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Law & the Courts

SCOTUS Hands Win to Employers in Arbitration Case

Supreme Court Justice Neil Gorsuch (Jonathan Ernst/Reuters)

The Supreme Court said Monday that employers can prevent employees from joining together to file class-action lawsuits through arbitration clauses in their contracts, dealing a blow to organized labor and upholding the Trump administration’s position on federal employment law.

Justice Neil Gorsuch wrote the opinion for the 5–4 majority, citing earlier SCOTUS rulings that protected employers’ ability to require that their employees surrender their right to pursue class-action litigation as a condition of their employment.

“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,” Gorsuch wrote. “This court is not free to substitute its preferred economic policies for those chosen by the people’s representatives.”

In a rare show of public displeasure, Justice Ruth Bader Ginsburg read her dissent from the bench, deriding the majority opinion in Epic Systems Corp. v. Lewis as “egregiously wrong.”

“The court today holds enforceable these arm-twisted, take-it-or-leave-it contracts — including the provisions requiring employees to litigate wage and hours claims only one-by-one. Federal labor law does not countenance such isolation of employees,” she said.

Gorsuch dismissed Ginsberg’s assertion that the decision will constrain employees’ collective-bargaining rights.

“Like most apocalyptic warnings, this one proves a false alarm,” he said of her suggestion that the ruling will be used to prevent employees from joining labor unions.

The ruling constitutes an endorsement of the Trump administration’s position that employers are entitled to waive their employees’ right to file class-action lawsuits under the 1925 Federal Arbitration Act (FAA). The Obama administration, as well as the organized-labor movement, had argued that the National Labor Relations Act trumped the FAA and guaranteed employees’ right to collective action.

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