The U.S. Supreme Court opens its new term Monday with areinforced conservative wing and a case that could give employers apowerful new tool to prevent their workers from filing class-actionlawsuits.

|

At issue is whetheremployers can enforce promises they extract from workers to pursuegrievances as individual arbitration cases, rather than asgroup lawsuits in court. The justices will hear arguments in threedisputes involving wage-and-hour claims, and the ruling probablywill apply to discrimination cases as well.

|

Related: Gig economy workers are financiallyvulnerable

|

Over the past decade the Supreme Court has backed arbitrationagreements between companies and consumers or other businesses. Butemployee advocates say workplaces are different because of afederal labor law that gives employees the right to engage in"concerted activities" -- a guarantee some judges have saidincludes class actions.

|

Past cases suggest thelatest fight will divide the court along ideological lines. Thatmeans the newest justice, Donald Trump appointee Neil Gorsuch,could cast the pivotal vote in favor of arbitration.

|

"Arbitration has really been one of the fault lines on the courtideologically," said Greg Garre, a Washington appellate lawyer whoserved as President George W. Bush’s top Supreme Court lawyer.

|

Companies say arbitration is more efficient and less expensivethan traditional litigation, reducing the pressure to settlemeritless cases. Critics say arbitration -- particularly when itincludes a ban on class actions -- can strip litigants of importantrights and make small claims all but impossible to press.

|

Feds vs. Feds

The Trump administration is backing the employers. But in anunusual twist, the National Labor Relations Board is set to argueon the side of the workers, defending its longstanding positionthat arbitration agreements can’t prohibit group claims. AlthoughNLRB now has a Republican majority, its general counsel, RichardGriffin, is a Democratic appointee and is scheduled to argue thecase.

|

With Deputy Solicitor General Jeffrey Wall on the other side, itwill be the first time in at least 25 years that two federalgovernment lawyers have squared off against each other in a SupremeCourt argument, Justice Ruth Bader Ginsburg said recently.

|

The case turns on the intersection of two longstanding federalstatutes: the 1935 National Labor Relations Act, which contains theprovision protecting "concerted activities," and the 1925 FederalArbitration Act, which says judges must enforce arbitration accordslike any other contract.

|

The court will use three cases to decide the issue. One is anappeal by the NLRB in a fight over alleged underpayments to fourworkers at an Alabama gas station run by a Murphy USA Inc. unit.The NLRB concluded the company engaged in an unfair labor practiceby refusing to let the workers pursue their claims together. Afederal appeals court threw out the board’s finding.

|

The court will also consider an appeal from Epic Systems Corp.,a health-care software company being sued by Jacob Lewis, anemployee who says the company misclassified him and other technicalwriters so that they wouldn’t be eligible for overtime.

|

The third appeal was filed by the accounting firm Ernst &Young LLP, which is fighting allegations that it also misclassifiedthousands of employees to make them ineligible for overtimepay.

|

The cases are Epic Systems v. Lewis, 16-285; Ernst & Youngv. Morris, 16-300; and NLRB v. Murphy Oil, 16-307. The court willdecide all three by June.

|

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.