Bridging the Opportunity Divide

On the Docket: Workers’ Rights

March 19, 2017
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On the Docket: Workers’ Rights
In October, the Supreme Court will hear arguments in a large business dispute involving class-action waivers. Photo by Evan Vucci - Pool/Getty Images
Could the addition of Judge Neil Gorsuch to the bench give more power to businesses?

As the Senate begins confirmation hearings for President Trump’s Supreme Court nominee, Judge Neil Gorsuch, the administration’s embattled travel ban is top of mind. Twice, federal judges struck down portions of its latest version. Now, the Justice Department is appealing. Will the fight go all the way to the Supreme Court as the president has vowed? Quite possibly.

Meanwhile, another case that could weaken the rights of American workers has (relatively) quietly made its way onto the Court’s fall docket.

The case, Ernst & Young LLP v. Morris (which is combined with two other cases), questions whether businesses can prohibit their employees from taking collective, legal action over workplace issues, such as unpaid wages and discrimination. A ruling in favor of the defendant, “potentially guts many of the core protections that most workers in this country think they have,” says Paul Schiff Berman, professor of law at George Washington University.

Here’s the situation: Big corporations, as well as startups, have increasingly asked new-hires to sign employment contracts containing waivers that forfeit the employees’ rights to pursue class-action lawsuits against their employers. Instead, individual employees are required to use arbitration to settle disputes.

Class-action lawsuits are typically more costly in terms of legal fees and time, compared to out-of-court settlements, which can be more appealing to both companies and employees.

“If an employer engages in unlawful activity that affects its workforce broadly, those claims are often too small to be brought by one person,” says Anne B. Shaver, an attorney with Lieff Cabraser Heimann and Bernstein, a firm that’s represented workers in landmark class-action lawsuits against numerous top Silicon Valley companies.

During the Obama administration, the National Labor Relations Board consistently ruled that these class-action waivers in employees’ contracts were invalid. But conflicting rulings in three circuit courts have pushed the issue up to the Supreme Court.

To be clear, this lawsuit does not pertain to most members of the ever-growing gig economy. Uber drivers, Airbnb hosts and the like operate as freelancers, not traditional employees.  

How would the Supreme Court rule with Gorsuch on the bench? In the past, it backed arbitration. With a fifth conservative judge whose judicial philosophy is similar to the late Justice Antonin Scalia’s, businesses may prevail again.

Homepage photo by Mark Wilson/Getty Images.

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