Originally from Employment Arbitration - 2nd Edition

The Fountainhead Cases

Thomas E. Carbonneau

(i) The Ruling in Gardner-Denver

When compared to contemporary judicial decisions on arbitration, Gardner-Denver is a relic of a by-gone age—both in its reasoning and result. It is also the case most often pitted against Gilmer v. Interstate/Johnson Lane Co., which heralds the “new age” view of employment dispute arbitrability. In Gardner-Denver, the U.S. Supreme Court gives primary importance to the policy objectives underlying the implicated federal statute, attributes unique significance to the activity of the judicial branch of government, and actually states that arbitration is not necessarily a suitable framework for the adjudication of all claims. Under the holding in Gardner-Denver, a worker with a civil rights grievance can either participate in collective-bargaining arbitration and then file a lawsuit or take the Title VII claim directly to court and forego completely the grievance-arbitration machinery under the collective bargaining agreement.

The Court’s distinction regarding the source of rights is a critical factor in the opinion and in the holding of doctrine. The Court concludes that the arbitrator has exclusive jurisdiction to rule on contract matters, but no similar authority to rule on statutory claims because these claims involve rights that proceed from the exercise of governmental power, not private agreement. The arbitrator has the authority to resolve disputes that arise from the implementation of the collective bargaining agreement, but not disputes involving rights created by U.S. congressional legislation. Both types of disputes, however, occur in the workplace and involve the same parties, circumstances, and interests. Therefore, the Court’s disposition undermines—to some extent—the integrity of the dispute resolution mechanism provided for by the collective bargaining agreement. It places a higher importance upon the political values that Congress endorsed in the civil rights legislation and upon the unique ability of the judicial process to recognize, define, and protect those rights.