Supreme Court Begins New Term with Case on Arbitration for Workers
WASHINGTON D.C. - In its first argument of the new term, the Supreme Court on Monday considered whether to give employers a powerful tool to bar class actions over workplace issues. The case is the court’s latest attempt to determine how far companies can go in insisting that disputes be resolved in individual arbitrations rather than in court.
The Supreme Court ruled in earlier cases that companies doing business with consumers may require arbitration and forbid class actions in their contracts, which are often of the take it or leave it variety. Such contracts typically require two things: that disputes be resolved by arbitration and that claims be brought one by one. That makes it hard to pursue minor claims that affect many people, whether in class actions or in mass arbitration.
Justice Ruth Bader Ginsburg said there was often no point in pursuing individual arbitration because the sums at issue were too small. Jeffrey B. Wall, a deputy solicitor general who argued in favor of the employers, acknowledged that it was sometimes a consequence of arbitration agreements “that the employees would be practically unable to vindicate their claims.”He added that the Supreme Court had said as much about arbitration clauses generally in a 2013 decision concerning an agreement among businesses.
The Trump administration is backing the employers. But in an unusual twist, the National Labor Relations Board is set to argue on the side of the workers, defending its longstanding position that arbitration agreements can’t prohibit group claims. Although NLRB now has a Republican majority, its general counsel, Richard Griffin, is a Democratic appointee and is scheduled to argue the case. With Deputy Solicitor General Jeffrey Wall on the other side, it will be the first time in at least 25 years that two federal government lawyers have squared off against each other in a Supreme Court argument, Justice Ruth Bader Ginsburg said recently.
The question for the justices on Monday was whether they should use a different approach for employment contracts. The answer depends on the interaction of two federal laws. One, the Federal Arbitration Act, favors arbitration. The other, the National Labor Relations Act, protects workers’ rights to engage in “concerted activities.”Workers seeking to sue their employers for overtime pay and the like say the second law prohibits arbitration clauses that require class action waivers.
The court’s decision on the matter could affect some 25 million employment contracts. A ruling in favor of employers, Justice Stephen G. Breyer said, could cut out “the entire heart of the New Deal” and undo an understanding of labor relations with roots in the administration of President Franklin D. Roosevelt.
