouldn't his statutory rights be subject to that?

Mr. McClain: In part because this Court concluded in Alexander that...

Chief Justice Rehnquist: Well...

Mr. McClain: that was not the case, and it has been reaffirmed in numerous cases since that time, because of the absence of the ability of the individual to control the prosecution of his claim, and Congress has approved that arrangement, and...

Chief Justice Rehnquist: How did Congress approve it?

Mr. McClain: In the same way that Congress approved this Court's decision in the Meritor case, as was discussed in the Faragher and Ellers decisions at the end of last term, that the... in the 1991 Civil Rights Act Congress specifically addressed and modified some eight decisions of this Court.

It did not address Meritor.

Chief Justice Rehnquist: So by not addressing a case Congress confirms it?

Mr. McClain: Well, in... that's... I'm simply citing the decisions of this Court.

Justice Scalia: You must not be familiar with the legislative process.

Justice Souter: Mr. McClain, I thought your argument at least in part is somewhat different from what you have been saying to the Chief Justice, and let me just put forward what I thought was at least one strand of your argument, and you tell me whether it is or it isn't.

I thought at least one strand of your argument was that the line represented in Alexander, for example, or drawn in Alexander still applied here, was that it was the only way to respect what Congress has in fact done.

And Congress has in fact given a crucial bargaining role to unions in contract formation, and therefore there's nothing really inconsistent with that with saying, okay, we're also going to give the union an equally significant role in determining how we negotiate enforcement of this contract, if you will.

But Congress has not given the union any role in the formation of the right under title... rights under title VII or the ADA, and that's why we are simply respecting the will of Congress in saying, you can't let the union bargain away what the union has had no role in giving, whereas when you have given the union a role in contract formation it is consistent with congressional intent to let the union have a role in enforcing it.

I thought that was the guts of your argument.

Mr. McClain: I think... I certainly agree with your... the case as stated, or the propositions as stated, Justice Souter.

I don't disagree with that at all.

I was trying to articulate that earlier and failed to do so as well as you have.

Justice Ginsburg: May I ask if the end result, then, is what you're saying is, in any employment covered by a collective bargaining contract you simply cannot have a Gilmer-type deal because the employer, under the NLRA the employer cannot contract with the employee, but only with the union?

Mr. McClain: Well, that is the case unless the union authorizes the employer to make a separate agreement with the individuals.

Justice Scalia: Can the union do that?

I didn't know that.

Mr. McClain: If the union and the individual agree to do so we believe that they can.

They cannot do it directly.

Justice Scalia: Do you know of any instances where they... you see, one of the things that affects me about this case is, if I were an employer, I would have a severe... and with the multiplication of Federal laws affecting the employment relationship, the ADA and a number of others, I would be very disinclined to have a unionized shop if it means that neither the union can agree to have all of these common disputes arbitrated, nor can the individual employee.

Mr. McClain: I think I'm trying to state that our position is that if the union and the individual employee concur, each individual employee as to his claims, then it can be done.

Justice Scalia: But...

Mr. McClain: It cannot be done...

Justice Scalia: I thought the rule was the individual employee cannot negotiate... in a unionized situation the negotiation between the employer must be through the union.

It cannot be with the individual.

So you cannot get each individual employee to agree, we'll go to arbitration on all these title VII claims, these ADA claims.

You can't go to the individual employees.

Whereas the employer who doesn't have a union, when he hires people as part of the employment contract, any disputes about title VII, about the ADA, will go to arbitration.

That would be lawful in that situation, wouldn't it?

Mr. McClain: Not if it's a condition of employment, Your Honor.

I don't believe that's Congress' intent.

Justice Scalia: Not if it's a condition of employment?

Mr. McClain: Not if it's a unilaterally imposed condition of employment.

There's no voluntary right...

Chief Justice Rehnquist: Maybe what you're saying is that the JI case law is for the benefit of the union, that you can't... the employer can't make individual contracts.

If the union wants to waive that benefit, and say... and agree that the individual can contract directly with the employer, that would be the only person who could complain.

Mr. McClain: That's correct, Your Honor, and... or the union could negotiate a framework and allow individual members of the union... the bargaining unit to opt into that framework.

Justice Kennedy: In that hypothetical could the employer make it a condition of employment?

Mr. McClain: Could the... well, the employer...

Justice Kennedy: Could the employer say, we've agreed on this framework and you're going to let me go to individual employees, but if they don't sign this they can't work for me?

Mr. McClain: I don't... well, he has to bargain with the union, and if the union doesn't... certainly if the union does not agree to make it a condition of employment the employer could not impose it unilaterally without the union's consent.

Justice Ginsburg: The union is in the driver's seat on all of this, so what you said is, the union if it wants to can say, we're going to give up the control rein that we hold over the grievance procedure and we're going to let this person make this deal with the employer, but the union stands at the gate, and unless the union says yes, the employer cannot make a deal with the individual employee, right?

Mr. McClain: That's the nature of the union's role...

Justice Ginsburg: Yes.

Mr. McClain: as exclusive bargaining agent.

Justice Ginsburg: So it is the case that in a collective bargaining situation the employer will not be able to make a Gilmer deal, because he can't deal, get past the union.

Mr. McClain: Well, but even if he made an agreement with the union and... that's correct, but even if he made an agreement with the union it would not be a Gilmer deal because individual employees have not...

Justice Ginsburg: Yes.

Mr. McClain: Don't have the power to enforce it.

Justice Ginsburg: What I mean is he can't get... he can't get... he can't go directly to the individual employee.

He can go only if the union says okay, which seems unlikely that the union's going to give up control over the grievance procedure.

Mr. McClain: Well, that may be, and then it's a question for bargaining between the employer and the union.

Argument of Barbara D. Underwood

Chief Justice Rehnquist: Thank you, Mr. McClain.

Ms. Underwood, we'll hear from you.

Ms Underwood: Mr. Chief Justice, and may it please the Court:

A worker's right to a judicial hearing on a claim of employment discrimination is an individual right that can't be waived by a collective bargaining agreement between the union and an employer.

This Court said so in Alexander in 1974 and has reaffirmed that principle many times since then.

It's a matter of statutory interpretation, as Justice Souter said earlier, and the Court said so recognizing a fundamental tension between individual statutory rights conferred by Congress and collective representation.

The Court said that unions are properly concerned with the collective interests of their members, and that it would be inconsistent with the individual focus of at least the antidiscrimination laws to let a union decide whether and how to enforce claims under those laws.

Justice Scalia: I know we said that, but I...

Ms Underwood: Well, I'd like to say that not...

Justice Scalia: I'm still not sure I understand why it's so.

It might seem...

Justice Breyer: And Alexander was different.

Justice Scalia: like my individual right to money is no less individual than my individual right not to be discriminated against.

Ms Underwood: Well, but your right to money, your wages and... except for the minimum wage requirements established by the Federal... by the Fair Labor Standards Act are precisely what the union was set up and authorized by Congress to negotiate.

This, as I said, is a question of interpreting statutory regimes, and this Court concluded correctly that there were two regimes here, one in which Congress conferred the power to invoke and waive both rights and procedures ancillary to those rights on individuals, and the other on unions, and there's an additional reason for adhering to that regime now, because...

Justice Scalia: Both of these laws apply to the employment relationship equally.

My right to get paid for the work I do is a right that relates to the employment... my right not to be discriminated against by the employer, not to be fired for reasons that would violate the ADA, they relate to the employment relationship just as well.

I don't know how you can...

Ms Underwood: That's true.

The question is, who did Congress intend to confer the power of enforcing those rights upon in a unionized workplace?

Justice Breyer: But wait, Alexander, I take it a different case.

In Alexander there was a question of a contractual claim, and the Court said that delegating to the union the power to settle the contractual claim did not delegate to the union the power to settle a statutory claim, which was a different claim, and so what you seem to be arguing is a different thing, which I would like to know the answer to.

If I say to you, I like you, you're my friend, I would like you to settle my lawsuit against somebody else, I can do that, no matter whether it comes under a statute or not, so why couldn't I say, the union is my friend.

I delegate to the union the power to settle my statutory claim against the employer in this area?

Now, I think there's a question of whether this has done that, but suppose it were absolutely clear.

The worker says, I delegate to my friend the union the power to meet with my employer and settle my statutory discrimination claim.

Is there something in the statute books that would prohibit that from happening?

Ms Underwood: Well, I think there's a question about whether Congress intended to permit unions to settle in advance, which is what this is, not to...

Justice Breyer: I mean in my case.

I have a piece of paper...

Ms Underwood: Oh, to settle the existing claim?

Justice Breyer: No.

They say, now, we settle the existing claim.

Fine.

What I do is, I say, it may be this employer, whom I don't trust all that much, will one day discriminate against me, and I hereby give to you, the union, the power to settle any future discrimination claim against me by this employer.

Is there something in the law that prohibits that?

Ms Underwood: Yes.

I would read the...

Justice Breyer: What?

Yes.

Ms Underwood: antidiscrimination laws as prohibiting that for several reasons.

One, the structural analysis that I believe the Court undertook in Alexander, because the Court said not only the contract did not give the union the power to settle the statutory... to waive the judicial forum for the statutory claim, but that it could not.

But beyond that, I think it's implausible to think that Congress gave unions the power to assert or waive their members' rights.

Justice Breyer: It wouldn't be a power given to the union.

The question would be, normally I take it you are my lawyer.

I could say to you, lawyer, if Mr. Smith ever does anything bad to me in a certain area, I hereby delegate to you the power to settle it.

Now, that's the normal background rule of law, and it doesn't limit it only to lawyers, so I suppose you'd have to find something that would suggest in this statute that although I could delegate this power to my lawyer, I couldn't delegate it to the union.

Ms Underwood: Well, one of the things...

Justice Breyer: And if so, what is that?

Ms Underwood: One of the things I'd point to is the fact that in the antidiscrimination laws, in title VII in the ADA and the ADEA, the unions are identified as potential defendants, and it seems implausible that Congress would, in the same statute that it... and there's a historical reason why that's so.

That is, the unions had been and perhaps still are sometimes participants in the discrimination.

Chief Justice Rehnquist: Why is that different from the Securities Act cases, where we've said you can agree to an arbitration, and the... you know, the obviously the arbitration is going to be against your employer, very often, or perhaps your broker, and you have a board of arbitrators in which the broker has a large part of saying who's going to be appointed.

Ms Underwood: Well, we're not challenging the Gilmer propositions that you can agree to arbitration of these antidiscrimination claims as well.

The point is that you can't... that Congress didn't intend that the union, who will frequently be, or sometimes be allied with the discriminator, couldn't... could make the agreement on your behalf, that the union doesn't have the same undivided duty of loyalty in relationship to employees, particularly with regard to these discrimination issues, as does your lawyer, whose obligation is entirely of direct loyalty to...

Justice Souter: What if... I'm sorry.

What if the employee knows all of that?

He says, look, I realize that our positions are not exactly right, but I don't want to have to go through this myself and hire a lawyer.

I'm willing to take my chances with you.

I make a specific agreement with you, the union, which says you can arbitrate and otherwise deal with my rights in any way you see fit.

Why, if the agreement is the kind of knowing agreement that I've just described, should that not be allowed, because the... I mean, the point of the ADA is to protect the person who is making this knowing and willing agreement, and if he wants to agree, why is there a congressional purpose to disallow it?

Ms Underwood: Well, I think the statutes, the antidiscrimination statutes are fairly read as reserving to the individual the right to assert or waive both the statutory right itself and the judicial forum for it, but it would...

Justice Souter: Well, why should that be, because there is such a danger that the union is going to be a coparticipant in the kind of discrimination?

Is that why you think Congress intended as a matter of law to disallow the kind of agreement that Justice Breyer has and, if not, what would the reason be?

Ms Underwood: Well, I think that's one of the reasons.

I think it's not just, however, being a coparticipant in the discrimination.

It is the nature of the union's obligation that it has a broad discretion, consistent with the duty of fair representation, to decide which claims to enforce, how vigorously to enforce them, that it may make a judgment, for example, that it would be more productive in the area of sexual harassment to negotiate policy changes with the employer and leave the pressing of individual claims alone for the time being while these general policy negotiations are going on.

Justice Ginsburg: Do I understand...

Justice Scalia: Am I missing... am I missing the boat here, or is it really not Justice Breyer's question that we have before us here?

As I understood his question, it was the individual employee who would agree to waive it, and that's not the situation here.

It was a collective bargaining agreement that this individual employee had no control over, right?

Ms Underwood: This individual employee... this compuls... this arbitration clause was a) agreed to by the union and not by the employee and 2) constructed an arbitration process that was controlled by the union and not by the individual.

So yes, it does not present the question, could such a contract exist, although I think that there's a serious question about whether it could.

I do want to address a question that was raised earlier about whether the union workplace would necessarily be a Gilmer-free world, that is to say, whether it would be possible to negotiate such contracts in the union workplace.

And I think... and the point was made, but I'd just like to emphasize it, that the union could, under Case, authorize such contracts.

It might in some workplaces be unlikely that it would do so.

In workplaces where individuals have a great deal of power themselves, union contracts often do reserve the possibility of individual contracts about all manner of things, to baseball players and people in the entertainment industry, perhaps not so often to longshoremen.

Chief Justice Rehnquist: Fickle workers, eh?

[Laughter]

Ms Underwood: Yes.

Yes.

But to return to Justice Souter's question, it would be possible... I believe the statutes prohibit the employee from delegating to the union the power to make these agreements, but another...

Justice Souter: Because the risk is just too great, right?

Ms Underwood: Yes.

But an alternative would be to indulge... to establish a strong presumption against such a delegation so that when the contract is being interpreted... and perhaps that was what informed Alexander.

After all, this Court said that if the Alexander did not in fact cover statutory rights...

Chief Justice Rehnquist: Thank you, Ms. Underwood.

Ms Underwood: because it could not.

Argument of Charles A. Edwards

Chief Justice Rehnquist: Mr. Edwards, we'll hear from you.

Mr. Edwards: Mr. Chief Justice, and may it please the Court:

We believe it's clearly a question presented to the Court to hear as to whether there should be two rules of law, one applicable to nonunion employees, and I mean that in the broader sense... that is, employees not covered by a collective bargaining agreement, rather than just simply union members, and one for those who actually are bargaining unit members.

The...

Justice Ginsburg: Either way we're going to have that, is that not true, unless we overrule Alexander, because Alexander says it comes in after the grievance and arbitration procedure has been used, and then the Court says, but title VII is something different, so there's already a separate regime.

Mr. Edwards: Well, Justice Ginsburg, in the Gilmer decision this Court brought up three issues which were not before the Court in Gilmer, and said that those three issues represented grounds upon which Alexander had continuing vitality.

Two of those grounds, I would respectfully submit, are distinctions without a difference, one being the presumption in favor of arbitration under the Federal Arbitration Act, which in my careful reading of this Court's decisions seems to be totally the same as the presumption in favor of labor arbitration.

The second was the question of, in Alexander and in Barrentine and in McDonald, the three cases that were characterized by this Court as Alexander and its progeny, the question was, what is the binding effect in terms of res judicata, collateral estoppel, issue preclusion, fact preclusion, whatever you want to call them, of an already completed arbitration award, or arbitration decision which you cannot tell from the record of the case considered the discrimination question whatsoever, and so it is certainly possible to continue to distinguish Alexander on those two bases or on the basis... on the second ground, and never get to a need to overrule.

The question, however, though...

Justice Ginsburg: I don't understand, because it seems to me that if... unless there's going to be very limited review of the arbitration, then all this is is a protraction thing.

It says, yeah, you've got your good old title VII right in court with a jury trial, but you have to wait and go to arbitration, and then whatever the result is, if you don't like it, come to court.

Mr. Edwards: Well, the question of scope of review was, of course, addressed in a sense in Alexander by saying there can be no estoppel effect whatsoever, so there is nothing to review, but the question of the scope of review of an arbitration award involving statutory claims is, of course, not properly presented in this case.

It is... that's one which has been litigated in great detail in other cases which I certainly presume are going to find their way in this direction sooner or later, and I think that one of the most instructive decisions in that regard is Judge Edwards' decision in the Cole case in the D.C. Circuit, in which he advocates a heightened scrutiny standard.

Because after all, rather than deferring to the arbitrator's contract interpretation in a statutory claim arbitration the arbitrator is, at least in some sense, resolving either questions of law or mixed questions of law and fact which go beyond the terms of the contract per se and, therefore, a court would be empowered to determine whether, in fact, the procedures employed in the arbitration, the remedies available to the grievant in the arbitration comported with title VII, the ADEA, and the Americans with Disabilities Act.

Justice Ginsburg: Well, instead of talking about Judge Edwards' decision, could you tell me how you think, if you prevail in this case, what happens when the employee says, I don't like what the union got for me, I'm bringing my own title VII case?

Can he do that?

Mr. Edwards: Certainly I can, Your Honor.

In that particular situation, if we're talking about a hypothetical employee rather than about the petitioner in this case, a hypothetical employee dissatisfied with the union's conduct of the arbitration would actually have, or the union's willingness to go forward with the arbitration would have several remedies available to them.

Justice Ginsburg: I'm not asking about several.

I'm asking about, does he have a title VII remedy?

I'm not asking anything about bad faith, duty of fair representation.

He... is this just a question of primary jurisdiction, as it seemed to be in Alexander?

Then you come to title VII.

The employee files his title VII claim.

He doesn't like the result of the arbitration, as the employee didn't in Alexander.

He comes to court, and then what?

Mr. Edwards: When he is in court he... the... a... the problem then is determining what standard of review, if any, applies to the prior arbitration proceeding, because he'd have to show...

Justice Ginsburg: Well, let me ask you...

Mr. Edwards: Yes.

Justice Ginsburg: a very particular question, then.

Mr. Edwards: Yes.

Justice Ginsburg: Title VII nowadays gives a plaintiff a jury trial.

In my case, yes or no, would my person who goes to title... who goes to court on his title VII after the grievance procedure and he doesn't like the result, does he get a jury trial?

Mr. Edwards: I don't believe so, Your Honor, because the same statute that afforded the title VII plaintiff a right to a jury trial, the Civil Rights Act of 1991 gave on the one hand, took away on the other by encouraging alternative dispute resolution through a section of that statute, a section of the... and an, virtually identically worded section of the Americans With Disabilities Act.

Justice Ginsburg: Well, now you're going on to another point about the... what was the ADR thing in the 1991 act, and I think Judge Posner takes a view of that quite different from the one that you...

Mr. Edwards: He certainly does, and...

Justice Ginsburg: But anyway, let's... so you're saying that in essence you are asking us to overturn Alexander, because you've given me the answer that if you prevail here you come to court and you get some kind of standard of review that's less than de novo, and you don't get a jury trial.

Mr. Edwards: The plaintiff in Gilmer didn't get a jury trial, either, so...

Justice Scalia: You're not asking us to agree with you on the second one.

Mr. Edwards: No.

Justice Scalia: You're just saying that that's what you think will happen, but we could agree with you as to what should happen to this case and disagree with you as to what happens when whatever the result of the arbitration is is brought before a court.

Mr. Edwards: Certainly.

Justice Scalia: I don't have to agree with both just because I agree with one.

Mr. Edwards: You do not have to agree with both.

Justice O'Connor: Now if... may I ask, Mr. Edwards...

Mr. Edwards: For that matter, you don't have to agree with either.

[Laughter]

Justice O'Connor: Mr. Edwards... Mr. Edwards.

Mr. Edwards: Yes.

Justice O'Connor: Hello.

May I ask...

Mr. Edwards: Pardon me, Justice O'Connor.

Justice O'Connor: May I ask a question of you?

Would this person, this employee have been entitled to go to grievance on this claim, this ADA claim?

Mr. Edwards: Independent of any action by the union?

Justice O'Connor: When the... the union says no, we're not going to do it.

Now...

Mr. Edwards: If that were the case, if the union had flatly refused, which is not established in the record, if the union had flatly refused, there is, as I read section 9(a) of the National Labor Relations Act, an opportunity for the individual to attempt to present a grievance on his own with the proviso that the union has to be given notice of his intent to do so, and I think he could have prosecuted it.

I will confess to Your Honor that I have no basis under this particular collective bargaining agreement for that...

Justice O'Connor: For saying that.

Mr. Edwards: For saying that.

Justice O'Connor: No.

Mr. Edwards: But this is the only employment discrimination claim that has ever arisen in this context.

Justice O'Connor: And could the grievance procedure deal with the ADA issue, do you think?

Mr. Edwards: The grievance procedure could deal with the ADA issue presented in this case because, and only because... I'm not making a position here that under the general language of the collective bargaining agreement in question all discrimination claims can be arbitrated.

There is no discri... no clause prohibiting discrimination per se in the agreement.

Chief Justice Rehnquist: But nothing that specifically includes statutory claims.

Mr. Edwards: Nothing that specifically includes statutory claims except that section 17 of the collective bargaining agreement requires that the agreement not be construed so as to violate any State or Federal laws, which would mean that, in Ceasar Wright's case, in order for an arbitrator to determine whether he wasto return to work from his medical leave of absence he would have... the arbitrator would have had to determine whether the plaintiff wasunder the terms of the ADA.

And therefore this is one of those instances in which the issue to be arbitrated is specific to a statutory claim, unlike the generalized kinds of discrimination claims that are more fairly presented in cases such as Austin, Pryner, Brisentine, and various other cases.

Justice Scalia: Why are they less specific?

I mean, give me an example of why they're less specific.

Mr. Edwards: Well, the agreements in many of those cases, not in Brisentine but in Austin and Pryner, specifically refer to statutory claims, say that statutory claims are dealt with by this agreement, that the affirmative obligations of Federal law with respect to discrimination specifically apply.

If Mr. Wright's claim had involved something less integral to contract language than the question of qualifications, then it is quite conceivable that this issue would not have been argued by us to be one committed to the grievance and arbitration process.

Justice Stevens: Mr. Edwards, may I ask you a question about the Civil Rights Act in 1991 to which you referred...

Mr. Edwards: Certainly, Your Honor.

Justice Stevens: and which you quote on your brief?

Would you assume for a moment that legislative history is relevant, and just take that premise.

Are you familiar with the passage in the House report that states that this provision was intended to supplement rather than to supplant the rights and remedies provided by statute, and that the minority had proposed a bill that would have made it clear that one was a substitute for the other, and they rejected that proposal?

Mr. Edwards: I'm quite familiar with that.

The same language appears in the conference report of the 1990 Civil Rights Act, and I believe also in the conference report with respect to the Americans With Disabilities Act.

That conference report goes on at one point to say that Alexander is the way the law ought to be applied.

However, by the time the Civil Rights Act of 1991 was enacted, Gilmer was the law of the land with respect to arbitration and much of that language in the legislative history becomes rather meaningless, and...

Justice Stevens: Why is it meaningless if it expresses an intent to adopt the earlier view?

There's nothing in the report suggests they favor the Gilmer view.

Mr. Edwards: There's no floor debate on any of this.

Justice Stevens: And it is clear, is it not, that the... a bill was proposed and rejected that would have clearly adopted your view?

Mr. Edwards: And it's also true, Your Honor, that there have been bills proposed since Gilmer was decided to overrule Gilmer, and those haven't been enacted.

Justice Stevens: Right.

Mr. Edwards: So...

Justice Stevens: We're talking about the history of the statute on which you rely, the 1991 act.

Mr. Edwards: That's correct, and in the... a statement by Senator Dole immediately prior to passage in the Senate, Senator Dole said that this provision on encouraging ADR is designed to further the goals expressed in Gilmer, so apparently there are legislators of different views which...

Of course, Senator Dole was speaking for the minority, and he had supported the bill that was rejected.

But he was speaking in favor of the bill that was signed by both Houses, and therefore... I'm...

Justice Scalia: It's really hard to tell, isn't it?

[Laughter]

Mr. Edwards: It's extremely hard to tell.

That's why I quoted...

Justice Scalia: Spent a lot of time on it, though.

Justice Breyer: Can I...

Mr. Edwards: I would hate to do that.

I think this is one of those...

Justice Breyer: If you would like... not like to spend more time on it, could I ask you the...

Mr. Edwards: Certainly, Justice Breyer...

Justice Breyer: sort of the second half of the question I asked Ms. Underwood.

You heard her response.

I don't know if you remember it.

But I was thinking of the individual employee, and he simply delegates expressly to the union the power to settle a discrimination claim under a statute, and she was taken a little aback, and she mentioned the history, and I take it the history shows that unions, too, are very much involved in discrimination, and that was one of the reasons why these acts were passed.

All right.

My question is, given that history, and given what Justice Scalia said, that we're not dealing with an individual here, we're dealing with a group of people who may or may not be focusing on what's in this particular collective bargaining agreement, and given ambiguous language in that agreement, why should there not be a presumption that there is no delegation of authority in the union to settle such claims, which are not like typical CBA claims.

The typical collective bargaining agreement, after all, sends to arbitration disputes arising under the agreement, not normally statutes, unless they're directly related to certain labor areas.

So given all that, why wouldn't we say under 301 in the discrimination area there is a presumption that the claim is not delegated to the union to settle unless it pretty clearly... you know, like a first options type of language, unless it pretty clearly says that it is, and that would solve the problem, perhaps not the way you would like it solved, but what is the objection, legally, to doing that?

Mr. Edwards: The critical problem there it seems to me is that then what would really be being said is that except under the most exceptional circumstances an employer which has a collective bargaining relationship with a union cannot have statutory discrimination claims for employees covered by that relationship...

Justice Breyer: It does not say that.

Mr. Edwards: with the arbitrator.

Justice Breyer: It says that it would have to be... it would have to be stated pretty explicitly, and now, if there is such a situation, if there does turn out to be a collective bargaining agreement where the union really goes to the employees and says, do you want us to settle these claims, and they write it right into there, and the employer signs it, that's the time to deal with the question that I asked Ms. Underwood.

But not here, where in fact it doesn't say anything like that.

It's very general.

It's vague.

It's like all other collective bargaining agreements but for the fact that it doesn't say, explicitly limited to arising under.

Mr. Edwards: I think the hypothetical assumes certain facts which are highly unlikely to occur in today's labor management workplace, but certainly if a union were to agree that individual employees could consent to arbitration, prospectively, of future disputes, then that would present a clearer case.

I do not necessarily think that it follows...

Justice Kennedy: No, no.

But Justice Breyer's question is, what's wrong with a decision... you would lose in this case, but from the standpoint of logic and rationality, what's wrong with our saying, look, these grievance procedures, grievance committees are not set up as adjudicative bodies.

They're set up to negotiate under the collective bargaining agreement having to do with longshore work.

These people don't know anything about adjudicating a claim under this act.

So what's wrong with saying that it simply doesn't cover such claims unless it specifically says so?

Mr. Edwards: I believe your question presumes, Your Honor, that labor arbitrators are less competent than other arbitrators to resolve statutory claims.

I think that...

Justice Kennedy: Well, that is part of my question.

After all, this is a grievance committee consisting mostly of employees and representatives of employers.

They're not an adjudicative body in the normal course, and why isn't... what's wrong with Justice Breyer's suggestion that we simply presume that claims of this type are not to be submitted to that kind of agent, absent specific language?

Mr. Edwards: Well, if all there were, Your Honor, were a grievance committee, I would agree with you.

However, we've got the further step of arbitration here by a neutral selected by the parties.

Justice O'Connor: Well, let me ask you on that precise point...

Mr. Edwards: Yes.

Justice O'Connor: I take it that this agreement isn't governed by the Federal Arbitration Act.

Mr. Edwards: I think that even under the broadest interpretation of the Federal Arbitration Act I would be hard-pressed to contend that the FAA covered...

Justice O'Connor: Yes, it's interstate or foreign commerce.

They're not covered by that.

Mr. Edwards: It's interstate or foreign commerce, and I think we... sections 1 and 2 of the...

Justice O'Connor: Right.

Mr. Edwards: Of the FAA just take us out of that loop, but the principles are, I would submit, the same, so I don't believe that the FAA or National Labor Relations Act issue is one that should be determinative.

Justice Breyer: Your answer is no, it does not cover it, the FAA?

Mr. Edwards: No, the FAA does not, not under binding Fourth Circuit precedent, which is what I'm having to deal with in the absence of any specific ruling by this Court.

Justice O'Connor: Well, in the language of the FAA itself, the...

Chief Justice Rehnquist: These people are longshoremen, are they not?

Mr. Edwards: They are longshoremen.

There...

Chief Justice Rehnquist: So...

Mr. Edwards: are arguments that have been raised and that I have seen concerning the FAA that say that the exclusion was intended to deal only with seamen and railroad workers, but I think that it's pretty hazardous for us to speculate about the legislative history of a statute enacted in 1925, which as has been interpreted by this court so many times...

Justice Kennedy: Is your answer to me that there's an independent arbitrator, that's only if the committee's unable to reach a majority decision within 72 hours.

Mr. Edwards: Well, actually there's a... there are two steps in the appeals process.

There's the port committee and then there's the district committee.

But in actual practice, the way it has always worked under this collective bargaining agreement, and under the bargaining agreement that applies in the five southeastern ports that have the same language, is that management votes one way, labor voters the other way.

There is a deadlock.

It goes to arbitration.

Justice Souter: But the...

Justice Ginsburg: May I ask you, Mr. Edwards, about some... a part of this picture that is troublesome to me, particularly in light of a case that we heard Monday and that I think really distinguishes Gilmer, however arm-twisting you think that arrangement might be, it's signed by the individual.

Now, we know that there are people covered by collective bargaining contracts who don't want to have one thing more to do with that union than they are absolutely forced by the law to do, so I'm thinking about, if you're right, what about Abood, Beck... do those people who say, I don't want the union to be my representative, have to say that the union is going to be in the driver's seat and handling all these claims?

Mr. Edwards: The nature of collective representation is that the union is in the driver's seat except to the extent that the individual can and will assert his or her rights under section 9(a) or can show, for example, that the grievance and arbitration process would be futile, which is quite another exception recognized by this Court on numerous occasions for avoiding a collectively bargained grievance and arbitration procedure altogether.

Chief Justice Rehnquist: How could you show that an arbitration process would be futile?

Mr. Edwards: If the grievant is able to show that there is a manifested hostility toward protected rights by the union in question, I think that brings us back...

Chief Justice Rehnquist: Well, but...

Mr. Edwards: Yes.

Chief Justice Rehnquist: But the union wouldn't control the arbitrator.

Mr. Edwards: No, the union doesn't control the arbitrator, but the union to some degree is involved in the presentation of the grievance.

Now, in... under this agreement there is no prohibition of the grievant being separately represented by counsel.

There are many agreements that do prohibit such activities, but this one does not, and so we're writing pretty much on a blank slate, and it's rather hypothetical to allege futility, or to conceive of futility in this context, and in fact...

Justice Ginsburg: My only question was...

Mr. Edwards: Right.

Justice Ginsburg: in deciding what these two statutes mean, putting them all together, isn't that a relevant consideration, that Gilmer is an individual who speaks for himself or herself.

Here is a collective bargaining contract, and it includes some people who may just love the union, other people who hate it.

Mr. Edwards: Actually, I believe it cuts in the other direction, Your Honor, because the employee covered by a collective bargaining agreement is given enhanced bargaining power, is given free representation, is given a representative experience...

Justice Ginsburg: But we know there are workers who say, we don't want it.

We just... we don't believe in unions.

We don't want to be represented by unions.

The Federal law forces us to some extent, but...

Mr. Edwards: Then that employee's remedy is the same as Robert Gilmer's remedy was.

He doesn't work there.

The situation with Gilmer was that he was faced with what by anything that any of us I think could conceive of would be properly characterized as a contract of adhesion.

He signed on to a forum which required a registration, which required the applicability of the New York Stock Exchange arbitration rules, and so to look at that as a knowing and intelligent waiver of a right to the choice of a forum is pretty much of a stretch, but the...

Justice Stevens: Yes, but at least...

Mr. Edwards: The question of...

Justice Stevens: At least...

Mr. Edwards: knowing and intelligent, it doesn't seem to me...

Justice Stevens: At least he individually, on his own, signed that piece of paper.

That's not true of this employee.

Mr. Edwards: No, it's not true of this employee.

He was represented by someone far more experienced than he in dealing with employers.

We're not talking about the kind of sophisticated employee that this Court deemed Mr. Gilmer to be.

Instead, we're dealing with an employee who the record shows has a functional fourth grade education level, and therefore the representation by a collective bargaining representative should have been quite beneficial to him.

Justice Ginsburg: But the union said they didn't want to take it, told him to go to court.

Mr. Edwards: That's not exactly correct, Your Honor.

The union said that... referred him to private counsel.

There's nothing in the record that specifically indicates whether the union refused to process his grievance.

There were, in fact...

Justice Ginsburg: But in any event, unions don't have to process every grievance.

Mr. Edwards: Certainly they don't, but from the very beginning the union recognized this as a potential ADA claim.

Counsel, or the...

Justice Souter: Which it did not want.

I mean, it seems to me that... you say, well, it didn't unequivocally refuse.

When the representative who would otherwise be pursuing the claim says, I advise you to bring it as a private action, the handwriting's on the wall, isn't it?

Mr. Edwards: They suggested that he go to private counsel.

Justice Souter: Yes.

Mr. Edwards: He went to Mr. McClain, and...

Justice Souter: They didn't want to press forward with it, which is a pretty good idea of the vigor with which they would have gone forward if they had had to.

Mr. Edwards: I don't necessarily accept that, Justice Souter, because...

Justice Souter: Not necessarily, but if you were a betting man, isn't that what you'd bet?

Mr. Edwards: No...

[Laughter]

No, I would not, because this local union has been enjoined under Boys Markets four or five times because they don't take anything to arbitration.

Most of these are individual claims, and they have to be required by the court to take them to arbitration, so this is a matter of conserving resources on their part, I would suppose.

[Laughter]

But in point of fact it winds up being more expensive than less, and that's the whole point of the arbitration choice.

Justice Stevens: And if you win with that history we'll surely cut down the volume of litigation, I guess.

[Laughter]

Mr. Edwards: I doubt that very seriously, because since the third Boys Markets injunction we obtained there have been no further wildcat strikes, so I think that the message has gotten across, and therefore I believe... and we've had numerous arbitrations since then that were not required by... or several arbitrations that were not required by court order.

With that in mind, I think that the appropriate focus really is, should it make any difference that Ceasar Wright was a longshoreman covered by a collective bargaining agreement rather than a foreman working for the same stevedoring contractor in the port of Charleston.

If one had an arbitration clause that was incorporated in an application for employment, or an employee handbook, or a policy and procedure manual, while this Court certainly hasn't squarely addressed any of those issues, it would seem to me that the clear weight of Gilmer would be that this agreement, quote unquote, reached without bargaining by the individual would be binding upon him or her as a forum choice.

Why should not an agreement reached between an employer and a collective bargaining representative who is obligated under statute and under Federal common law to provide a duty of fair representation to the employee receive a similar degree of deference?

We think that the result is quite clear, and that whatever continuing vitality there might be to Alexander has been so severely undermined both by the course of this Court's decisions and by changes in the historic framework, if you will.

In 1974, this Court was concerned with massive, systemic discrimination by employers and labor organizations.

We have come a long way since that time, and during that period of time it's instructive in my view to note that labor organizations have been accorded standing to represent the rights of members of collective bargaining units in asserting claims under title VII and other antidiscrimination statutes.

So if they can do that in court, why can't they do it in arbitration?

I see no basis for a distinction.

Thank you.

Chief Justice Rehnquist: Thank you, Mr. Edwards.

The case is submitted.

Justice Breyer: The honorable court is now adjourned until Tuesday, the thirteenth of October at ten o'clock.

Print this transcript Transcript: 

Argument of Speaker

Mr. Speaker: The opinion of the Court in No. 97-889, Wright versus Universal Maritime Service Corporation will be announced by Justice Scalia.

Argument of Justice Scalia

Mr. Scalia: This case is here on certiorari from the United States Court of Appeals for the Fourth Circuit.

Petitioner Ceasar Wright was a longshoreman in Charleston, South Carolina and a member of the International Longshoremen's Association AFL-CIO which has a collective bargaining agreement, the CBA, as we call it, with the South Carolina Stevedores Association.

The CBA contains a general Arbitration Clause which covers "matters under disputes".

In 1992 Wright was injured at work and sought compensation for permanent disability.

Under the Longshore and Harbor Workers Compensation Act, Wright ultimately settled that claim.

In 1995, he returned to work and was referred to four Stevedoring Companies through the union's hiring hall.

When the companies learned however that Wright had previously settled the claim for permanent disability they informed the union that they would no longer accept him for employment.

Instead of filing a grievance pursuant to the CBA Wright filed charges of employment discrimination with the EEOC and the South Carolina State Human Affairs Commission.

He alleged that the Stevedoring Companies refusal to hire him violated the Americans with Disabilities Act.

After receiving a right to sue letter Wright filed the present lawsuit.

The District Court dismissed the complaint without prejudice because Wright failed to use the CBA arbitration procedure, the Fourth Circuit affirmed.

In an opinion filed with the Clerk today we reverse the Fourth Circuit.

This dispute implicates two lives of our case law, a case called Alexander versus Gardener Denver decided in 1974, held that an employee does not forfeit his right to judicial forum for a Title VII discrimination claim if he first pursues his grievance to arbitration under a CBA.

A case called Gilmer versus Interstate Johnson Lane Corp decided in 1991 held that a claim under the Age Discrimination in Employment Act could be subjected to compulsory arbitration pursuant to an Arbitration Agreement agreed to buy an individual in a securities registration form.

Although these cases are relevant to our disposition of the present dispute, we find it unnecessary to resolve the question whether after Gilmer a union may waive an employees' rights to a federal judicial forum for antidiscrimination claims.

Because we conclude that in this case no such waiver has occurred.

The respondents rely upon the presumption of arbitrability we have found in Section 301 of the Labor Management Relations Act.

We conclude that this presumption does not extend beyond the reach of its principle rationale, which is that labor arbitrators are in a better position than courts to interpret and apply the terms of a CBA.

This case however ultimately concerns not the interpretation or application of a CBA but rather the meaning of the Americans with Disabilities Act.

We hold that any union negotiated waiver of employee's rights to a federal judicial forum for statutory antidiscrimination claims must be clear and unmistakable.

We do not find such a clear and unmistakable waiver in this CBA.

For that reason we vacate the judgment of the Fourth Circuit and remand the case for further proceedings.

Our opinion is unanimous.