Second Circuit Rules Union CBAs Can't Bind Former Employees to Later Arbitration Agreements
Unionized employers and their in-house labor counsel must revise post-employment dispute processes after a Second Circuit ruling found unions lack authority to bind former employees to arbitration terms in later-negotiated collective bargaining agreements.
The U.S. Court of Appeals for the Second Circuit recently held that labor unions have no authority to bind former employees to arbitration and alternate dispute resolution provisions included in collective bargaining agreements (CBAs) negotiated after the employees’ separation from the workforce. The ruling rejects the longstanding practice of unionized employers relying on these post-employment CBA terms to resolve ex-employee claims including wrongful termination and wage disputes outside of court. In-house counsel for unionized employers should review existing CBA language and current post-separation dispute protocols, and work with labor counsel to modify future CBA negotiations to address this limitation, including exploring alternative dispute resolution frameworks for post-employment claims that do not depend on union binding authority.