BY JADEN MOUNT
As of Monday, May 21, employers in the United States can celebrate a newly won victory in the courts. In a 5-4 vote, the U.S. Supreme Court ruled in favor of employers over employees in the use of individual arbitration, instead of the courts, to settle disputed issues.
Marcia Coyle of The National Law Journal sat down with PBS William Brangham to explain the case.
“There were a group of workers for three different companies who wanted to bring claims against their employers, generally wage and hour claims,” said Coyle. “And some of them wanted to band together as a group because the amount of money involved individually was not a lot.”
Coyle would go on to explain that when these employees tried to work together, the employers said they could not due to workplace arbitration agreements that prohibit collective or class actions. The employees argued those agreements violated the 1935 National Labor Relations Act. Employers fired back with the Federal Arbitration Act, enacted in 1925.
Though arbitrators are generally supposed to be neutral, but, as the individual is found by the employer, many workers are concerned that neutrality will be compromised. This led to employees favoring collective and/or class actions over arbitration.
The majority of justices who voted in favor of the employers were made up of the conservative members. Trump nominated Justice Neil Gorsuch wrote the major opinion stating, “As a matter of policy these questions are surely debatable. But as a matter of law the answer is clear.”
Justice Ruth Bader wrote in dissent of the matter, saying the decision was “egregiously wrong” and likely to lead to “huge underenforcement of federal and state statutes designed to advance the well-being of vulnerable workers.”
The decision does not affect any worker represented by labor unions. However, it does affect employees with contracts that prohibit collective or class action.
Various organizations and individuals are taking different stances on the issues. Some lawyers are arguing that the decision will safeguard businesses from the costly litigation process. Others say that this decision will bring only more matters to the Supreme Court on topics such as racial discrimination.
The Trump Administration backed the decision as it has shown since reversing the prior administration’s pro-employee stance last year. In contrast, the United States National Labor Relations Board argued that established labor laws conflict with contracts that waive an employee’s right to collective action.
Former member of the board and current general counsel of the AFL-CIO union federation, Craig Becker said in a Reuters’ article that the decision will have a “chilling effect” on employees
Becker added, “It will cripple enforcement of all the major employment laws.”
As the court is composed of a conservative majority, employees might find no surprise that more decisions that favor employers will be made in future cases.