United States Supreme Court Hears Influential Worker Case

Violations of wage and hour regulations have become particularly common in a variety of industries. This creates substantial obstacles for workers because there are often few available remedies. Some of the available options including filing a complaint with the appropriate state’s Attorney General or a government agency like the National Labor Relations Board. Some workers decide to pursue a class action lawsuit against their employer in a court of law.

In a recent decision by the United States Supreme Court, however, employees who are bound by arbitration agreements will now have a much harder time pursuing legal actions. As a result, employers will also now be able to force workers to give up potential arguments concerning wage and hour issues in a court of law and as a class action. 

The Popularity of Arbitration Agreements in the United States

Arbitration agreements have become very popular in the United States because they force workers to give up the option to pursue matters in a court of law. Arbitration is also much more expensive for workers because they are often required to pay private arbitrators as well as legal counsel.

How the Case Arose

The case in question actually marked the consolidation of three separate cases, each questioning the value of arbitration clauses. The first case, Ernst & Young LLP v. Morris, involved workers at the accounting firm of Ernst & Young who had signed employee contracts that required arbitration. The employees in the case argued that Ernst & Young had violated the Fair Labor Standards Act in connection to overtime pay. The second case (National Labor Relations Board v. Murphy Oil USA, Incorporated) involved employees who brought an action against the petrochemical company, Murphy Oil. The employees argued that Murphy Oil violated the Fair Labor Standards Act, but had signed an arbitration agreement as part of an employment contract. The third case, Epic Systems Corporation v. Lewis, involved workers at Epic Systems, which is a Wisconsin healthcare company. In 2014, the company required workers to agree to a new employee policy that required them to use individual arbitration. One employee who was a technical writer agreed to the terms, but later brought legal action against the company due to violation of the Fair Labor Standards Act.

The Supreme Court’s Majority Opinion

Issued in May of 2018, the Supreme Court’s decision in Epic Systems Corporation v. Lewis sided with the employers. Writing for the majority, Justice Gorsuch held that the Federal Arbitration takes authority over the National Labor Relations Act, which means that class action waivers in arbitration agreements are enforceable and not a violation of labor relations laws. In the opinion, the Court also noted that arbitration agreements can be considered valid even if workers do not sign them.

The Supreme Court’s Minority Opinion

In a dissent to the opinion, Justice Ginsburg predicted that this decision will weaken federal and state statutes that are designed to protect the rights of workers. The dissent also argued that the arbitration agreements involved in the case should have been held as unlawful.

Speak with a Seasoned Employment Law Attorney

It is uncertain how many workers in the country have signed arbitration agreements. A large number of companies, however, require employees to sign arbitration agreements that also waive class action rights. If you need the assistance of a seasoned employment law attorney, contact Herrmann Law today.