Luis Vega v. New Forest Home Cemetery, LLC, 856 F.3d 1130

Vega, a seasonal employee, worked for New Forest and was covered by a collective bargaining agreement (CBA) with a four-step grievance process culminating in arbitration; the CBA defines “grievance” to include disputes concerning pay.
New Forest discharged Vega and did not pay about 54 hours of wages for his last two weeks, allegedly because he lacked a valid Social Security number.
Vega claims he contacted a union steward and left messages for a union representative about unpaid wages; union representatives deny he sought their help.
Vega sued in federal court asserting an FLSA minimum-wage claim and pendent state-law claims; New Forest moved to dismiss (converted to summary judgment) arguing Vega failed to exhaust the CBA grievance procedure.
The district court granted summary judgment for New Forest, concluding Vega was required to follow the CBA’s grievance process before suing; the court relinquished supplemental jurisdiction over state claims.
The Seventh Circuit reviewed de novo and reversed, holding the CBA did not clearly and unmistakably require arbitration/grievance of statutory FLSA claims, so Vega was not barred from suing in court without exhausting the grievance process.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the CBA requires exhaustion of the grievance/arbitration process before a court may hear an FLSA minimum-wage claim	Vega: FLSA rights are independent of the CBA; absent clear and unmistakable waiver, he may sue in court	New Forest: CBA defines grievances to include pay disputes, so Vega must use the contractual grievance process first	Held: CBA does not contain clear and unmistakable language incorporating statutory FLSA claims into the grievance process; Vega need not exhaust before suing
Whether Vega’s purported attempts to invoke the union’s grievance process (or futility) were required to avoid dismissal	Vega: He attempted to contact union reps and deemed further pursuit futile	New Forest: Vega did not exhaust the multi-step contractual procedure	Held: Court did not need to resolve exhaustion/futility because CBA did not clearly preclude filing suit on FLSA grounds in any event

Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728 (1981) (FLSA rights are distinct from contractual rights and cannot be waived by private agreement)
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (arbitration agreements can cover statutory claims if the agreement is validly made)
14 Penn Plaza LLC v. Pyett, 556 U.S. 247 (2009) (a CBA can require arbitration of statutory claims if it states so in clear and unmistakable terms)
Wright v. Universal Maritime Serv. Corp., 525 U.S. 70 (1998) (general arbitration language without explicit incorporation of statutory rights is not sufficiently clear and unmistakable)
Jonites v. Exelon Corp., 522 F.3d 721 (7th Cir. 2008) (general CBA grievance language did not constitute an explicit waiver of the right to sue under federal statute)
McCoy v. Maytag Corp., 495 F.3d 515 (7th Cir. 2007) (employees generally must exhaust contractual grievance remedies for contract claims)
McLeod v. Arrow Marine Transp., Inc., 258 F.3d 608 (7th Cir. 2001) (same exhaustion principle for contract-based claims)
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (agreeing to arbitrate a statutory claim does not forgo substantive statutory rights)
Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974) (addressed interplay of arbitration/contract grievance and statutory discrimination claims)
McDonald v. City of West Branch, Mich., 466 U.S. 284 (1984) (precedent on arbitration and statutory claims interplay)