The U.S. Supreme Court has sided with corporations, making it harder for employees to bring class-action lawsuits against their employers. The ruling, a split 5-4 decision with the Court’s conservatives supporting the decision, sanctions actions by companies forcing employees to sign agreements waiving their rights to class-action lawsuits and taking them to arbitration instead.
The decision can have an effect on disputes ranging from wages to healthcare to discrimination in the workplace.
The case, decided last week, involved accounting and financial services firm Ernst & Young LLP, oil and gas company Murphy Oil USA and healthcare software company Epic Systems.
The Court’s decision was criticized by labor leaders.
“Today, five justices on the Supreme Court decided that it is acceptable for working people to have our legal rights taken away by corporations in order to keep our jobs. This decision forcing workers to sign away the right to file class-action suits against such illegal employment practices as wage theft, sexual harassment and discrimination is outrageous—and it is wrong,” said Richard Trumka, President of the AFL-CIO, America’s largest labor union.
“We call upon Congress to immediately enact legislation making clear that no worker can be forced to give up their right to effectively challenge illegal conduct in the workplace in order to keep their job.”
EPIC CEO Judy Faulkner praised the ruling. “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,” she said in a statement.
Supreme Court Justice Neil Gorsuch, the Court’s newest member, wrote for the majority and found the arbitration laws which were put in place by Congress, enforceable. “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,” he wrote.
The decision effectively leaves employees to fight wage or other types of disputes on a one-on-one, individual basis. That is a far costlier option than class-action lawsuits. Class-action lawsuits usually also result in large settlements and are harder for corporations to fight than single cases.
Justice Ruth Bader Ginsburg, writing in a dissent which she read from the bench, a move reserved for showing strong disagreement with a decision, criticized the decision as heavy-handed.
“The court today holds enforceable these arm-twisted, take-it-or-leave-it contracts — including the provisions requiring employees to litigate wages and hours claims only one-by-one. Federal labor law does not countenance such isolation of employees,” she said.
The Obama administration backed a decision by the National Labor Relations Board, a federal agency that protects the rights of workers to bargain collectively, striking down such arbitration agreements in 2012. The Trump administration reversed that stance last year and sided with the corporations instead.
In a statement released after the verdict, the NLRB said it “respects” the Court’s decision and will be working to expeditiously resolve some fifty-five pending cases brought by employees over similar agreements.