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Recent Supreme Court Verdict Just Made It Harder to Sue Employers

The Supreme Court recently delivered a weighty blow to disgruntled workers who are discriminated against by their employers. The 5-4 ruling made it easier for companies to side-step employee lawsuits. The move favors the use of class-action waivers in arbitration agreements.

Workers will now need to take their disputes to arbitrators individually

At present, most employers have become accustomed to using arbitration agreements to stifle lawsuits that could result in large plaintiff classes and mammoth payouts. Because of the bad-blood between employers and workers, labor unions and employee groups sought redress before the courts in order to make right a law they believed stifled their ability to deliver in fair working environments.

In their challenge, they claimed that employers were breaking the National Labor Relations Act (NLRA), which stipulates that workers have the freedom to join forces in mutual aid and protection. However, the employer-friendly faction of the court had the last word once they decided that collective bargaining law does not supersede federal law that has mapped out the arbitration process. In effect, this made the class-action waivers in employment contracts legitimate.


Neil Gorsuch, one of the Justices, opined that Congress did not come up with the NLRA in order to displace federal arbitration law

In his argument, Gorsuch stated that while the policy may be debatable, the law was in black in white, Congress has stipulated that arbitration arguments like those presented by the workers’ unions must be enforced as written.

Previously, the high court had ruled that companies could force consumers into arbitration arguments with class-action waivers that are oft tucked in the fine print when one buys items like plane tickets or registers for a cell phone subscription. Thanks to the ruling, things are about to change as they ruling sanctions the use of those waivers in the workplace. The ruling is going to make amends for a practice that has bee existing over the last two decades.

Going forward, the Supreme Court’s ruling is going to have lasting implications with regards to the workers’ plight. This is because class-action lawsuits are usually the method of choice for employees to secure back pay once overtime or minimum wage rights have been violated. The class-action lawsuits were also preferred because they offered a leeway to get back at employers once they felt discriminated against.

Most workers prefer arbitration because compared to a group setting,  it is much harder to the cases as a single worker. In addition, most lawyers are usually reluctant to put pen to paper once they realize that the judgments and settlements will be insignificant for individual complaints. At the same time, workers like taking the group approach because they are less likely to be ostracized or face retaliation from their bosses.


On the other hand, Justice Ruth Bader Ginsburg differed with the majority’s ruling by saying that the decision was “egregiously wrong.” According to Ginsburg, the rights under the NLRA include the right to pursue litigation collectively. To her understanding, implementing employer-dictated waivers would violate this right.

In her statement, Ginsburg wrote that the employees’ rights to band together would be Lilliputian compared to what employers had in force since they would condition employment terms to the signing away of those rights

Ginsburg was of the opinion that workers strength lay in numbers. She believed that the court was mandated to protect the individual workers from being in a situation where they can’t protect their rights.

The numbers released by the Economic Policy Institute show that about 25 million workers, representing less than a quarter of non-union employees in private sector, gave up their right to be engaged in class-action lawsuits because it was a condition of their employment. According to their analysis, they anticipated that once the Supreme Court sanctioned such actions, the waivers would become more widespread.

Sheila Hobson, a former Murphy Oil employee, claimed that while working at one of the company’s retail stores, they were required to do extra work off the books without additional compensation. In a bid to stop the practice, they banded together in order to sue the company for back pay. However, they tragically later on learned through their lawyer that they could not sue the company due to the arbitration agreement signed as they took their jobs.

The National Labor Relations Board, an independent agency concerned with the enforcement of the collective bargaining law claimed that the forced arbitration clause interfered with Hobson’s right to band together with other employees to seek legal redress over work-related violations.

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