Mathews v. Denver Newspaper Agency LLP, No. 09-1233 (10th Cir. May 17, 2011)

By Paul Mollica

A Title VII national-origin, race and retaliation opinion, amended and re-published today by the Tenth Circuit, creates a split with the Second Circuit, holding that an labor arbitration award – though admissible to prove or disprove a Title VII or § 1981 claim – does not entitle the award winner to a presumption in its favor in litigation.

Mathews v. Denver Newspaper Agency LLP, No. 09-1233 (10th Cir. May 17, 2011): Since the Supreme Court’s decision in Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974), recently reconsidered and revised by 14 Penn Plaza LLC v. Pyett, 129 S. Ct. 1456 (2009), courts have occasionally addressed the question of whether a labor arbitration of a workplace grievance under a collective bargaining agreement (CBA) has no, some or a strong effect on a subsequent civil action under Title VII. Pyett held that a labor arbitration may be fully preclusive of a later action if the CBA requires that employees grieve and arbitrate statutory civil-rights claims.

But many CBAs do not require that statutory claims be arbitrated. And where the employee has arbitrated only his or her contractual claims, there is no bar to the filing of a subsequent civil action based on the civil rights laws.

The Second Circuit has held that a CBA arbitration award in favor of the employer, though not fully preclusive, nevertheless carries presumptive weight in civil litigation. Where an employee has had an opportunity to arbitrate the claim and lost, “to survive a motion for summary judgment, [the plaintiff] must present strong evidence that the decision was wrong as a matter of fact – e.g. new evidence not before the tribunal – or that the impartiality of the proceeding was somehow compromised.” Collins v. N.Y. City Transit Auth., 305 F.3d 113, 119 (2d Cir. 2002).

Presented with an opportunity to adopt the Second Circuit’s “strong evidence” rule in the present case, though, the Tenth Circuit declines.

The record before the Tenth Circuit, in brief, was that the plaintiff was demoted from Unit Manager after a co-worker complaint that he made inappropriate remarks to a female colleague. Under the company’s CBA, he grieved and then arbitrated his demotion, claiming that it was motivated by his nationality (Indian) and by his previous complaints of race, color and national-origin discrimination. At the arbitration, the employer prevailed; the arbitrator held that “Mathews was demoted not because of his national origin, but rather because a number of complaints had been submitted against him, such that the Agency ‘began to entertain a good faith concern whether [Mathews’s] personality . . . was such as to allow him to be an effective supervisor.'” The plaintiff then filed a civil action.

In the district court, the employee lost summary judgment on both his discrimination (demotion) and retaliation claims, on the ground that the arbitration award precluded relitigation under Alexander and Pyett, because the arbitration was a waiver of the employee’s right to litigate.

The Tenth Circuit holds that the district court erred in so holding:

“Although the parties acknowledged that violations of statutory law would also constitute violations of the contract, this does not mean that the CBA covered statutory claims or that the parties believed it to do so. Indeed, the district court’s conclusion ignores the ‘distinctly separate nature’ of contractual and statutory rights, which is ‘not vitiated merely because both were violated as a result of the same factual occurrence.’ Gardner-Denver, 415 U.S. at 50. This reasoning does not change even though the contours of the CBA’s anti-discrimination protections were defined by reference to federal law. See id. at 54. Rather, unionized employees of the Agency subjected to discriminatory treatment hold two similar claims, one based in statute, and one based in contract. The operative question remains whether the CBA’s arbitration provisions are broad enough to encompass Mathews’s statutory claims, such that his submission to arbitration operated as a waiver of forum or election of remedy.

“Applying Supreme Court precedent to the facts of Mathews’s case, it is evident no waiver of judicial forum has occurred. Again, such a waiver may only occur where the arbitration agreement expressly grants the arbitrator authority to decide statutory claims. . . . The dispute submitted to arbitration by Mathews asserted a violation of Article II, Section 11 of the CBA and a vague complaint of retaliation, but no statutory claims under Title VII or 42 U.S.C. § 1981. Because the arbitration agreement empowered the arbitrator to resolve only the dispute submitted, and because the dispute submitted made no mention of statutory claims, the arbitral decision could in no way determine the question of Mathews’s statutory rights.”

The Tenth Circuit goes on, nevertheless, to affirm summary judgment on the discrimination claim on the merits (holding that the employee was judicially estopped from proving that he was qualified for the position, because of inconsistent representations that the made about his fitness for duty to the Social Security Administration).

But the panel reverses summary judgment on the retaliation claim. Here, the employer made the Second Circuit per se argument that the plaintiff failed to present “strong evidence” that the arbitration award should not be given presumptive weight. The Tenth Circuit holds that the “strong evidence” does not accord with Alexander or its progeny: 

“This court has not adopted the Second Circuit’s per se ‘strong evidence’ standard, and there is no need to do so now. In Gardner-Denver, the Supreme Court counseled that, when evaluating a plaintiff’s statutory discrimination claims arising out of the same facts as a previously arbitrated contract dispute, the arbitrator’s prior decision ‘may be admitted as evidence and accorded such weight as the court deems appropriate.’ 415 U.S. at 60. The Court clarified that it could prescribe no fixed standard as to the probative weight accorded to such an arbitral decision, ‘since this must be determined in the [trial] court’s discretion with regard to the facts and circumstances of each case.  Id. at 60 n.21. . . . In light of the Supreme Court’s clear directive to accord weight to prior arbitral decisions on a case-by-case basis, a per se standard is inappropriate and we will not affirm the grant of summary judgment on that basis.”