Neil Gorsuch’s first major opinion is a decision allowing bosses to steal wages from their workers

Ian Millhiser

Ian Millhiser Senior Constitutional Policy Analyst, Think Progress

The Supreme Court held on Monday that employers can force their employees to sign away many of their rights to sue their employers. As a practical matter, Monday’s decision in Epic Systems v. Lewis will enable employers to engage in small-scale wage theft with impunity, so long as they spread the impact of this theft among many employees.

Neil Gorsuch, who occupies the seat that Senate Republicans held open for a year until Donald Trump could fill it, wrote the Court’s 5-4 decision. The Court split along party lines.

Epic Systems involves three consolidated cases, each involving employment contracts cutting off employees’ rights to sue their employer in a court of law. In at least one of these cases, the employees were required to sign away these rights as a condition of starting their job. In another, existing workers were told to sign away their rights if they wanted to keep working.

Each contract contained two provisions, a “forced arbitration” provision, which requires legal disputes between the employer and the employee to be resolved by a private arbitrator and not by a real court; and a provision prohibiting employees from bringing class actions against the employer.

Writing with his trademarked smugness, Gorsuch presents Epic Systems as a simple application of a legal text. “The parties before us contracted for arbitration,” he writes. “They proceeded to specify the rules that would govern their arbitrations, indicating their intention to use individualized rather than class or collective action procedures. And this much the Arbitration Act seems to protect pretty absolutely.”

It’s the sort of statement someone might write if they’d never read the Federal Arbitration Act — the law at the heart of this case — and had only read the Supreme Court’s decisions expanding that act’s scope.

Broadly speaking, the Federal Arbitration Act requires courts to honor arbitration agreements, and to ignore legal doctrines that disfavor arbitration as a method of resolving disputes. Yet the Act also exempts “workers engaged in foreign or interstate commerce.”

Nevertheless, in a 5-4 decision in Circuit City v. Adams, the Supreme Court held that the Act applies to most workers engaged in foreign or interstate commerce. If Gorsuch were concerned with the text of the Arbitration Act, he might have called for additional briefing on whether Circuit City should be overruled. Instead, he compounded the Court’s error in Circuit City — all while insisting that an anti-worker outcome is required by the law’s text.

Similarly, the Federal Arbitration Act says nothing about class actions. And it certainly does not contain any language suggesting that courts must give the same special treatment to contracts banning class actions that it gives to contracts mandating arbitration.

Nevertheless, in its 2011 decision in AT&T Mobility v. Concepcion, the Supreme Court held that the Federal Arbitration Act has penumbras, formed by emanations from its guarantees that give it life and substance, and that these penumbras prevent states from banning no class action clauses in arbitration agreements.

Permitting someone to bring a class action before an arbitrator, Justice Antonin Scalia wrote for the Court in Concepcion, would “sacrific[e] the principal advantage of arbitration—its informality—and mak[e] the process slower, more costly, and more likely to generate procedural morass than final judgment.” That was a policy judgment on Scalia’s party. It wasn’t a decision rooted in the text of the Arbitration Act.

Epic Systems effectively combines the holding of Circuit City with that in Concepcion — holding that forced arbitration agreements with class action bans may be used to restrict workers’ rights. It does so, moreover, despite the fact that a provision of the National Labor Relations Act provides that “employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

Class actions are a form of concerted activity for mutual aid or protection. In the typical class action, a group of individuals with a common claim against the same defendant join together in a single lawsuit. This enables them to resolve their case efficiently through one round of litigation rather than dozens or hundreds. It also enables plaintiffs with very small claims to obtain competent legal counsel willing to take on their case.

Consider a hypothetical ThinkProgress presented shortly before the Court heard the Epic Systems case:

If an employer cheats one employee out of $300,000 worth of wages, for example, that employee is likely to be able to find a lawyer who will take his case on a contingency basis — meaning that the lawyer gets a percentage of what the employee collects from the employer if they win. If the same employer cheats 10,000 employees out of $30 each, however, no lawyer is going to represent any one of these workers on a contingency basis. Plus, few employees are likely to bother with a $30 suit. It’s too much hassle, and too expensive to hire a lawyer who won’t work on contingency. The solution to this problem is a class action suit, which allows the 10,000 employees to join together in a single case litigated by a single legal team.

Epic Systems means that employers who cheat a single employee out of a great deal of money will probably be held accountable for their actions — though it is worth noting that arbitrators are more likely to favor employers than courts of law, and that they typically award less money to employees when those employees do prevail. The biggest losers under Epic Systems, however, will be the victims of widespread, but small-scale, wage theft.

The lesson for employers, in other words, is to go ahead and cheat your workers. Just make sure you spread the theft widely among as many employees as possible, and that you don’t take too much from any one person.

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Reposted from Think Progress

Ian Millhiser is a Senior Constitutional Policy Analyst at the Center for American Progress Action Fund and the Editor of ThinkProgress Justice. He received a B.A. in Philosophy from Kenyon College and a J.D., magna cum laude, from Duke University. Ian clerked for Judge Eric L. Clay of the United States Court of Appeals for the Sixth Circuit, and has worked as an attorney with the National Senior Citizens Law Center’s Federal Rights Project, as Assistant Director for Communications with the American Constitution Society, and as a Teach For America teacher in the Mississippi Delta. His writings have appeared in a diversity of legal and mainstream publications, including the New York Times, The Los Angeles Times, U.S. News and World Report, Slate, the Guardian, the American Prospect, the Yale Law and Policy Review and the Duke Law Journal; and he has been a guest on CNN, MSNBC, Al Jazeera English, Fox News and many radio shows.

Posted In: Allied Approaches

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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