This past May, in a 5-4 decision, the U.S. Supreme Court ruled that employees must comply with arbitration clauses in their employment contracts. Those clauses require plaintiffs to resolve legal disputes with their employers through arbitration instead of joining other employees in class action lawsuits.
In doing so, the court rejected the employees’ argument seeking to overcome their employers’ arbitration clauses. The employees had unsuccessfully urged the court to rule that the arbitration clauses were precluded by federal labor laws.
What Could This Case Mean For The Future?
Emboldened by the court’s decision, will employers seek to further limit employees’ rights? At the very least, you can expect many more employers to force workers to accept arbitration clauses as conditions of employment.
The increase in arbitration clauses can be expected to create serious obstacles for employees seeking to fight back against any number of illegal employer actions. Arbitration clauses force each employee to act alone against an employer rather than seeking strength in numbers with other similarly positioned employees.
Few employees have the financial resources to fight back and protect their rights against an employer in arbitration. A class action lawsuit allows similarly situated employees to pool financial resources to take on deep-pocketed employers. In arbitration, the expenses incurred by an employee often far exceed the compensation being sought related to an employer’s wrongdoing.
Employer-side advocates will glibly claim that no business wants to protect a manager or co-worker who creates a hostile environment. Therefore, employees need not worry about their rights being limited. What employer advocates omit, however, is that the purpose of the arbitration clause has nothing to do with the business removing a dangerous employee; it has to do with the business protecting its own interests, such as its bottom line and its reputation where long-standing (and approved) business practices may be involved.
What Can Employees Do?
As employees throughout Los Angeles and New York and across the country continue to suffer due to illegal employment practices, they now face the additional obstacle of a U.S. Supreme Court ruling that stacks the deck in employers’ favor when an arbitration clause is included in the employment agreement as a condition of employment.
Employees in these situations are left with few options. One daunting option includes petitioning Congress for a new law addressing the issue. Congressional action, however, does not seem imminent.
For that reason, employees should seek guidance from an experienced employment rights attorney who understands how these arbitration clauses work. Further, an attorney who understands how to challenge existing law successfully can provide the insight that employees need to understand any innovative options for protecting their rights in the future.