Few cases this term have been as closely watched, or are as far reaching, as the Epic Systems v. Lewis case. The 5 to 4 decision handed down by the Court in the wage theft case held that arbitration agreements in employment contracts that ban collective action are enforceable.
For the estimated 25 million U.S. workers currently subject to these types of employment agreements, this decision is bad news. As some Court watchers are reporting, this opens up the potential for employers to go Lex Luther on their employees and steal just a little bit from each one in amounts so small, they don't even notice (or can't financially justify taking legal action).
What Just Happened?
As Justice Gorsuch's opinion clearly explains, the majority on the Court believes that the Federal Arbitration Act and the National Labor Relations Act can coexist without rendering the arbitration agreements in question invalid. He explained the basis for the decision in the opening paragraph: "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 further explains that while NLRA provides workers with the right to collective bargaining, "it says nothing about how judges and arbitrators must try legal disputes that leave the workplace and enter the courtroom or arbitral forum."
The majority opinion puts the onus on Congress, explaining that lawmakers recently repealed a federal agency's policy to ban arbitration, and never intended for the NLRA to trump the FAA. Gorsuch repeatedly explained that the Court's duty is to see the two statutes as working "in harmony," and that the majority's opinion does just that.
Dissent Begs Congressional Action
The dissent, issued by Justice Ginsburg, with Justices Kagan, Sotomayor and Breyer concurring, asserts early on that: "Congressional correction of the Court's elevation of the FAA over workers' rights to act in concert is urgently in order." The dissent explains that the Court has actually dealt a significant blow to employees across the country, and gone against the overwhelming weight of past precedents.
Justice Ginsburg blasted the majority opinion for ignoring eight decades of jurisprudence that would support the employees' argument that the FAA cannot be used as a sword for employers to fight off collective actions.
For the latest Supreme Court news, subscribe to FindLaw's SCOTUS Newsletter.
Related Resources:
- United States Supreme Court Cases (FindLaw's Cases & Codes)
- Lawyer Can't Concede Guilt When Client Claims Innocence (FindLaw's U.S. Supreme Court Blog)
- California Federal Court Shackling Appeal Ruled Moot (FindLaw's U.S. Supreme Court Blog)
