MBTA Victory: SJC Holds MBTA Settlement Agreement Valid under Public Policy

On June 4, 2009, the Supreme Judicial Court of Massachusetts upheld an employer’s right to remedy discrimination despite potential conflicts with collective bargaining agreement (“CBA”) requirements.  The SJC held that the Massachusetts Bay Transportation Authority (“MBTA”) has the exclusive managerial right to fashion settlements in cases where it can demonstrate that there is a substantial basis to believe a violation of the laws had occurred, and further held that involvement of the union in negotiating settlements in such cases would be neither “necessary nor appropriate.”

At issue in Mass. Bay Transp. Auth’y v. Boston Carmen’s Union, Local 589, SJC-10291, was an arbitrator’s award which found that the MBTA had violated the terms of its CBA with the union by awarding retroactive seniority to settle a discrimination charge.  The SJC vacated the arbitration award, which had been upheld on appeal by the Superior Court, finding it to be contrary to the “clear and overriding legislative policy against discrimination,” stating:

“We conclude that a presumption of legitimacy arose from the settlement agreement that the union did not rebut by showing that the settlement was an attempt to subvert the collective bargaining agreement, and that because retroactive seniority is a presumptive remedy for discrimination in hiring, public policy requires the arbitrator’s award be vacated.”

The case arose from a settlement agreement entered into between the MBTA and an individual who alleged he was not hired due to his disability.  Following the MBTA’s initial decision not to hire the individual, the Massachusetts Commission Against Discrimination (“MCAD”) issued a finding of probable cause of discrimination which, in conjunction with the development of new caselaw, persuaded the MBTA that a violation may have occurred.  Through the settlement agreement, the MBTA provided the individual with employment, retroactive seniority and monetary compensation.  The union filed a grievance when this individual’s retroactive seniority rights collided with the seniority rights of another employee, arguing that the MBTA’s grant of retroactive seniority to a new employee violated the terms and conditions of its CBA.

In issuing her award on the grievance, the arbitrator rejected the MBTA’s argument that its settlement of an alleged discriminatory practice was necessitated by public policy.  The arbitrator found that absent an adjudication of discrimination by some judicial authority, the MBTA was required to conform to the terms of the CBA in employing any individual.  Whereas neither the Massachusetts Commission Against Discrimination nor any court had ruled that the MBTA had engaged in discriminatory practices, the arbitrator held that the MBTA had consequently violated the CBA and issued her award for the union.

The SJC rejected the arbitrator’s reasoning stating that “a requirement that an employer proceed to trial simply to obtain a finding of discrimination is irresponsible.  To hold otherwise would force the employer to walk a high tightrope without a net.  It would also violate the strong public policy that favors settlement of discrimination cases.”  Thus, the SJC held that where, as here, an employer enters into a settlement which is “presumptively legitimate, and where the union has not shown the settlement was a sham and in derogation of the collective bargaining agreement, public policy required the collective bargaining agreement to yield to [the] settlement agreement.”

On a related issue in the case, the SJC confirmed an arbitration award finding that the MBTA violated the terms and conditions of the CBA by unilaterally eliminating an employment list without union consent.  The SJC declared itself bound by the factual determination of the arbitrator, who did not find sufficient evidence that the list was discriminatory as no individual or agency had challenged the list.  The SJC noted, however, that if such evidence had existed, the MBTA would retain the right to take corrective action notwithstanding the objection of the union.
Mary Jo Harris represented the MBTA throughout the litigation.