Justices rule for worker arbitration over class-action suits

WASHINGTON — The Supreme Court ruled 5 to 4 Monday that companies may require workers to accept individual arbitration for wage and other workplace disputes rather than banding together in collective actions.

The case was considered the most-important business case of the term and could affect 25 million contracts.

The ruling extends the Supreme Court’s decisions for corporations to require that wage disputes, and probably other actions like job-discrimination claims, be handled through arbitration, rather than litigation.

Justice Neil Gorsuch, writing for the majority, posed the question presented by the case: Should employers be allowed to insist disputes be handled in one-onone arbitration, or should employees always be permitted to bring their claims in class or collective actions?

“As a matter of policy these questions are surely debatable,” Gorsuch wrote. “But as a matter of law the answer is clear. In the Federal Arbitration Act, Congress has instructed federal courts to enforce arbitration agreements according to their terms — including terms providing for individualized proceedings.”

Gorsuch was joined by Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas and Samuel Alito.

Workers contended the National Labor Relations Act makes illegal any contract denying employees the right to engage in “concerted activities” for the purpose of “mutual aid and protection.” They said that means collective action cannot be prohibited.

“The court today holds enforceable this armtwisted, take-it-or-leave-it contracts — including the provisions requiring employees to litigate wage and hours claims only oneby-one,” dissenting Justice Ruth Bader Ginsburg said. “Federal labor law does not countenance such isolation of employees.”

Trying to arbitrate such claims individually would be too expensive, she wrote, and “the risks of employer retaliation would likely dissuade most workers from seeking redress alone.”

She was joined in her dissent by Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan.