In Epic Systems Corp v. Lewis, a 5-4 decision issued on May 21, 2018 (PDF), the United States Supreme Court held that employer-imposed mandatory arbitration clauses that prevent employees from filing class actions in court are enforceable.
This decision, written by Justice Neil Gorsuch, eviscerates the rights of countless employees whose employers have forced them to sign mandatory arbitration agreements. These “agreements,” which many employees have no choice but to sign because of their limited bargaining power, prohibit employees from banding together to enforce their rights in court through class or collective actions.
Instead, these provisions require employees to pursue arbitration, a private proceeding that often favors employers, on an individual basis.
In Epic Systems, the plaintiffs are employees who allege that their employers violated the Fair Labor Standards Act by underpaying them. As Justice Ruth Bader Ginsburg noted in her dissent, “Individually, their claims are small, scarcely of a size warranting the expense of seeking redress alone… But by joining together with others similarly circumstanced, employees can gain effective redress for wage underpayment commonly experienced.”
Justices Breyer, Sotomayor, and Kagan joined Justice Ginsburg’s dissent. However, the majority sided with the businesses accused of underpaying their employees, concluding that the National Labor Relations Act, the Norris-LaGuardia Act, and the savings clause of the Federal Arbitration Act do not create an exception to the enforcement of arbitration clauses. They reached this faulty conclusion despite the text, history, and established interpretation of the NLRA, which clearly states:
“Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection…” 29 U. S. C. §157.
The dissent concluded that mandatory arbitration agreements are unlawful because “other concerted activities… [in pursuit of their] mutual aid or protection” includes the right to pursue work-related litigation on a joint basis.
But the majority disagreed, resulting in an opinion that essentially legalizes wage theft, the harm the plaintiffs were trying to redress through class action litigation. This Supreme Court decision makes it easier for employers to get away with exploiting workers in ways that are difficult for individual employees to address on their own.
Now it is up to Congress to fix the Supreme Court’s mistake. A legislative fix, such as by passing a law that prevents employers from stopping employees from pursuing class actions, can only happen if constituents contact their lawmakers to tell them how much workers’ rights matter to them.
Contact your representative and Senators today and let them know you disagree with this decision, and that you care about worker’s rights. Then remember their responses to this issue when it is time to vote.
Text: WLP Staff Attorney Amal Bass
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