Employment Law Update: Supreme Court Decision on Workers’ Rights

Supreme CourtThe Supreme Court issued a decision today regarding workers’ rights to collectively sue their employers for violations of federal labor and employment laws. We will have more to say in the coming weeks about how this decision will change the landscape of employment law.  For right now, here is what you should know:

 

1)         The Court was split 5-4, with the more conservative members in the majority. The newest member to the Court, Justice Neil Gorsuch, wrote the majority decision. Justice Ruth Bader Ginsburg wrote the dissent on behalf of the more liberal-leaning justices.

2)         In her dissent, Justice Ginsburg called the decision “egregiously wrong” and opined that this decision will negatively affect low-wage workers.

3)         The majority opinion ruled that the 1925 Federal Arbitration Act should overrule the National Labor Relations Act (NLRA). That is to say, when an employee signs an employment agreement in which he agrees to arbitrate any claim for violation of local, state, or federal labor and employment laws, he may be required to bring all such claims as an individual, thereby waiving collective rights which are protected by the NLRA. It is estimated  that this ruling will affect roughly 25 million non-unionized workers in the U.S.

4)         This decision will be beneficial to employers. It restricts class action cases that would be filed regarding wages, overtime, and anti-discrimination issues, among others.  Moreover, the New York Times  reported that the attorneys representing employers “said the decision protects businesses from endless, costly litigation.”

5)         If you attended our April 12 Employment Law Seminar, then you know that we have well-developed opinions on the pros and cons of mandatory arbitration over litigation. If you have any questions for how this new decision affects your business, please feel free to call or email us.