Supreme Court Takes Shot at Employee Class Action Lawsuits

In a 5-4 decision, the U.S. Supreme Court made it significantly harder for workers to join together to stand up against their employer.employment lawyers The highest court in the land determined it is permissible for employers to include language in hiring contracts banning employees from joining class-action lawsuits, according to an ABC News report. This disheartening revelation flies in the face of the 1935 National Labor Relations Act, which was drafted to protect employees’ rights to organize and take collective action to fight for their own interests.

The supporting justices seemed to favor instead the Federal Arbitration Act of 1925, which validates arbitration clauses, making it legal for employers to bind an employee’s right to sue their employer as a term of employment. This forces employees who have signed an arbitration agreement to address their grievances without filing a lawsuit. Instead, they would have to handle disputes individually through a third party arbitrator, often hired by the company whose actions are in question.At its core, there is nothing wrong with arbitration. It is an excellent way for two parties of equal power to settle a small dispute or a contract infringement issue. Note, however, the use of the word “equal.” The intent of arbitration is to quickly settle disputes without expensive, drawn-out courtroom proceedings. This would be mutually beneficial to, say, two companies stuck in an argument over contract language who need a quick neutral third party to make an interpretation so they can quickly get back to business. However, it has now become commonplace for businesses to use arbitration clauses to ensure employees are limited in actions they can take. These are not two equal parties who will both benefit from such an agreement. Class action lawsuits are the equalizer, allowing a group of people to pool together to stand up to a much larger entity. With arbitration clauses, though, one party is very powerful, holds all the cards, and is dangling the prospect of employment and financial security over a much weaker party. All employees have to do in order to earn a living is sign a contract promising to give up their right to sue should people at the company do anything to hurt them. Most people do not have the luxury to pass up a job because of an arbitration clause, or they do not understand what it means, and they sign, simply hoping for the best.

There is still some hope for the future. Congress could put in place a new law that would put the power back in the hands of employees. That, however, seems unlikely with the current political climate.

It’s important for employees to have someone fighting on their side, especially when it feels like everyone is turning their backs on them. That’s why our team of trusted Orange County employment lawyers have dedicated ourselves to protecting employee rights. The latest Supreme Court ruling can make it feel like even the law isn’t on your side. We know, though, that you have more protections than you might realize. We are here to make sure you know your rights and hold employers accountable for misdeeds and illegal activity.

Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 949.375.4734.

Additional Resources:

Justice For Sale: How Corporations Use Forced Arbitration to Exploit Working Families, May 2017, The Center for Popular Democracy

More Blog Entries:

Ex-Uber Employee Seeks to Open Closed Doors of Forced Arbitration, April 21, 2018, Orange County Employment Lawyers Blog

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