WASHINGTON — The Supreme Court’s decision Monday barring millions of employees from filing class-action suits over workplace disputes drew sharp criticism from workers’ advocates, who called it a major blow to workers’ ability to challenge employers.
The far-reaching, 5-4 decision, consolidating three cases, affects 25 million non-unionized employees nationwide, and while it applies specifically to disputes involving wages and overtime, it could affect other issues, including workplace discrimination claims, critics said.
Christine Owens, executive director of the Washington-based National Employment Law Project, said in a statement posted on Twitter that the ruling “dramatically tilted the legal system against working people, paving the way for corporations to break workplace laws with impunity.”
Owens said the ruling would have profoundly negative consequences for women pursuing discrimination claims.
“The #MeToo movement has shown how critical it is for workers to be able to voice their concerns together — and how harmful forced arbitration is to women fighting sexual harassment and to anyone challenging workplace misconduct,” she said. “Forced arbitration means women have to pursue their claims alone, before a private arbitrator hired by the company, with a low likelihood of success and little chance to appeal.”
And Rep.Barbara Lee, D-Calif., tweeted:
The laws of our land should protect the people, not corporations. This disgraceful #SCOTUS decision will undermine workers' rights for generations to come and further rig the system for corporations and billionaires. https://t.co/IFTcMHqwM5
— Rep. Barbara Lee (@RepBarbaraLee) May 21, 2018
In the decision, written by President Donald Trump’s appointee, Justice Neil M. Gorsuch, the court upheld employers’ contracts forcing non-unionized employees to rely on individual arbitration, not collective actions, in disputes over wages and overtime.
Gorsuch — joined by Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Samuel A. Alito Jr. and Clarence Thomas — noted in the 61-page opinion that employees in the case had argued the 1935 National Labor Relations Act entitled them to band together in disputes with employers.
But the justices said the NLRB applies primarily to the right to unionize and bargain collectively and that the 1925 Federal Arbitration Act (FAA) makes clear that contracts requiring individual arbitration in disputes are legal and that courts have interpreted them as such.
“Should employees and employers be allowed to agree that any disputes between them will be resolved through one-on-one arbitration?” Gorsuch wrote. “Or should employees always be permitted to bring their claims in class or collective actions, no matter what they agreed with their employers? As a matter of policy, these questions are surely debatable. But as a matter of law, the answer is clear.”
But in a dissent, parts of which she read from the bench, Justice Ruth Bader Ginsburg called the decision “egregiously wrong.” Ginsburg wrote that employees in the cases had complained that employers required them to sign the contracts with individual arbitration provisions as a condition of employment and that the workers had been underpaid in violation of wage and hours stipulations of the 1938 Fair Labor Standards Act.
“The court today holds enforceable these arm-twisted, take-it-or-leave-it contracts — including the provisions requiring employees to litigate wage and hours claims only one-by-one,” Ginsburg wrote. “Federal labor law does not countenance such isolation of employees.”
Justices Stephen G. Breyer, Sonia Sotomayor and Elena Kagan joined Ginsburg in the dissent, which said that through the National Labor Relations Act, Congress intended to allow employees to “band together in confronting an employer regarding the terms and conditions of their employment.”
The dissenting opinion said, “The inevitable result of today’s decision will be the under-enforcement of federal and state statutes designed to advance the well-being of vulnerable workers.”
But Neal K. Katyal, an attorney representing the corporations in the case, argued in a Supreme Court brief, “The FAA unambiguously mandates the enforcement of the [contractual waivers of class actions], and the NLRA contains no clearly expressed congressional intention to the contrary.”
The consolidated cases the Supreme Court decided Monday are Epic Systems Corp. v. Lewis, Ernst & Young v. Morris and NLRB v. Murphy Oil USA Inc.
Judy Faulkner, founder and CEO of Epic, a Verona, Wisc.-based health care software firm, praised the high court’s decision.
“It is important that employers protect an employee’s right to file complaints, while also providing for a fair forum in which those grievances are addressed,” Faulkner said in a statement. “When it comes to grievances regarding wages and hours, we believe individual arbitration agreements strike that reasonable balance and are pleased with the court’s decision in support of this.”
Employees at Epic, the international accounting giant Ernst & Young and the El Dorado, Ark.-based Murphy Oil had argued the NLRA protected employees’ right to band together to file class actions against employers in arbitration or in court.
The Supreme Court consolidated the three cases after a split among federal appeals courts.