After Supreme Court decision, Congress must preserve workers' right to sue

After Supreme Court decision, Congress must preserve workers' right to sue

But the problem with the ruling goes much further: The entire decision is premised upon a massive fiction: that these arbitration agreements, wherein the worker loses all access to court to bring a collective action with her fellow workers, are the result of an agreement between the workers and the employer.

The nation's highest court ruled Monday that employees who agree to "mandatory arbitration" clauses in employment contracts lose the right to form class-action lawsuits, one of the most powerful deterrents against corporate misbehavior. The majority rejected contentions that a separate law guarantees workers the right to join forces in pressing claims.

A U.S. Supreme Court decision this week dealing with employee-employer litigation has some clear winners and losers in the eyes of New Jersey legal experts. Historically, arbitration agreements often contain waivers for class and wage-and-hour collective actions.

The court's conservative majority said that the 5-to-4 ruling was a logical reading of federal law, and Congress' preference for using arbitration to avoid costly and time-consuming litigation. Practice shows that arbitration nearly always is controlled by companies.

But as Justice Ruth Bader Ginsburg pointed out in her stinging dissent, the reality of the NLRA is that it was enacted to overcome the long history of anti-union law and practice, including the notorious "yellow dog" contract, in which employees agreed not to join unions.

"As I see it, in relatively recent years, the court's Arbitration Act decisions have taken many wrong turns", Ginsburg wrote.

"The inevitable result of today's decision will be the underenforcement of federal and state statutes created to advance the well-being of vulnerable workers", Ginsburg wrote. But under the Epic Systems decision, laws aiming at the "wellbeing of vulnerable workers" will be "underenforce [d]". Ginsburg successfully issued a similar call a decade ago, urging Congress to bolster the rights of women to press equal-pay lawsuits. Liberals tend to think that without the lawyers to aggregate the claims and bring them, companies would get away with systematic illegal conduct.

The Economic Policy Institute, a Washington, D.C., nonprofit think tank, notes: "For over eighty years, the National Labor Relations Act has guaranteed workers" right to stand together for "mutual aid and protection' when seeking to improve their wages and working conditions". The 1935 law protects "concerted activities" by workers, without explicitly mentioning lawsuits. Between 2009 and 2017, says Resnik, AT&T had between 85 million and 140 million customers, but only 60 of them, 60, availed themselves of the arbitration system to resolve disputes. They have to do only with collective bargaining and "closely related" activities "such as picketing", he wrote, not to the terms of employment contracts. But it does not express approval or disapproval of arbitration.

Seen from this perspective, the class-action suits look like exactly the sort of collective, "concerted" employee activity that the NLRA was created to permit. "It does not even hint at a wish to displace the Arbitration Act".

"Millions of workers will be impacted by this", he said.

Kristen Clarke, president of the Lawyers' Committee for Civil Rights Under Law, said she fears the decision will have far-reaching effects. The group includes the accounting firm Ernst & Young LLP, which was fighting allegations that it misclassified thousands of employees to make them ineligible for overtime pay. Based on the savings clause in the Federal Arbitration Act that allows for general contract defenses, the employees argued that their arbitration agreements (insofar as they prohibited class actions) were invalid under the National Labor Relations Act. At the time, the board's general counsel was a Democratic appointee.

While the decision was largely supported by the business community, some Democrats in Congress said the ruling was a call for action. Getting "a day in court" - in this case, a hearing on the merits - is an extremely valuable thing, especially in cases where learning why the employer acted the way it did and being able to tell your story is likely to clear emotions and promote dispute resolution. That's because arbitration, if certain safeguards are provided, provides a cheaper, more informal mechanism for workers to assert their claims than class-action suits.

In a paper published earlier this year in the North Carolina Law Review, Cynthia Estlund, a professor at the New York University School of Law, determined the vast majority of workers who sign arbitration agreements do not seek any legal redress when they believe an employer violated their legal rights.

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