State labor official criticizes U.S. Supreme Court decision

Avakian says workers and businesses will be hurt by the use of arbitration clauses in employment contracts to bar workers from joining class-action lawsuits over workplace issues. High court voted 5-4 to side with the prohibition.

Peter Wong, Tuesday, May 22, 2018

State Labor Commissioner Brad Avakian says a U.S. Supreme Court decision will prove troublesome to businesses, not just workers.

“That was an absurd decision,” Avakian said Monday, May 21.

Avakian’s reference was to a 5-4 decision, which the Supreme Court issued Monday in three consolidated cases, that allow businesses to use arbitration clauses in employment contracts to bar workers from joining class-action lawsuits over workplace issues.

Under arbitration, a third party settles the dispute – and there is usually no alternative resolution.

The decision affects an estimated 25 million employment contracts.

“Arbitration agreements limit people’s ability to go to court if they want a jury trial,” Avakian said. “That was a strike against workers.”

The court ruled in a 2011 case that businesses can invoke arbitration clauses to bar consumers from filing class-action suits.

But in two of the three cases brought to the high court – all of them arguing that workers were underpaid – federal appeals courts ruled in favor of allowing class-action suits on wages and working conditions. One appeals court, however, did not – and the conflicting rulings prompted the high court to act.

Now individual workers will have to file separate lawsuits.

“For employees, class-action suits do not put all the burden of financing or supporting a case on one individual who might be going after a giant corporation,” Avakian said. “It balances the power by letting employees join together and carry the burden.”

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