Courts & the Law

High Court ruling deals a blow to workers’ rights, class actions claims

Last month, in the Epic Systems, Corp. v. Lewis decision, the U.S. Supreme Court all but obliterated the ability of workers who are victims of the same workplace abuse to join together to bring class or collective actions, or to pursue their claims in court. The right of workers to join together to enforce workplace laws is the cornerstone of national labor policy. Federal law gives employees the right to engage in “concerted” – or group – activities for their “mutual aid or protection” and prohibits employers from interfering with this right. Unfortunately, Justice Gorsuch’s opinion held that despite that right, it is acceptable for employers to force their employees, as a condition of employment, to sign mandatory arbitration clauses which include class or collective action waivers.

These mandatory arbitration clauses bar employees from bringing their wage and hour, discrimination, and other employment claims as class or collective actions or from obtaining relief on behalf of a group of workers. Instead, employees must pursue their claims in closed-door individual arbitrations—an expensive process that has been shown to favor corporations over individuals.

Large employers have been requiring their employees to sign away their right to bring class and collective actions or to go to court with increasing frequency. Last year, a report by the Economic Policy Institute found that more than half of private sector nonunion employees were already subject to forced arbitration clauses and 30% of those employees had also signed class action waivers. In the wake of Justice Gorsuch’s Epic Systems opinion, those numbers are sure to increase. These agreements are good for employer because they know that if an individual employee has to pursue their claim alone, chances are slim they will actually pursue it. Not only do the workers risk termination or other forms of retaliation, but in the case of unpaid wage claims, the expense of litigating a case can easily dwarf the amount of unpaid wages for an individual employee. It is far more economical to pursue those claims as a group.

This type of systemic wage theft is no small problem. Earlier this month, a new report by Jobs with Justice and Good Jobs First, found that since 2000, employers have paid out $8.8 billion to employees in wage theft litigation. Not only that, the giant companies in the Fortune 500, Fortune Global 500 and Forbes list of largest privately held firms are some of the worst offenders, with Walmart leading the pack.

Because arbitration takes place in a private forum the decisions are usually secret and do not have the effect of curbing bad behavior by these employers by bringing it to light or by allowing victims to band together. The #MeToo movement has shown that when sexual harassment and sex discrimination violations are dealt with individually and in secret, the perpetrators- be they elected officials or large corporations – will continue to break the law.

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