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Today the U.S. Supreme Court delivered a sweeping victory to American business and an equally sweeping defeat to American workers. The court gave the green light to employers who want to bar their workers from bringing class-action suits in court as a condition of employment. The vote was 5 to 4. NPR legal affairs correspondent Nina Totenberg reports.
NINA TOTENBERG, BYLINE: The conservative majority upheld and extended the growing practice adopted by American businesses, namely requiring workers to agree as a condition of employment not to go to court over wage and hour disputes but to instead submit their claims to binding arbitration individually. Today the justices added that employers may bar class-action suits in court as well. Employment lawyers were elated.
Lawyer Ron Chapman, who represents management in labor-management disputes, said he expects small and large businesses alike to immediately move to impose these binding arbitration contracts in order to eliminate the fear of costly class-action verdicts from juries.
RON CHAPMAN: It gives employers the green light to eliminate their single largest employment law risks with the stroke of a pen.
TOTENBERG: Many workers don't even know that they've waived their rights to go to court as a condition of employment. Indeed, the lead plaintiff in the case was an IT worker at Epic, the giant health care software development company. He got an email notifying all employees that they would be barred from joining any workplace class-action lawsuit. By clicking that they received the notice, it turned out he was agreeing to the contract as a condition of continued employment.
The Epic workers as well as junior accountants at Ernst & Young and employees at a Murphy Oil gas station went to the National Labor Relations Board contending that such class-action bans were a violation of federal law. That law guarantees the rights of workers to engage in activities for the purpose of collective bargaining or any other concerted activities. The NLRB agreed with the workers in 2014, as did the Obama administration Justice Department. But the Trump administration reversed that decision and sided with the employers when the case was argued in the Supreme Court.
Today Trump appointee Neil Gorsuch, writing for the court majority, said that provision of the 1935 Labor Act that the workers rested their case on is clearly trumped by the Federal Arbitration Act that was enacted 10 years earlier. He said that Congress never intended a provision aimed at collective bargaining in the union context to guarantee workers the right to bring class actions in court.
Justice Ruth Bader Ginsburg, in a rare oral dissent from the bench, called out the majority for what she said was an egregiously wrong decision. The court endorses nothing more than an arm twisted, take-it-or-leave-it agreement forced upon employees, she said. She noted that the workers' claims are usually small. Indeed, she noted that the typical Ernst & Young employee would likely have to spend $200,000 to recover only $1,800 in overtime pay.
For this reason, she said, relatively few workers avail themselves of the arbitration option, and many are fearful of retaliation. The inevitable result of today's decision, she added, will be huge under enforcement of federal and state laws designed to advance the well-being of vulnerable workers. It's up to Congress, she said, to correct the court's action now.
Labor law experts said today's decision likely will present increasing problems for the #MeToo movement and for other civil rights class actions claiming discrimination based on race, gender and religion. There's no transparency in most binding arbitration agreements, and they often include non-disclosure provisions. Yale law professor Judith Resnik observes that today's decision applies to all manner of class actions.
JUDITH RESNIK: What this says is that when you buy something, use something or work for someone, that entity can require you to waive your rights to use public courts.
TOTENBERG: Cornell labor law professor Angela Cornell expects the number of these litigation waivers to skyrocket now.
ANGELA CORNELL: What we see is the privatization of our justice system.
TOTENBERG: Nina Totenberg, NPR News, Washington.
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