24 May 2018

Employees can wave goodbye to waivers as US Justices rule on class action bans

The US Supreme Court has sided with employers as it cleared the way for the requirement of employees to sign away their right to pursue class actions in a controversial ruling.

In a partisan 5-4 ruling, with conservatives in the majority, the US Supreme Court endorsed the legality of the growing practice by companies to compel workers to sign arbitration agreements waiving their right to bring class-action claims on various disputes, primarily over wages and hours.

Workers demanding waivers
Growing numbers of employers, alarmed by a rise in class-action claims brought by workers on wage issues, have demanded that their workers sign waivers. Attorneys say this will translate to millions more workers being bound by class waivers. The justices held that mandatory arbitration agreements must be enforced under the Federal Arbitration Act according to their terms, even if those terms include individual arbitration. Workers have fought back against the waivers, arguing that the cost of pursuing their cases individually in arbitration is prohibitively expensive. The ruling does not affect workers represented by unions. The ruling could apply more broadly to discrimination claims like those raised by women as part of the #MeToo movement raising awareness of sexual harassment in the workplace but the court did not explicitly address that issue.

Partisan division
The Justice Department said it was pleased with Monday’s ruling. Democratic former President Barack Obama’s administration had supported a decision made by the National Labor Relations Board in 2012 invalidating such employment agreements. The board at the time had a Democratic majority. Justice Neil Gorsuch, President Donald Trump’s appointee to the court, wrote the ruling that federal arbitration law does not conflict with the National Labor Relations Act, which outlines the right of workers to act collectively. He wrote, ‘The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written.’ Writing in dissent on behalf of the court’s four liberals, Justice Ruth Bader Ginsburg called the ruling “egregiously wrong” and urged Congress to take action to protect workers’ rights. Ginsburg said she does not believe the ruling would apply to certain claims alleging discrimination on the basis of race, gender, religion or national origin covered by Title VII of the landmark federal Civil Rights Act.