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Contractual Restrictions Against Forum Shopping May Be Illegal

September 8, 2017

Many collective bargaining agreements restrict employees from pursuing the same complaint in multiple forums. For example, if an employee files a grievance over an employment issue but then files a complaint or charge of discrimination, involving the same issue, with a state or federal agency, then often the collective bargaining agreement terminates the grievance or holds it in abeyance, pending the outcome of the agency or court decision. According to a September 1, 2017 majority opinion of the United States Sixth Circuit Court of Appeals, contractual restrictions against an employee's legal options may be per se legally invalid. Watford v Jefferson County Public Schools, U.S. Court of Appeals No. 16-6183 (CA 6, 2017)(recommended for publication). Although this case originated out of the United States District Court for the Western District of Kentucky, it still has special significance for Michigan's private and public sector employers because the State of Michigan is within the jurisdiction of the United States Sixth Circuit Court of Appeals. 

The Jefferson County Public Schools District terminated a teacher for misconduct, including insubordination. The teacher filed a grievance under the collective bargaining agreement, claiming her termination was due to discrimination on the basis of race, sex, and age. Before the grievance proceeded to binding arbitration, the teacher filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC). The collective bargaining agreement restricted an employee's choice of remedies. If an employee opted to pursue a complaint using another agency, then the collective bargaining agreement required that the grievance/arbitration proceeding be held in abeyance until the agency complaint was resolved.

After the teacher filed her charge of discrimination with the EEOC, the employer and labor organization held the teacher's grievance in abeyance in compliance with their collective bargaining agreement. The teacher filed another charge of discrimination and retaliation with the EEOC accusing both the employer and her labor organization of retaliating against her for filing her first EEOC charge. After the EEOC issued its determination of reasonable cause to believe retaliation occurred, the teacher filed a complaint with the United States District Court alleging age, race discrimination, and retaliation. The United States District Court for the Western District of Kentucky dismissed the teacher's retaliation claim. 

The majority opinion of the United States Sixth Circuit Court of Appeals reversed. The contractual restriction was "retaliatory on its face." The majority opinion treated this contractual restriction as a material adverse employment action. In fact, the majority opinion found that there was no measurable difference between terminating a grievance/arbitration procedure, which has been held as an adverse employment action, and holding a grievance/arbitration proceeding in abeyance. Both the school employer and the labor organization retaliated against the teacher by including the "abeyance provision" in their collective bargaining agreement. 

There was a strong dissent. The dissent disagreed that the teacher suffered an adverse employment action when her grievance was held in abeyance pursuant to a contractual limitation on forum choices. The dissent expressed concern over eroding arbitration as a favored means of dispute resolution, observing that "there is no obligation for an employer to agree to an expedited grievance procedure." If employers are forced to simultaneously defend litigation on multiple fronts, then employers may abandon grievance arbitration as a preferred method of dispute resolution, forcing court actions that would likely increase costs to all parties and delay disposition of claims. 

In light of the Watford decision, employers should exercise caution in applying grievance/arbitration restrictions that limit an employee's choice of forum, especially in connection with filing charges of discrimination with state and federal agencies such as the EEOC. We encourage employers to review contractual grievance/arbitration provisions with their Clark Hill Labor and Employment Law attorney. Please contact Marshall Grate if you have questions regarding this e-alert.

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