Just today, this morning, the Supreme Court of the United States (more specifically, the conservative faction of the court) voted 5 — 4 to allow weakened enforcement of the National Labor Relations Board and to allow employers to circumvent labor unions and employee complaints. This was part of a ruling on Epic Systems Corp. Vs. Lewis.
The dispute started over contradictory federal laws. The 1935 National Labor Relations Act (Wager Act) guarantees collective bargaining rights to unions and bars employers from shutting down dissent. However, a law passed just ten years earlier, named the Federal Arbitration Act, encourages the use of private, individual arbitration courts to settle public legal disputes.
In April 2014, Epic Systems, a Wisconsin-based company, sent a letter to their employees demanding that all disputes with the company be settled via arbitration. In February 2015, Jacob Lewis, an employee at the company, filed a lawsuit alleging that his employer had violated various New Deal-era worker protections by doing so. That’s where the conundrum between two different federal laws comes in.
It should not be surprising that our bought and paid for government, (yes, even the law) is siding with big business. Court Republicans have effectively demolished decades of labor laws and employee protections. The ramifications are that employees and unions are incrementally forced to sign away their labor rights, despite them being guaranteed by the law.
National Law Review Reports:
‘’Welcome news for many employers rolled out of Washington, D.C. earlier this morning. The Supreme Court has ended a long-running debate over the enforceability of arbitration agreements with class action waivers in the employment context, particularly as applied to the wage and hour class action litigation. In short, such waivers are enforceable and do not violate the National Labor Relations Act.
Today’s long-anticipated ruling has its genesis in the 2011 opinion AT&T Mobility Servs. v. Concepcion, where the Court held that individual arbitration provisions in consumer contracts were enforceable and precluded parties to such contracts from bringing or participating in class action litigation. In the wake of Concepcion, some employers adopted arbitration agreements with class action waivers as potential insulation against wage and hour class action litigation. A historic legal battle touched off from there.’’
Wired adds:
‘’The Supreme Court case centered around clauses in employment contracts that require employees to resolve disputes through arbitration, and preclude them from joining with others to file class-action lawsuits. In a 5-to-4 decision, the court ruled that those clauses are enforceable under federal law, which means companies can prohibit employees from banding together both privately or in court.
Such binding-arbitration clauses are widely used at technology companies, and critics say they helped allow sexual harassment to flourish by hiding complaints. More recently, some firms have taken steps to limit the practice. Uber last week said it would eliminate arbitration agreements for employees, riders, and drivers with sexual misconduct claims. (The company is still blocking riders from pursuing class action.) In December, Microsoft said it would stop enforcing arbitration agreements in sexual harassment cases. In March, however, Google filed a motion trying to compel a sexual harassment case from former engineer Loretta Lee to arbitration.’’
What’s further egregious is that the National Labor Relations Board ruled against these waivers, arguing (reasonably, of course) that they violated the Wager Act and other New Deal worker protections. Similarly to now, the courts ignored this obvious fact, and completely rejected the policy judgement from the NRLB. The argument from the courts and the conservative faction of SCOTUS is that the FAA overrides the NLRA, despite them being two equally legitimate federal laws. This is probably the case because our legal system has been bought and paid for big business, who were secretly hoping for this outcome anyways. The National Law Review continues:
‘’Within a year, the National Labor Relations Board (“NLRB”) concluded (in apparent contradiction to an NLRB General Counsel guidance memo issued two years earlier) that class action waivers violated protections on “concerted activity” found in the National Labor Relations Act (“NLRA”). Multiple federal appellate courts then rejected and refused to enforce NLRB decisions finding such class action waivers unlawful, yet the NLRB refused to follow the direction from the federal courts and continued finding such waivers violated the NLRA. This standoff continued for several years, with even the California Supreme Court rejecting the NLRB’s position and finding class action claims under the California Labor Code could be precluded by individual arbitration requirements, but “representative” claims under the state’s “Private Attorneys General Act” could not. More recently, a handful of federal district courts and ultimately three federal appellate courts adopted the NLRB’s position – setting the stage for Supreme Court showdown.
As many expected, the Court split 5-4 along perceived ideological lines, with Chief Justice Roberts and Justices Thomas, Alito and Gorsuch joined by likely swing vote Justice Kennedy to form a five-justice majority. Writing for that majority, Justice Gorsuch suggested that there is little legal basis to conclude that the NLRA overrides the federal policy in favor of arbitration as set forth in the Federal Arbitration Act, such that arguments to the contrary ultimately depend primarily upon policy considerations, not statutory and case law authority.’’
However, Democrats on the court had a rebuttal to this argument. Ruth Bader Ginsburg, a left-leaning justice, had a (possibly excellent, you decide) response to Neil Gorsuch’s argument that the FAA overrides the NLRA. Here is what she had to say after the conclusion of the case.
‘’In her dissenting opinion, Justice Ruth Bader Ginsburg called the decision “eggregiously wrong.” She said requirements to use arbitration “does not come from Congress. It is the result of take-it-or-leave-it labor contracts harking back to the type called ‘yellow dog,’ and of the readiness of this Court to enforce those unbargained-for agreements.”
Finally, the ruling had some unexpected opposition, although not for quite the reasons I was initially thinking and definitely not in the right spirit.
‘’Lina Khan, director of legal policy at the think tank Open Market Institutes, said the law “incentivizes companies to abuse” their power. Businesses that don’t employ such agreements “will now be at a competitive disadvantage,"
I do not usually agree with these corporatist, free-market think tanks like Cato and AEI, but Lina is correct, this ruling could indeed spark a race to the bottom in which private businesses compete to get rid of labor rights and employee dissent (as fast as possible.) Millions of workers would be in the way, so it would not be long until the damage is done. Watch out!