EMPLOYERS WIN AGAIN - The United States Supreme Court Holds That Employers May Require Employees, As A Condition Of Employment, To Forego Their Right To Collective Action

Continuing to spin the “choice” fiction, in Epic Sys. Corp. v. Lewis, 2018 U.S. LEXIS 3086 (May 18, 2018), the United States Supreme Court further insulates employers from collective or class actions for violations of wage and hour laws, thereby depriving millions of workers redress. The 5-4 majority, led by Justice Gorsuch, upheld the employer’s ability to include class action waivers in mandatory, pre-dispute, arbitration agreements, ensuring that employees will not be able to collectively prosecute their claims against employers. As individual claims are often small, and the only way employees can hope to correct wage and hour violations is through collective actions, this decision is the death knell to any hope of private enforcement of the wage and hour laws. This circumstance, of course, is the goal of both the mandatory, pre-dispute, arbitration agreements and class action waivers.

As aptly noted by Justice Ginsberg in her dissent, the Court’s decision begins with the false notion that employees and employers “agree” to resolve their disputes through “one-on-one arbitration.” Id. at *7. It is high time that the Court dispense with this fiction. Employees do not “agree” to pre-dispute, mandatory arbitration agreements and do not “choose” to “use individualized rather than class or collective action procedures.” In reality, employees have no idea what these provisions mean, are not required to actually execute any such agreements, and, therefore, often do not even see these provisions. For example, in the cases before the Court, the employers e-mailed the employees the arbitration agreements, which stated that “the employees’ continued employment would indicate their assent to the agreement’s terms.” Id. at *50, n. 2. Employees have no real “choice” to accept or reject these provisions, as a refusal to consent to the terms demanded by the employer means that the employees do not get the job, without which employees cannot support their families.

Employing linguistic gyrations, and ignoring 80 years of precedent, the majority held that the Federal Arbitration Act permits employers to demand that their employees, whenever the employees seek redress for commonly experienced wage and hour violations, “go it alone,” irrespective of the right secured to employees by the National Labor Relations Act (“NLRA”), 29 U.S.C. § 151, et seq., ‘to engage in . . . concerted activities’ for [employees’] ‘mutual aid or protection.’” Explaining the danger of the Court’s ruling, Justice Ginsberg correctly iterated:

Once again, the Court ignores the reality that sparked the NLRA’s passage: Forced to face their employer without company, employees ordinarily are no match for the enterprise that hires them. Employees gain strength, however, if they can deal with their employers in numbers. That is the very reason why the NLRA secures against employer interference employees’ right to act in concert for their ‘mutual aid or protection.’

2018 U.S. LEXIS 3086, *59. The Epic decision will embolden employers, increase the use of mandatory, pre-dispute, arbitration agreements and class action waivers, and further erode employees’ rights and protections.