Workplace Issues

Supreme Court Rules Employers Can Require Class-Action Waivers

Justices split along ideological lines in a controversial ruling that some see as a blow to workers' rights.
William SprouseMay 22, 2018
Supreme Court Rules Employers Can Require Class-Action Waivers

The U.S. Supreme Court ruled Monday that employers could block their workers from joining together as a class to fight legal disputes in arbitration agreements.

The opinion, delivered by Justice Neil Gorsuch, is seen as a major victory for employers and for the Trump Administration in the biggest business case of the term.

Justice Ruth Bader Ginsburg, who read her dissent from the bench, called the majority opinion “egregiously wrong” and suggested it could resurrect contracts that bar employees from joining unions.

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“The court today holds enforceable these arm-twisted, take-it-or-leave-it contracts — including the provisions requiring employees to litigate wage and hours claims only one-by-one. Federal labor law does not countenance such isolation of employees,” she said.

Gorsuch said the decision did nothing to override previous actions by Congress and that the rights of workers to join unions and engage in collective bargaining “stand every bit as strong today as they did yesterday.”

In general employers would rather settle disputes with employees through arbitration. The ruling allows employers to require employees to sign class-action wavers that prevent them from pursuing challenges together.

“Today’s ruling is a major blow for the rights of employees, who almost never have enough of an interest, by themselves, to take the time and resources to litigate claims against their employers — especially claims concerning underpayment of wages,” Steve Vladeck a professor at the University of Texas School of Law, told CNN.

“This is the Justice Gorsuch that I think most everyone expected. … Not only is he endorsing the conservative justices’ controversial approach to arbitration clauses, but he’s taking it an important step further by extending that reasoning to employment agreements, as well.”

Employees and their advocates say bringing claims on an individual basis is more expensive and more intimidating. They argued that the National Labor Relations Act precluded waivers that required arbitration to be conducted on an individual basis.

The case is Epic Systems v. Lewis.