In Williams v. American Eagle Airlines, the North Carolina Court of Appeals addressed the interplay between union contracts and employment claims.  In this case, the plaintiff had been a part-time fleet service clerk for American Eagle, where she was a member of the Transport Worker’s Union, and was covered by a collective bargaining agreement.  She also had a full-time administrative position at Duke.  In 2006, the plaintiff injured her shoulder while moving luggage, started receiving workers’ compensation benefits, and eventually had surgery.  Following surgery, plaintiff resumed her duties at Duke, but did not return to American Eagle, apparently with representations that should not return to work at all.  Because of this inconsistency, American Eagle terminated her for dishonesty related to her workers’ compensation.

Rather than file a grievance through the Union, the plaintiff filed suit in state court, alleging claims for (1) breach of contract because she was fired without just cause; and (2) violation of the the North Carolina Retaliatory Employment Discrimination Act (“REDA”) because her termination was cause by her use of workers’ compensation.  At trial, the jury ruled against the plaintiff on the REDA claim, but found in her favor on the contract claims and awarded damages.

On appeal, the Court vacated the verdict because the contract claims were legally barred.  “When an employee’s claim is firmly rooted in a breach of a collective bargaining agreement and asserts no rights independent of that agreement, such claim is preempted by the Railway Labor Act (RLA).”  (The RLA governs unions in the airline industry.)  In other words, when an employee wants to challenge her termination as unlawful under a CBA, she usually must pursue the matter through the CBA’s grievance mechanism instead of in court.  As this plaintiff did that, the breach of contract claims were legally barred, and the verdict had to be vacated.

Categories: Judicial Decisions Tags: Airlines, Breach of Contract, Case Commentary, CBA, Grievance, Labor and Employment, NC Court of Appeals, REDA, TWU, Union, Workers' Compensation

Last week, the U.S. Supreme Court issued two decisions concerning whether particular issues had to be decided by an arbitrator or in federal court.  One care arose in the traditional area of labor arbitration between companies and unions; the second arose in the ever-growing area of employer-imposed arbitration agreements on regular employees.

In the first, Granite Rock v. International Brotherhood of Teamsters, the Court ruled for the company, as ScotusBlog describes:

The parties had reached a collective bargaining agreement (CBA), but they disagreed about both when the CBA was formed and who should decide that question.  Today the Court, in an opinion by Justice Thomas, held that a court, rather than an arbitrator, should decide when the CBA was formed.  The Court explained that under the CBA, arbitration is required only when a dispute “arise[s] under” the agreement – which a dispute over when the CBA was formed does not.  The Court also held that the lower court properly declined to recognize a new federal common-law cause of action against the parent international union, which – according to the employer – tortiously interfered with the CBA.

In the second, Rent-a-Center v. Jackson, the Court sided with the employer, and held that the issue of unconscionability (a challenge to whether the arbitration agreement is valid in the first place), was to be decided by the arbitrator, as Workplace Prof Blog describes:

The Court held the issue was governed by the separability doctrine of Prima Paint: an arbitration agreement is assailable only if the arbitration agreement itself — not the overall agreement of which the arbitration is a part — is assailable on state-contract law grounds.  So far, so good for Jackson — until today, this separability doctrine has been applied only when an arbitration agreement was part of a broader (“container”) agreement that was not related to arbitration — e.g., an arbitration provision in a consulting-services contract or in a larger employment contract.  Jackson’s unconscionability argument was directed squarely at his arbitration agreement.

Today, however, the Court extended Prima Paint to hold that the arbitration agreement itself can be the container contract, and that unconscionability arguments must be directed toward specific provisions of the arbitration agreement.  Jackson’s unconscionability arguments, the Court held, were directed at the arbitration agreement generally, and therefore could not be grounds for voiding the arbitration agreement as a whole.

Read the whole post for its insightful analysis of how the Court erred, once again stretching the law to give a victory to employers over employees.

Categories: Judicial Decisions Tags: Arbitration Agreement, Case Commentary, CBA, Labor and Employment, Labor Arbitration, Teamsters, Unions, US Supreme Court