Seventh Circuit Finds Collective Bargaining Agreement Arbitration Clause Not ‘Sufficiently Specific’

Schnader Harrison Segal & Lewis LLP

Schnader Harrison Segal & Lewis LLP

Considering an airline’s appeal, the Seventh Circuit in Cloutier v. GoJet Airlines LLC, provided additional guidance about what is needed to require arbitration of federal antidiscrimination claims.

The case involved a dispute between a pilot diagnosed with Type II diabetes and the airline. Under FAA regulations, he was not permitted to pilot an airplane until he received medical clearance from an FAA-approved doctor, a process that would take at least 60 days. After notifying the airline of his diagnosis, the pilot received leave under the federal Family and Medical Leave Act. However, the airline terminated his employment weeks later.

The pilot and his union sought to arbitrate a grievance under the collective bargaining agreement, but the airline, claiming the pilot improperly commenced the arbitration, refused to arbitrate. Consequently, the pilot brought his claims in court.

The district court denied the airline’s motion to dismiss for lack of subject matter jurisdiction. Eventually, the parties tried the case to a jury, which found the airline had violated the FMLA and retaliated against the pilot for exercising his FMLA rights.

On appeal, the central question was whether the district court erred when it denied the airline’s motion to dismiss and refused to compel arbitration. The Seventh Circuit observed that statutory employment-related discrimination claims may be subject to compulsory arbitration under a collective bargaining agreement; however, to be binding, the agreement to arbitrate statutory antidiscrimination claims must be “explicitly stated” in the bargaining agreement.

The airline argued that the pilot was required to arbitrate his claims because reading various provisions of the bargaining agreement together unmistakably required that FMLA claims must be resolved in mandatory arbitration. The Seventh Circuit reviewed its own decisions and those of other appellate courts and concluded that the language in the bargaining agreement was insufficiently “clear and unmistakable” to require arbitration. In one provision, the agreement stated that a “grievance is a dispute between the parties arising under the terms of this Agreement.” Another provision stated that the “Company shall grant family and medical leaves in accordance with applicable law.” The Seventh Circuit ruled that the language the airline relied upon requiring arbitration of grievances was a “nondescript catch-all” that did not specifically provide that it was incorporating FMLA claims into the arbitration agreement. Thus, the mandatory arbitration terms were too general to meet the “explicitly stated” threshold established by the Supreme Court to require arbitration of statutory federal anti-discrimination claims. Notably, the Court did not address the inconsistency between the airline’s initial position―that the pilot had not properly commenced the arbitration―and its later position that arbitration was mandatory.

If parties intend to subject federal statutory anti-discrimination claims to mandatory arbitration under a collective bargaining agreement, they must make that agreement express in the terms of the agreement; Cloutier shows that specific references to statutory antidiscrimination claims are necessary. The parties cannot rely on sweeping, general arbitration provisions. Cloutier v. GoJet Airlines LLC, 996 F.3d 426 (7th Cir. 2021).

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