U.S. Supreme Court Upholds Employers' Use of Class Action Waivers to Deny Employee Remedies for Employers' Illegal Conduct

Greg Boles
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U.S. Supreme Court Upholds Employers' Use of Class Action Waivers to Deny Employee Remedies for Employers' Illegal Conduct

In a major blow to the rights of employees under the National Labor Relations Act to join forces in "mutual aid and protection," the Supreme Court ruled 5 to 4 that employers could bar employees from participating in class actions against employers and force them to arbitrate disputes.  Class actions, in which groups of similarly aggrieved individuals file suit, are among the only effective ways for employees to obtain redress for grievances against employers who violate minimum wage or overtime pay rights or violate laws against discrimination.  Employers use arbitration agreements that contain class action waivers to force employees to file for arbitration individually.  Frequently the damages recoverable by an employee are insufficient to justify the filing of an individual legal action.  Furthermore, where employees are the victims of discrimination, they are often reluctant to take legal action unless they are part of a group for fear of being ostracized by co-employees.  

Among the cases consolidated in the decision is one in which employees for Murphy Oil sued the company for back pay for "off the clock" work.  The employees had agreed to arbitrate employment claims individually when they accepted the jobs, but the National Labor Relations Board argued that class action waivers interfered with the right of employees to join to enforce their rights.  President Obama's administration filed a brief with the Supreme Court in support of the employees.  President Trump, who won the presidency with the support of working class employees most likely to be hurt by this decision, took the extremely rare step of reversing the position of a previous administration and filed a new brief in support of the employers. Justice Gorsuch, Trump's appointee, wrote the decision for the majority.

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