08 Jun Implications of Workers’ Rights in Light of Epic Systems v. Lewis
Many people have been asking me what are the implications of workers’ rights in light of Epic Systems v. Lewis. The Supreme Court ruled in favor of upholding arbitration clauses in employment agreements. Therefore, an employer is permitted to have a clause as a condition of employment forcing an employee to take all employment related disputes to arbitration and waive the right to participate in class actions. The case was originally filed because the employee alleged the employer violated federal minimum wage laws and wanted to band together as a class in order to bring the case. The employer wanted to uphold the employment agreement which required the dispute to go to arbitration and waive the class action. The employer in this case relied on the Federal Arbitration Act from 1925 which stated that arbitration clauses in contracts shall be enforced. The employee in this case relied on the 1935 National Labor Relations Act which protects an employee’s right to engage in “concerted activities for the purpose of … mutual aid or protection.”
Implications of Workers’ Rights in Light Epic Systems v. Lewis:
Practically speaking, this harms employees and benefits employers. The argument made in favor of arbitration is that it is less expensive and protects employers against “runaway juries” who may offer a large verdict. Another argument made against class actions in favor of arbitration is that the attorneys for the class, not the individuals who are injured, are the ones who make all the money. From a practical standpoint, however, the individual claim of an employee or individual consumer is worth far less than the whole. As such, it is unlikely that the employee or consumer will gain enough benefit from litigating this case individually, nor is an attorney as likely to get involved because it will be cost prohibitive for the employee. The dissent in a prior case notes as such:
“What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?” He quoted Judge Richard Posner: “The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30.”
From a practical standpoint, these cases are not going to be filed and the injured party has no recourse that will be exercised. The injuring party gets away with harming an individual and faces no punishment. What incentive does that give to give companies or employers from doing the the right thing when profits are at stake? I argue very little incentive. In fact, without class action as a stick against dishonest behavior, employers are more likely to violate the laws, knowing there is little recourse for the employee.
Politics Should Matter for Employees:
The political affiliations with the current Supreme Court is especially important in these cases, as many of the justices vote on party lines. Conservative judges tend to be more pro-business and therefore inclined to enforce arbitration agreements. In contrast, liberal judges tend to be much more concerned with protecting workers and consumers. Unfortunately, the inability to get a more centrist justice confirmed under Obama’s presidency is going to have lasting implications for workers’ rights for many years to come.
Thank you for reading!
Tarun B. Rana, Esq.
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