In July 2026, the U.S. Court of Appeals for the Second Circuit issued a significant decision limiting a union’s ability to bind former bargaining-unit members to agreements executed after their employment ended. Although the case arose in the context of mandatory arbitration of wage-and-hour claims, the court’s reasoning may have broader implications for collective bargaining agreements (“CBA”), memoranda of agreement (“MOA”), side letters, grievance settlements, and other agreements negotiated after an employee has left the bargaining unit.
The 1199 SEIU v. PSC Community Services Decision
In 2019, 1199 SEIU arbitrated statutory wage-and-hour claims against more than 40 New York City-area home care employers on behalf of more than 100,000 current and former employees. The union relied on a 2015 MOA that required statutory wage claims to be resolved through binding arbitration rather than litigation. The arbitrator ultimately awarded individual damages and directed the creation of a wage fund totaling approximately $30 million.
Several affected workers, however, had left their employment and the bargaining unit before the 2015 MOA was negotiated. Some had already filed wage-and-hour lawsuits in state court before the MOA was executed.
In 1199 SEIU v. PSC Community Services, the Second Circuit held that the arbitration awards could not bind those former employees absent evidence that they had expressly or impliedly authorized the union to continue representing them after they left the bargaining unit. Because the workers were no longer represented by the union when the MOA was negotiated, the union lacked automatic authority to waive their right to pursue statutory claims in court.
The court also held that whether those former employees were bound by the arbitration agreement was a question for the court—not the arbitrator—to decide. Neither the CBA nor the MOA clearly and unmistakably delegated that threshold issue to the arbitrator. As a result, the former employees were permitted to intervene, and the arbitration awards were vacated to the extent they purported to bind those individuals. Those employees remained free to pursue their claims in state court.
The Governing Rule
A union possesses broad authority under federal labor law to negotiate on behalf of employees within its bargaining unit, including the authority to agree to mandatory arbitration of statutory claims. That authority, however, generally extends only to employees the union represents at the time the agreement is executed.
The Second Circuit adopted a rebuttable presumption that a union does not continue to represent former bargaining-unit members after their employment ends. While that presumption may be overcome, there must be evidence demonstrating that the former employee authorized the union to continue acting on his or her behalf or that other facts establish continuing representative authority.
Relevant considerations include the individual’s employment status, continued union membership, any individual agreements with the union, the nature of the rights at issue, and other evidence demonstrating the parties’ understanding regarding continued representation.
Implications for NYECA Contractors
Although 1199 SEIU involved the enforceability of an arbitration agreement, its reasoning may extend well beyond dispute-resolution provisions.
The decision serves as a reminder that a newly negotiated CBA, MOA, side letter, project labor agreement, or grievance settlement may address events that occurred before the agreement was executed, but it does not automatically bind every individual who previously performed bargaining-unit work. Even where an agreement contains retroactive language, retroactivity alone cannot create representative authority that no longer exists.
Accordingly, when evaluating whether a subsequently negotiated agreement applies to a former employee, contractors should consider at least two threshold questions:
If the answer to the second question is no, the agreement may not bind that individual absent separate evidence of authorization.
How the Ruling Affects Union Retirees
The decision also raises questions regarding retirees and the extent to which they remain bound by agreements negotiated after retirement.
The U.S. Supreme Court addressed this issue in Allied Chemical & Alkali Workers v. Pittsburgh Plate Glass Co. (1971), holding that a fully retired employee with no reasonable expectation of returning to work is generally outside the bargaining unit, even if the individual remains a union member or continues to receive collectively bargained retirement benefits such as a pension. Consequently, a union ordinarily lacks statutory authority to bind such retirees to later agreements.
That said, the analysis remains fact-specific. For example, where a union negotiates changes directly affecting retirees’ accrued retirement benefits or other vested rights, retirees may be deemed represented for those limited purposes. Whether a retiree is bound by a subsequent agreement therefore depends on the nature of the rights involved and the scope of the union’s representative authority with respect to those rights.
Bottom line
For NYECA contractors, 1199 SEIU is fundamentally a decision about representative authority and consent. While a union may negotiate broad contractual provisions for employees it currently represents, it cannot automatically bind former employees or fully retired workers to agreements executed after they leave the bargaining unit.
Accordingly, contractors should carefully evaluate whether post-employment agreements are enforceable against former employees or retirees. The critical inquiry is not simply whether an agreement contains retroactive language, but whether the union possessed authority to act on behalf of the individual when the agreement was negotiated. That question may determine whether the agreement is enforceable or whether the individual remains free to pursue claims outside the contractual framework.