Want to sue your employer? You may have to do it alone.
The Supreme Court ruled on Monday that employers can block “collective claims” from workers who file their complaints together. Justice Neil Gorsuch cast the deciding vote. Employers can now enforce “arbitration clauses,” meaning they can require employees to resolve disputes individually, or out of court through a third-party “arbiter.”
An estimated 25 million employees currently have contracts that prohibit them from filing collective action suits if they want to raise a complaint about their jobs, according to the Associated Press.
The decision was “a major loss for American workers,” said David Madland, a senior fellow at the Center for American Progress, a left-leaning research and advocacy organization based in Washington, D.C.
“It lets powerful corporations deprive workers of their legal right to band together to challenge illegal policies that result in unsafe working conditions, sexual harassment and other forms of discrimination, or from seeking unpaid wages,” he said.
In a 5 to 4 decision, the Supreme Court ultimately disagreed. “As a matter of policy these questions are surely debatable. But as a matter of law the answer is clear,” Gorsuch wrote. The Federal Arbitration Law allows those employer contracts to be valid, he said.
Businesses often find arbitration clauses beneficial, because they allow them to settle disputes outside of court, where documents can become publicly available.
The issue of mandatory arbitration was also debated in November 2017. Financial companies, including banks, often put “mandatory arbitration clauses” in their contracts for consumers, requiring them to settle complaints with the institutions out of court, through arbiters.
The Consumer Financial Protection Bureau had been developing a proposed law that would give consumers the right to come together to file class-action suits against those companies instead. But President Donald Trump in November signed a resolution that killed the proposal.
Consumer advocates had said mandatory arbitration clauses hurt consumers because without the ability to sue in class-action suits, it can be difficult for individual consumers to resolve complaints with companies, who have more money and better legal representation at their disposal.