Supreme Court Rules Employers Can Force Workers to Sign Arbitration Agreements

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Summary: The Supreme Court ruled that employers can force employees to sign arbitration agreements. 

On Monday, the Supreme Court ruled 5-4 in favor of businesses. The highest court in the US  said that employers can block their workers from banding together to complain about pay and work conditions. According to Fox News, “The outcome is an important victory for business interests.”

  

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Many businesses have wanted disagreements between employers and employees to be settled in arbitration, but employees have fought to come together to raise grievances in court. On Monday, the conservative-led Supreme Court ruled in favor of businesses, which is a stance that the Trump administration backed.

According to Fox News, “An estimated 25 million employees work under contracts that prohibit collective action by employees who want to raise claims about some aspect of their employment.”

Monday’s decision came after the Supreme Court weighed two seemingly conflicting laws. One, the New Deal, gives workers the right to band together, while the Federal Arbitration Act encourages people to use arbitration instead of tying up the court system.

The Supreme Court was tasked on deciding whether or not it was legal for employers to force arbitration agreements, and conservative Justice Neil Gorsuch, who wrote for the majority, said that the law was “clear.”

“The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written,” Gorsuch wrote. “While Congress is of course always free to amend this judgment, we see nothing suggesting it did so in the NLRA — much less that it manifested a clear intention to displace the Arbitration Act. Because we can easily read Congress’s statutes to work in harmony, that is where our duty lies.”

Justice Ruth Bader Ginsburg wrote the dissenting opinion, and her view aligned with the National Labor Relations Board who said that contracts requiring arbitration conflicted with labor laws.

“[T]he edict that employees with wage and hours claims may seek relief only one-by-one does not come from Congress,” Ginsburg wrote. “It is the result of take-it-or-leave-it labor contracts harking back to the type called ‘yellow dog,’ and of the readiness of this Court to enforce those unbargained-for agreements. The FAA demands no such suppression of the right of workers to take concerted action for their ‘mutual aid or protection.'”

Ginsburg warned that the result of this ruling will mean federal and state statutes designed to protect workers will be underenforced. She urged Congress to correct the court’s decision with updated legislation, according to NPR.

Monday’s ruling came from three cases against big corporations where employees were required to sign arbitration agreements as a condition of employment. In those three instances, workers tried to come together to file class-action lawsuits against their employers, but the Supreme Court said that their arbitration contracts were valid.

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