When you sign a job contract, read the fine print: If it contains a mandatory-arbitration clause, you’re likely signing away your rights, too. In a decision last month that will have widespread ramifications, the Supreme Court basically barred workers nationwide from launching class-action lawsuits against employers. In the ruling in the case, Epic Systems Corp. v. Lewis, five justices made it that much harder for workers to collectively seek justice in court against employers’ abuses at work.
For an individual worker, the ruling would channel a typical workplace grievance—even one dealing with major questions of civil and labor rights—into an individual mandatory-arbitration process, effectively controlled by the employer. These mandatory-arbitration procedures are just like a regular court…except that the judge is your boss and the jury is stacked with corporate attorneys. With virtually no rules on transparency or discovery, your rights are compromised before the “trial” begins.
The class action, on the other hand, is one of the key legal mechanisms workers have to raise their collective voice on issues of wage theft, discrimination, sexual abuse, and other rights violations at work. Even those not in a union can join a broad, self-defined class of plaintiffs sharing a grievance (like a warehouse that pays all workers below minimum wage, or a supervisor known to target women workers for sexual harassment). Class-action suits have been an extremely effective mechanism for seeking justice for violations ranging from unsafe working conditions to racially biased hiring.
According to Celine McNicholas, director of labor law and policy at the Economic Policy Institute (EPI), the majority ruling, which takes an extremely pro-business reading of employment law, is “striking at the heart of workers’ ability to act collectively, which makes it all the more difficult for them to access not only wage-and-hour protections but, obviously, discrimination protections across the board.”
In the Epic Systems ruling, nothing less than the enforcement of civil-rights law at work is at stake. In 2001, a landmark sex-discrimination case brought by Walmart workers went to the Supreme Court, which determined that Walmart had systematically discriminated against 1.6 million women workers by paying them at a lower scale than male coworkers. Thanks to their certification as a legal class, the women won an historic settlement and changed the company’s policies against gender discrimination. But since then, various changes to court procedures and now the added final blow of Epic Systems have built a brick wall around giant employers like Walmart. In the future, big-box retailers might be shielded from lawsuits by workers bringing wage-and-hour claims on a big-box scale.
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In a typical individual arbitration, the company orchestrates the proceedings, so even workers protesting, say, the top manager’s racial epithets or the company’s wage theft schemes will be judged by a tribunal controlled by the alleged abuser. By contrast, in a class action, workers collaboratively challenge violations in a transparent public arena. But without the ability to pool claims together, poorer workers face daunting financial barriers due to high litigation costs. So the Epic Systems ruling renders workers virtually defenseless, as long as they are barred from banding together on a claim.
Faced with such high barriers to justice, McNicholas says, “being able to have that leverage that they can exert when they’re acting in concert with one another is critical to them to be able to access their rights.” And bosses have much less to fear for flouting labor standards, explains McNicholas, when arbitration contracts provide “a way of employers getting around all of the hard-fought, hard-won worker protections that exist across different statutes.… you waive it on your first day on the job.”
Forcing workers to sign arbitration agreements is already a widespread practice; binding arbitration contracts are estimated to cover some 80 percent of private-sector employees by 2024. The Epic Systems ruling “will leave more than 85 million workers subject to mandatory arbitration agreements with class and collective action waivers,” according to the EPI.
The case is especially relevant for the future of the enforcement of the National Labor Relations Act, as the ruling turns on the question of whether federal workplace rights also extend to taking legal action as a collective. The Court sided with the bosses, ruling that, outside of the union context, the nation’s central labor law doesn’t allow workers to band together to fight labor violations affecting a whole workplace. The impact will be compounded by a parallel ruling in a separate Supreme Court case, Janus v. AFSCME, which is expected to stifle unions’ ability to effectively represent workplaces in collective-bargaining agreements. While unions will suffer from that ruling, the Century Foundation’s Moshe Marvit and Leo Gertner point out that Epic Systems threatens “to destroy the protections that non-union workers currently enjoy for actions taken short of filing lawsuits.” The perverse reading of labor law by “Gorsuch and his conservative billionaire backers…places workers’ concerns on wage theft, racial discrimination, sexual harassment, immigration, safety issues, and other matters beyond the NLRA’s purview.”
The #MeToo movement has highlighted another common use of legal gags imposed on workers: Non-disclosure agreements and forced-arbitration systems are a convenient tool for silencing the claims of survivors, forcing them to agree to a settlement check and a lifetime of silence. Recently legislation and policies have been proposed to curtail the use of mandatory arbitration in consumer and sexual-harassment claims, but the Epic Systems ruling highlights how the assault on access to justice poses a risk for all workers as well.
“There’s never been a more important time for worker advocates to really speak up and to demand something of government,” McNicholas says, “so that labor and employment rights don’t get so marginalized that there’s no path back…to meaningful protections.” With the nation’s courtrooms now closing off to workers’ rights, the labor movement’s ability to hold employers accountable might soon hinge instead on the ultimate judgement at the ballot box: “We absolutely have to demand that we have folks in office who prioritize these issues above and beyond all else.”
For now, the high court has outsourced its judicial duties to the quasi-tribunals of corporate America; its verdict is that the struggle for justice at work is simply none of the public’s business.
