Respondents are members of the Service Employees International Union, Local 32BJ. Under the National Labor Relations Act, the Union serves as the exclusive bargaining representative of employees within the building-services industry in New York City. Since the 1930s, the Union has engaged in industry-wide collective bargaining with the Realty Advisory Board on Labor Relations, Inc., a multiemployer association for the New York City real-estate industry.
Their agreement, the Collective Bargaining Agreement for Contractors and Building Owners, contains a section 30 provision stating that there shall be no discrimination on the basis of age or other protected characteristics and that all such claims shall be subject to the grievance and arbitration procedures as the sole and exclusive remedy.
Petitioner 14 Penn Plaza LLC, a member of the RAB, owns and operates the New York City office building where respondents worked as night lobby watchmen and in similar capacities. Respondents were directly employed by petitioner Temco Service Industries, Inc., a maintenance service and cleaning contractor. In August 2003, with the Union's consent, 14 Penn Plaza engaged Spartan Security, a unionized security contractor affiliated with Temco, to provide licensed security guards for the building lobby and entrances. Temco then reassigned respondents to jobs as night porters and light duty cleaners in other locations within the building, which respondents contend produced a loss in income, emotional distress, and less desirable positions.
At respondents' request, the Union filed grievances alleging that the reassignments violated the CBA's ban on workplace discrimination by discriminating on the basis of age in violation of the ADEA, along with claims that petitioners violated seniority rules and failed to equitably rotate overtime. After an initial arbitration hearing, the Union withdrew the age-discrimination grievances on the ground that its consent to the new security contract precluded it from objecting to the reassignments as discriminatory. The Union continued to arbitrate the seniority and overtime claims, which were denied after several hearings.
In May 2004, while arbitration was ongoing, respondents filed a complaint with the Equal Employment Opportunity Commission alleging that petitioners had violated their rights under the ADEA. The EEOC issued each respondent a Dismissal and Notice of Rights. Respondents then filed suit against petitioners in the United States District Court for the Southern District of New York alleging violations of the ADEA and state and local age-discrimination laws. Petitioners moved to compel arbitration pursuant to sections 3 and 4 of the Federal Arbitration Act. The District Court denied the motion. The Second Circuit affirmed. The Supreme Court granted certiorari.
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