Supreme Court Rules In Favor Of Employers
In a recent Supreme Court ruling of 5-4, it has been decided that employers can bar employees from participating in class-action lawsuits as a condition of employment. This means that the employer can require employees to participate in individual arbitration.
Writing for the court, Justice Neil Gorsuch said, “The respective merits of class actions and private arbitration as means of enforcing the law are questions constitutionally entrusted not to the courts to decide but to the policymakers in the political branches where those questions remain hotly contested…This court is not free to substitute its preferred economic policies for those chosen by the people’s representatives.”
What does all this mean? To answer this question, we need to take a closer look at what arbitration is and what this can potentially mean for employees.
What is Arbitration?
Arbitration is one method that is used to reach a dispute resolution. It is meant to provide an alternative to filing a lawsuit and then having to go to court. This method was meant to be a more cost-effective and time-saving way to resolve a legal issue.
What Are Class Action Lawsuits?
In a class action lawsuit, a group of individuals with the same or similar injuries caused by the same product or action can sue the defendant as a group. In this case, we are talking about a group of employees in a company finding themselves with similar injuries sustained while on the job and then coming together as a group to sue the employer.
A class action lawsuit can typically take one to three years to resolve, however, the length of time could be greater depending on the circumstances of the lawsuit. Many stages must be gone through once the original complaint has been filed.
What Does this Ruling Mean for Employees?
The Supreme Court ruling means that the employer is now able to prohibit their employees from coming together to take legal action. This means that they can no longer participate in a class action lawsuit, even if they have been injured due to a workplace injury.
The decision can ultimately affect more than 25 million employment contracts across the United States. In response to their ruling, they stated, “the virtues Congress originally saw in arbitration, its speed and simplicity and inexpensiveness, would be shorn away and arbitration would wind up looking like the litigation it was meant to displace.”
Employees up until this point preferred to tackle a lawsuit as a group to help spread the costs associated with the lawsuit and also minimize any employer retaliation that may take place due to the lawsuit. Having to approach a small claim on a more individual basis may end up being a more dangerous act for the employee and will cost much more.
What Does this Ruling Mean for Employers?
Many feel that the ruling will be met with minimal impact, while others find it to be wrong concerning vulnerable employees. The ruling is in place more as a protection for employers, so there is a more limited threat of any further time and money consuming litigation.
Employers may also find an additional cost benefit to this new Supreme Court Ruling. However, individual arbitration cases may increase and cost more time than initially anticipated. The new ruling may also give way to employee misconduct in some cases.
The Civil Rights Act
Some are seeking to limit the new ruling because they feel that it should not bar employees from seeking a lawsuit for discrimination due to the provisions of the 1964 Civil Rights Act. The National Labor Relations Board had taken the side of the employees in these arguments.
Overall, the Supreme Court ruling can affect the rights of approximately tens of millions of workers while giving the ideological lines back to the employers.