The Supreme Court’s decision Monday allows companies to require workers to sign away the ability to bring class-action claims against management on various disputes, primarily over wages and hours. The justices, in a 5-4 ruling, with the court’s conservatives in the majority, endorsed the legality of the growing practice by companies to compel workers to sign arbitration agreements.
The justices said arbitration agreements that bar employees from joining together in arbitration or a class-action lawsuit to settle labor disputes are enforceable under the Federal Arbitration Act.
Justice Neil Gorsuch, President Trump’s appointee to the court, wrote the ruling, joined by the four other conservative justices. Gorsuch wrote that federal arbitration law does not conflict with the National Labor Relations Act, which outlines the right of workers to act collectively. “The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written,” Justice Gorsuch wrote in the majority opinion.
Worker rights advocates also warned the ruling will likely lead to more businesses placing “take it or leave it” clauses in their contracts, meaning people will have to waive their right to join a class-lawsuit before they can even be hired.
Growing numbers of employers, alarmed by the rise in class-action claims brought by workers on wage issues, have demanded that their workers sign waivers. Class-action litigation can result in large damage awards by juries and is harder for businesses to fight then cases brought by individual plaintiffs. Attorneys who defend employers argue arbitration is more affordable for everyone involved.
In delivering the court’s opinion, Gorsuch rejected the argument that the National Labor Relations Act (NLRA), passed in 1935, makes the arbitration agreements unenforceable. Specifically, the challengers pointed to a provision in that law giving workers the right to organize “and engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection”
“The NLRA secures to employees rights to organize unions and bargain collectively, but it says nothing about how judges and arbitrators must try legal disputes that leave the workplace and enter the courtroom or arbitral forum,” Gorsuch wrote.
The three consolidated cases decided on Monday involved professional services firm Ernst & Young LLP, gas station operator Murphy Oil USA Inc., and healthcare software company Epic Systems Corporation.
The Supreme Court in the coming weeks is due to rule in another workers’ right case involving a conservative challenge to fees that public-sector worker, like police and teachers, who are not union members are forced to pay to unions in certain states to cover the expenses of collective bargaining.
