Earlier this year, the Supreme Court’s conservative majority made a ruling that will likely have a considerable impact on employee rights in this country. In the case of Epic Systems Corp. v. Lewis, the court’s 5-4 decision brings attention to the issue of whether a company can require its employees to settle employment disputes through individual arbitration, rather than allowing them to combine their collective efforts to protest complaints including job discrimination, wage and hour disputes, and sexual harassment. The decision, which ruled in favor of employer, Epic Systems Corp., expands on a previous Supreme Court decision that allows corporations to avoid class-action lawsuits by enforcing contracts that require individual arbitration.
In making its decision, the Court had to interpret the Federal Arbitration Act (FAA) and the National Labor Relations Act (NLRA). According to the FAA, federal courts must enforce arbitration agreements according to their terms, including those that provide for individualized proceedings. The NLRA states that it is illegal for any contract to deny an employee the right to form or participate in labor organizations, to bargain collectively, or to engage in certain activities for the purpose of collective bargaining, or “mutual aid and protection.” The court had to decide whether the no-group-arbitration clause provides adequate grounds to prohibit employees from pursuing individual arbitration.
The Supreme Court decision, written by Justice Neil Gorsuch, ignited a debate among the liberal and conservative Justices, particularly Justice Ruth Bader Ginsburg, who described the decision as destructive to employee rights because it would prevent employees from unionizing. In his majority opinion, Gorsuch wrote that federal courts were instructed by Congress to enforce arbitration agreements according to their terms. Gorsuch also commented that Ginsberg’s objections are to policy, and those decisions are made by policymakers in those political branches. Gorsuch acknowledged that the FAA had a saving clause that urged courts to refrain from enforcing arbitration agreements that were illegal. However, the Court ruled that the FAA makes individual arbitration agreements enforceable and that the saving clause does not override the outcome.
Impact of Court’s Decision
There are millions of Americans whose employee contracts require individual arbitration over collective actions. Some argue this decision may allow employers to be less accountable to their employees. They also say it will make employees less likely to voice their concerns due to the high cost and significant amount of time and effort associated with individual arbitration. In her dissenting decision, Justice Ginsburg opined that a Congressional correction was needed in order to overturn the majority decision and protect employees. In addition to wage-related issues, this would also impact how sexual harassment in the workplace would be handled. Others believe that the decision will benefit employees because there will be an added incentive to ensure that there are fair arbitration agreements. In addition, arbitration is typically less costly than pursuing a case in court.
Philadelphia Employment Lawyers at the Law Office of Sidkoff, Pincus & Green P.C. Guide Clients in Employment-Related Disputes
If you have questions about employment contracts, contact the Philadelphia employment lawyers at the Law Office of Sidkoff, Pincus & Green P.C. at your earliest convenience. To schedule a consultation, call us at 215-574-0600 or contact us online today. Our offices are conveniently located in Philadelphia, where we serve clients throughout Southeastern Pennsylvania and New Jersey.