US Supreme Court Rules That Employers Can Ban Class-Action Lawsuits In Blow To Workers’ Rights

Ted S. WarrenAP Images

In what’s being viewed as a blow to workers’ rights that has implications to sexual harassment and discrimination lawsuits brought by employees, the U.S. Supreme Court has ruled that employers can require workers to waive their right to participate in class action lawsuits as a condition of employment. Voting was close with the decision passing 5-4. Justice Neil Gorsuch and the other four conservative justices voted in favor of the decision. The case had been under consideration since October, making it the longest-pending case before the justices, according to USA Today.

The goal set forth for the Supreme Court was to reconcile two decisions that seemed to contradict each other. New Deal labor laws gave workers explicit rights to pull together while the Federal Arbitration Act encouraged arbitration instead of lawsuits.

Three cases were heard and served as the basis for Monday’s ruling by the Supreme Court. All of those cases involve pay issues, but critics of the decision believe it will hurt employees who want to bring action against their employers for discrimination or sexual harassment. Management attorneys say it will protect employers from costly litigation that stretches across long periods of time. The ruling is consistent with the court’s historic tendency to favor arbitration over lawsuits. Justice Gorsuch wrote the decision which stated in part, “As a matter of policy these questions are surely debatable. But as a matter of law, the answer is clear.”

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Justice Ruth Ginsburg wrote of the belief of herself and the other three dissenting judges that the decision is “egregiously wrong.” She warned that it would likely lead to a lack of enforcement of both federal and state laws intended to “advance the well-being of vulnerable workers.” The Chicago Tribune reports that she also expressed a concern that employees may be discouraged from raising issues in the workplace because monetary awards given as a result of individual arbitration often is not enough to cover the employee’s cost of going to arbitration. Many employees sign agreements to forfeit their right to class action lawsuits without giving it much thought because it is often a condition of employment. Because of this, Justice Ginsburg also commented that the agreements in themselves give employers too much power and are in reality “arm-twisted, take-it-or-leave-it contracts.” Also in her written statement was this.

“When workers charge their employers with unlawful conduct – in this case, violations of laws governing wages earned and hours worked – there is strength in numbers.”

The Supreme Court is also considering a case related to the ability of public employee unions to collect dues from non-members in 24 states. That decision is expected to be against the unions with the same 5-4 split as Monday’s workers’ rights decision.