U.s. supreme court upholds arbitration leader-telegram m gastrocnemius


WASHINGTON — The Supreme Court on Monday delivered a major victory to corporations by sharply restricting the rights of American workers to join together to challenge their employers for allegedly violating federal laws on wages, overtime pay or civil rights.

The justices by a 5-4 vote agreed with Trump administration lawyers and ruled that employers may enforce so-called individual arbitration agreements that require workers to give up the ability to collectively pursue claims that they were short-changed or treated unfairly.

In dissent, Justice Ruth Bader Ginsburg called the decision “egregiously wrong” and said it harkens back to the era of “yellow dog contracts.” She was referring to a pre-1930s period when workers could be forced to abide by contracts that prohibited them from joining with others, including to form a union.

Labor law experts said the impact of the ruling in Epic Systems v. Lewis will fall heaviest on tens of millions of low-wage workers who do not belong to unions. As a practical matter, they said, workers at convenience stores, restaurants, hotels or the like will find it expensive and risky to bring complaints if they must do so on their own.

Ginsburg said the “inevitable result of today’s decision will be the underenforcement of federal and state statutes designed to advance the well-being of vulnerable workers … One study estimated that in Chicago, Los Angeles and New York City alone, low-wage workers lose nearly $3 billion in legally owed wages each year.”

The ruling is consistent with a series of high court decisions over the past 25 years which have expanded the reach of the Federal Arbitration Act of 1925, a measure originally adopted to uphold commercial contracts between two companies. As a result, it is now routine for banks, credit card companies, cellphone providers and others to include arbitration clauses in their contracts. By doing so, they can prevent consumers from joining class-action suits if they believe the company has violated part of the contract.

The ruling not only affirmed employers’ ability to bind workers to arbitration, it expanded that power to include asking workers to waive the right to take collective action, even though such a right is protected by 1930s’ labor laws and 1960s’ civil rights measures. The court’s majority ruled the arbitration law in this case overrides later labor laws.

“The Supreme Court has dramatically tilted the legal landscape against working people,” said Catherine K. Ruckelshaus, general counsel for the National Employment Law Project. She said the “#MeToo” movement had also exposed the danger of arbitration clauses, which have allowed some employers to conceal sexual abuse and harassment by top executives.

About 60 million nonunionized workers in the private sector are covered by arbitration agreements that bar them going to court to sue over alleged violations of federal workplace laws, according to a survey by the Economic Policy Institute, a liberal group based in Washington. Among them, about 25 million are also required to arbitrate as individuals. Lawyers predicted Monday that number will rise quickly.

The case before the court began when several workers in gas stations in Alabama complained they were not paid overtime for working after hours. Their employer, Murphy Oil, which operates more than 1,000 gas stations in 21 states, pointed to an arbitration agreement that prohibited them from suing or joining a class complaint. The National Labor Relations Board, led by Obama appointees, ruled this restriction was an unfair labor practice. It pointed to the National Labor Relations Act of 1935 which said workers had a right to join a union or “engage in other concerted activities for … mutual aid or protection.”

It is not clear whether discrimination and civil rights claims will be affected. Gorsuch’s majority opinion did not mention the issue. In dissent, Ginsburg said it “would be grossly exorbitant” to read the ruling so as to “devastate” discrimination claims under the Civil Rights Act of 1964.

Epic Systems Corp., a Verona, Wis.-based provider of health care software, said it was pleased with the 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,” Epic founder and chief executive Judy Faulkner said in a statement. “When it comes to grievances regarding wages and hours, we believe individual arbitration agreements strike that reasonable balance.”