Supreme Court splits on workers’ rights case
Liberal justices speak out against individual arbitration agreements
Labor contracts that prevent about 25 million workers from banding together in arbitration disputes against employers came under fire Monday from the Supreme Court’s liberal justices, but they may not have five votes to invalidate them.
In the first case of the court’s potentially blockbuster 2017 term, three conservative justices appeared to be on the side of employers, while two others — including President Trump’s addition to the court, Justice Neil Gorsuch — remained silent.
That could signal a 5-4 decision upholding arbitration agreements signed by workers, often unknowingly, that bar them from having their disputes decided collectively.
Organized labor fears a onetwo punch could be delivered this term by the court’s conservative majority. In a second case, the justices will decide whether public employee unions can continue to collect fees from non-members, and many expect Gorsuch to side with conservatives who previously opposed such fees in a case that was deadlocked last year.
The high court has been deferential in the past to arbitration agreements, favored by many employers as a way to resolve disputes over pay, benefits, discrimination and harassment without going to court. Last year, 54% of companies reported using arbitration clauses in contracts, and one-third of those barred workers from banding together.
The nation’s major business trade groups have lined up in favor of the three employers whose cases were heard together Monday: Epic Systems, a Wisconsin health care software company;
The oral argument offered the Justice Department, representing the federal government, arguing against a federal agency.
Ernst & Young accountants; and Murphy Oil, which operates gas stations in 26 states.
The Federal Arbitration Act of 1925 made arbitration agreements legal. Ten years later, the National Labor Relations Act protected employees’ rights. The question before the court is whether those rights render individual agreements void.
Perhaps sensing that Gorsuch’s presence put them in the minority, the court’s four liberal justices attacked individual arbitration agreements with a vengeance.
Justice Ruth Bader Ginsburg likened them to “yellow dog contracts,” outlawed in 1932, that required workers to promise that they would not join unions. She said they prevent workers from acquiring “strength in numbers” by banding together, often to cov- er costs that exceed any potential individual rewards.
“That was the core idea of the (National Labor Relations Act),” she said. “We have to protect the individual worker from being in a situation where he can’t protect his rights.”
Justice Stephen Breyer said a decision for employers would overturn settled labor law, “undermining and changing radically what has gone back to the New Deal.”
The oral argument offered something unseen at the court for at least a quarter century: the Justice Department, representing the federal government, arguing against a federal agency — in this case, the National Labor Relations Board. That’s because the Trump administration switched sides in the case this year, lining up behind employers; the Obama administration had backed the workers.
Chief Justice John Roberts led the court’s conservatives in questioning the NLRB’s chief counsel, Richard Griffin. But Justice Anthony Kennedy, most often the swing vote on the court, appeared to tip the balance toward employers by noting that even under existing arbitration contracts, workers at least can prepare their case using the same lawyer.