State labor official criticizes U.S. Supreme Court decision

Posted by National Alliance for Fair Contracting on
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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Editorial: After Supreme Court decision, Congress must preserve workers’ right to sue

Posted by National Alliance for Fair Contracting on

Los Angeles Times May 22, 2018

A divided Supreme Court undercut American workers on Monday, ruling that employers can bar employees from bringing class-action lawsuits over wage and workplace disputes.

The court held in Epic Systems Corp. vs. Lewis that the right to collective actions guaranteed by the National Labor Relations Act does not bar employers from requiring disputes to be resolved individually through arbitration, as provided by the Federal Arbitration Act.

“As a matter of policy these questions are surely debatable,” Justice Neil M. Gorsuch wrote for the majority. “But as a matter of law the answer is clear.”

Whether the court’s decision is sound law is an argument for those versed in the fine details of statute and precedent. But mandatory arbitration is bad policy, and bad for workers.

Congress should step in restore workers’ ability to seek redress in the courts – either individually or as a group – rather than let bosses bar the door to the courthouse.

According to the Economic Policy Institute, some 60 million nonunionized private-sector employees work under agreements that preclude them from suing their employers over workplace disputes.

Arbitration can be a useful way of resolving a conflict without the expense and time investment of going through the courts.

But arbitration agreements are fair only if the two sides entering into them do so willingly and on equal footing.

If employers routinely force applicants to sign away the right to sue in order to get hired, then the two sides are clearly not entering arbitration willingly or as equals.

And studies have found that workers win arbitration cases at lower rates than they do court cases.

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