What do you think? Leave a respectful comment.

Supreme Court delivers blow to workers’ rights, making it more difficult to sue employers

In its latest major ruling affecting corporate America, the Supreme Court split 5-4 in upholding the practice of arbitration, a blow for workers' ability to take collective legal action against their employers. Marcia Coyle of The National Law Journal joins William Brangham to discuss what it means for the balance of power in the workplace.

Read the Full Transcript

  • Amna Nawaz:

    There was major legal news out of Washington today. The Supreme Court weighed in once more on the balance of power between workers and employers.

    William Brangham has more.

  • William Brangham:

    This is the latest major ruling affecting corporate America to come out of the court under Chief Justice John Roberts.

    Today, the focus was on workers' ability to take collective action, legal action against their employers. Many non-union workers are blocked from doing that because of their employment contracts. Instead, they must take their claims to what's known as arbitration, a process labor groups say unfairly benefits companies.

    In a 5-to-4 ruling today, the court ruled that the practice is allowable under federal law.

    Here, as always, to dissect what the justices wrote is Marcia Coyle of "The National Law Journal."

    Welcome.

  • Marcia Coyle:

    Thank you.

  • William Brangham:

    So, tell us what the cases were that were involved here today and what the justices ruled.

  • Marcia Coyle:

    OK.

    There were a group of workers for three different companies who wanted to bring claims against their employers, generally wage and hour claims, and some of them wanted to band together as a group because of the amount of money involved individually wasn't a lot.

  • William Brangham:

    They were saying, we weren't paid appropriately by the company?

  • Marcia Coyle:

    That's correct. They maybe were misclassified, and some felt they deserved overtime.

    So when they brought those claims and tried to band together, they were told by their employers, you cannot do this. Under our workplace arbitration, agreement we prohibit collective actions or class actions.

    The workers then turned around and they challenged this ban in their arbitration agreement, saying that it violated the National Labor Relations Act, which, as you know, William, applies not just to union workers, but applies to almost all private employees in the United States.

    And it protects or guarantees the workers' rights to engage in collective action, to unionize or to do it just for their mutual aid and protection.

    So that was the issue that came before the Supreme Court. The employers say, no, the Federal Arbitration Act says that arbitration agreements have to be enforced according to their terms.

    The issue before the Supreme Court was, you know, what gives?

  • William Brangham:

    Which law?

  • Marcia Coyle:

    Does — right, does the National Labor Relations Act, which, by the way, was enacted in 1935, does that prevail, or does the Federal Arbitration Act enacted in 1925 prevail?

    Justice Gorsuch led the 5-4 majority in this case. The other four justices with him were on the conservative side of the court, and he ruled that the Federal Arbitration Act says you have to enforce the agreement according to its terms. Workers, you cannot band together. You have to bring your claims individually.

  • William Brangham:

    Can you explain for people who haven't been following along what an arbitration clause essentially says?

  • Marcia Coyle:

    Basically, it's saying that, if you have a claim against the employer, you have to go into private arbitration.

    In that kind of a proceeding, generally, the employer finds an arbitrator — there are associations of arbitrators — to come in. It's supposed to be a neutral arbitrator to hear your claim and make a decision. You are bound by that decision.

    And roughly 25 million employees in the United States are under these arbitration agreements that include bans on collective or class actions.

  • William Brangham:

    And these are clauses many times people have no idea they're really even signing.

  • Marcia Coyle:

    Generally not. Sometimes, they're in very small print. That's often the case with consumer arbitration agreements. Back in 2011, the Supreme Court upheld class action bans in consumer arbitration agreements.

    This was sort of the last battleground for employers, workplace arbitration agreements.

  • William Brangham:

    So, Judge Gorsuch wrote the majority opinion for the conservatives.

  • Marcia Coyle:

    This was sort of the last battleground for employers, workplace arbitration agreements.

  • William Brangham:

    Judge Gorsuch arbitration agreements.

  • Marcia Coyle:

    Yes.

  • William Brangham:

    And they held sway today.

    Justice Ginsburg wrote the dissent. And I take it she took a somewhat position of reading it from the bench. What was going on there?

  • Marcia Coyle:

    She did.

    When a justice feels particularly strongly about a dissent in an opinion, that justice will — has the opportunity to read a summary from it from the bench of that dissent, just as the justice who has the majority opinion can read a summary of his or her majority opinion.

    Justice Ginsburg, it was clear from the arguments in this case earlier in the term, felt very strongly. And during her summary of it from the bench today, she called these arbitration agreements arm-twisted, take-it-or-leave-it agreements that hearken back to a very early era.

    They used to use the term yellow dog contracts that employers would use to prevent employees from joining unions or prohibit them from joining unions. And she felt that the court, over the years, has taken the scope of the Federal Arbitration Act away from what Congress intended, that it was originally enacted to encourage arbitration between merchants.

    But now, as we just — as I just said, it's been extended to consumer agreements and now workplace agreements also. So she read the text of those two laws that were at issue and the history, very differently, from Justice Gorsuch.

    Justice Gorsuch looked at the labor law and said there was nothing in it about arbitration, and if Congress meant the labor law to supplant the arbitration law, the Congress has to make that — its intent manifestly clear, and didn't do that. She felt the two laws could exist together, but she felt that the class action and collective action bans in the law were really unlawful labor practices.

  • William Brangham:

    Marcia Coyle, as always, thank you so much.

  • Marcia Coyle:

    My pleasure.

Listen to this Segment

The Latest