WASHINGTON, D.C. — It’s employees vs. employers in the first case of what legal experts are calling a “blockbuster” term for the U.S. Supreme Court.
The high court kicked off its 2017 term Monday with a case that’s actually three consolidated cases, in which several groups of employees who signed arbitration agreements sued their employers alleging the companies haven’t paid them the overtime wages they were owed.
The National Labor Relations Act has guaranteed the right to file class action lawsuits, but the employees’ arbitrations agreement prohibited that, which the plaintiffs argue violates the law. The lower courts have been split about whether to allow the cases to move forward or dismiss them because of the arbitration agreements.
And the DOJ is supporting the employers.
More than half of nonunion private-sector employers — about 60 million people — have mandatory arbitration agreements with their employers, a new study by Cornell University professor Alexander J.S. Colvin found, meaning if they feel their rights have been violated they must resolve the dispute outside of a court. Around 25 million of those people are bound to individual arbitration, meaning they can’t organize their efforts with colleagues. Arbitration on this scale is a relatively new concept; only 2 percent of workers were subject to these agreements in just 25 years, according to the study.
The court’s liberal bloc, most vocally Justice Stephen Breyer, expressed serious concerns about what what a vote for the companies would mean for the future of labor rights.
“I’m worried that what you’re saying is overturning labor law that goes back…to FDR at least,” Justice Breyer said regarding comments by the company attorney, Paul Clement. “I haven’t seen a way that you can win…without undermining and changing radically what has gone back to the New Deal.”
“There is nothing sinister about leaving it to bilateral arbitration,” Clement said.
For the first time in at least a quarter-century, this case pits one federal government agency, the National Labor Relations Board, siding with the employees, against another, the Department of Justice, siding with the employer. The Department of Justice filed an amicus brief in June supporting the companies, and sent the deputy Solicitor General, Jeffrey Wall, to argue the case Monday. (Before arguments began, the recently confirmed Solicitor General Noel Francisco briefly greeted the court.)
The conservative bloc — Justices Clarence Thomas, Neil Gorsuch, Samuel Alito, and Chief Justice John Roberts — may favor the employers and the DOJ, as arbitration agreements are seen as a way to cut costs and streamline disputes. If Justice Anthony Kennedy, traditionally the swing vote, sides with them, more U.S. employers may start to require their employees to sign arbitration agreements as they will be even more binding.
“I think it’s a case that has very broad ramifications in the real world, because if these agreements get upheld, every employer is going to have one of these agreements,” said Irving Gornstein, executive director of the Supreme Court Institute at Georgetown University Law Center. “The only resort people will have is arbitration, that will effectively reduce the number of wage and hour claims that are going to be brought. That’s the real-world impact.”
Twenty-eight friend of the court (aka amicus) briefs were filed in the case by interested parties, including the National Association of Manufacturers, supporting the companies, and the New York Taxi Workers Alliance, supporting the employees.
Along with one other labor rights case — whether workers opposed to union representation can be required to pay dues — the court will be deciding cases about gay rights, immigration, partisan gerrymandering, cell phone data privacy, and voter purging this term.