Some of the world’s largest and most profitable companies have had to pay millions to workers they exploited. But after today’s Supreme Court ruling, those companies have nothing to fear.
On Monday morning, the U.S. Supreme Court ruled by a slim 5-4 margin to side with corporate interests in the Epic Systems Corp v. Lewis case. The case involved a company that forced its employees to sign a contract forcing workers into one-on-one arbitration sessions to address grievances.
Workers unable to have their grievances satisfied in arbitration decided to file a class-action lawsuit against the company in federal court. The employees’ position was that the National Labor Relations Act allowed them to take judicial action, as the legislation states that any contract not allowing workers to participate in “concerted activities” for “mutual aid and protection” is illegal.
However, the majority opinion, authored by Trump-nominated Justice Neil Gorsuch, ruled that the older Federal Arbitration Act took precedent over the New Deal-era National Labor Relations Act, meaning that companies have the right to force all new employees to sign contracts that prevent workers from banding together to sue their employer in the event of wage disputes or discrimination.
“As a matter of policy these questions are surely debatable. But as a matter of law the answer is clear,” Justice Gorsuch wrote.
The dissenting opinion, authored by Ruth Bader Ginsburg, argued that paltry settlements typically offered in one-on-one arbitration sessions would hardly be worth pursuing, calling the majority’s decision “egregiously wrong.”
“The court today holds enforceable this arm-twisted, take-it-or-leave-it contracts — including the provisions requiring employees to litigate wage and hours claims only one-by-one,” Justice Ginsburg wrote. “Federal labor law does not countenance such isolation of employees.”
Monday’s decision by the nation’s highest court will undoubtedly have far-reaching impacts on workers for some of the biggest companies in the U.S. Retail giant Walmart is currently facing a class-action lawsuit filed on behalf of thousands of female workers who claimed their employer refused to accommodate their requests to be taken off of heavy lifting and tall ladder duties while they were pregnant. A federal judge ruled in March that the lawsuit was allowed to move forward after two attempts by Walmart to have the lawsuit dismissed were rejected.
In 2011, Walmart was forced to pay out $35 million to workers in Washington state who filed a class action lawsuit after they were forced to work off the clock and skip meal and rest breaks. Nevertheless, the company persisted in its exploitation of workers, leading to another class action lawsuit filed by workers in Pennsylvania that eventually led to a $151 million settlement in 2016 — ten years after a verdict was reached in favor of the workers.
Last year, Amazon warehouse workers in California filed a class-action lawsuit against the online retail titan, claiming that they were denied overtime pay and rest breaks mandated by state and federal law. Romeo Palma, the primary plaintiff, and the thousands of other plaintiffs from the Sacramento-area warehouse are demanding Amazon pay them unpaid wages owed, along with restitution, and are also demanding that statutory penalties be levied against the company.
However, after Monday’s Supreme Court decision, cases like these will end up being decided in one-on-one arbitration sessions, likely meaning companies will only have to pay out a fraction to workers on a case-by-case basis, rather than what they would normally pay out in a class-action settlement.
The silver lining of the Epic v. Lewis decision is that workers represented by labor unions will not be affected, giving workers even more incentive to form unions in the future.
Tom Cahill is a contributor for Grit Post who covers political and economic news. He lives in Bend, Oregon. Send him an email at tom DOT v DOT cahill AT gmail DOT com.