The US Supreme Court ruling on Monday upholding employers’ right to include arbitration agreements and class action waivers in employees’ work contracts is being celebrated by business associations and employer-side attorneys as a major victory, mitigating the risk of expensive litigation over labor disputes that may arise from honest mistakes rather than deliberate malfeasance. Advocates of arbitration say it is faster and cheaper than a courtroom trial and that the confidentiality of arbitration is a benefit to both employees and employers (though critics, of course, disagree on all of these points).
What individual arbitration does not protect organizations from, however, is reputational risk. We’ve seen this in the public blowback against companies whose arbitration policies are interpreted as them trying to hide ongoing discriminatory behavior. Within the past six months, companies like Microsoft, Uber, and Lyft have abandoned forced arbitration of harassment cases to guard against this risk. The public relations downside to handling these matters quietly may be growing to outweigh the upside in terms of cost and legal risk.
In a 5–4 ruling handed down on Monday, the US Supreme Court ruled that organizations can legally require their employees to sign arbitration agreements in their work contracts and waive their right to resolve labor disputes through class-action lawsuits. The court split on ideological lines, with the five conservative justices voting to allow class action wavers and the liberal minority dissenting, the New York Times reported:
Writing for the majority, Justice Neil M. Gorsuch said the court’s conclusion was dictated by a federal law favoring arbitration and the court’s precedents. If workers were allowed to band together to press their claims, he wrote, “the virtues Congress originally saw in arbitration, its speed and simplicity and inexpensiveness, would be shorn away and arbitration would wind up looking like the litigation it was meant to displace.”
Justice Ruth Bader Ginsburg read her dissent from the bench, a sign of profound disagreement. In her written dissent, she called the majority opinion “egregiously wrong.” In her oral statement, she said the upshot of the decision “will be huge under-enforcement of federal and state statutes designed to advance the well being of vulnerable workers.” Justice Ginsburg called on Congress to address the matter.
The ruling, which the Times adds could affect some 25 million employment contracts, comes nearly a year and a half after the high court agreed to hear a group of cases on the legality of arbitration clauses and class action waivers. It was not unexpected, given the court’s conservative majority and the inclinations Gorsuch and his right-leaning colleagues have shown in other labor-related cases.
Business groups and employer-side attorneys cheered the ruling, which they say will free companies from burdensome litigation and allow disputes to be resolved through the cheaper and speedier process of arbitration. Labor rights advocates expressed dismay, however, warning that it would result in a rollback of employees’ fundamental rights and would prove particularly disastrous in discrimination and harassment cases. In a Times op-ed, Terri Gerstein and Sharon Block, of Harvard Law School’s Labor and Worklife Program, criticize the ruling for taking away a key safety net for employees:
In 2016, a US appeals court ruled against the Equal Employment Opportunity Commission in a suit the agency had brought on behalf of Chastity Jones, a black woman who had been denied employment at the Mobile, Alabama insurance claims processing company Catastrophe Management Solutions after she refused to cut her dreadlocks in compliance with the company’s grooming policy. Absent an explicit racial dimension to the policy, the court ruled, CMS was within its rights to ban dreadlocks in general as part of its dress code.
The EEOC chose not to pursue the case further, but the NAACP Legal Defense and Educational Fund sought to appeal the ruling in the Supreme Court. Last week, however, the high court said it would not take the case. The court’s refusal to hear this case is a blow to advocates who see workplace hairstyle policies like these as discriminatory in effect if not intent, as they place greater constraints on the choices black people, and particularly black women, than other employees and often penalize black employees for wearing natural hairstyles. Implicit bias against black women’s naturally textured hair is a well-documented phenomenon in American society, which causes many black women to experience pressure to artificially straighten their hair or wear hairpieces.
CMS’s dress code did not explicitly mention dreadlocks, but rather mandated grooming that reflected a “professional image” and barred “excessive hairstyles.” This suggests to Rewire’s senior legal analyst Imani Gandy that such policies as applied are not as race-neutral as they appear on paper:
First, CMS’s purported race-neutral grooming policy is anything but—since it excludes Black women’s natural hairstyles based on stereotypes that natural hairstyles are unprofessional, messy, not neat, political, radical, too eye-catching, or excessive.
The US Supreme Court heard arguments on Monday in the case of Janus v. American Federation of State, County and Municipal Employees, in which the court appears poised to strike a blow to organized labor by cutting off a major source of revenue for unions representing public sector employees. The plaintiff, Illinois state employee Mark Janus, is not an AFSCME member but pays “agency fees” to the union in return for benefiting from its collective bargaining activities—a practice allowed by the court in the 1977 case Abood v. Detroit Board of Education. Janus, represented by the anti-union National Right to Work Committee, contends that these fees violate his First Amendment rights by forcing him to fund an organization that engages in political activities with which he may disagree.
The Supreme Court came close to striking down Abood in a separate case in 2016, but deadlocked 4–4 after the untimely death of Justice Antonin Scalia that February left its conservative wing without a fifth vote. Now, with the conservative Justice Neil Gorsuch filling its ninth seat, the court is widely expected to rule in Janus’s favor, NPR’s Nina Totenberg explains:
To get a feel for the court’s thinking, take a glance back to the argument in 2016. The teachers union, joined by the state of California, contended that fair-share arrangements prevent strikes and internal strife by providing a single elected union for the state, acting as employer, to deal with, as opposed to competing unions and groups of employees.
In many close controversies, Justice Kennedy is the justice most likely to be open to persuasion, but he is something of a purist on First Amendment free speech questions. Two years ago, he disputed the characterization of those who didn’t want to pay partial union fees as “free riders.” Rather, he said, the union was making them into “compelled riders.”
The US Supreme Court denied an appeal in a case concerning whether discriminating against LGBT employees on the basis of their sexuality violates Title VII of the Civil Rights Act, which prohibits sex discrimination, the Hill reported on Monday. Giving no explanation for its decision, the court refused to hear the case of Jameka Evans, a former security guard at Georgia Regional Hospital, who claims she was harassed and forced out of her job because of her sexual orientation and gender-nonconforming appearance.
Evans, represented by attorneys from the LGBT legal advocacy organization Lambda Legal, had taken her case to the 11th Circuit Court of Appeals, but a panel of judges in that court ruled against her in March on the basis of a precedent from 1979. The 11th circuit declined to rehear the case en banc (by the full court), so Lambda Legal petitioned the Supreme Court to resolve it instead. According to the Hill, the organization expressed disappointment in the court’s decision, noting that it leaves unresolved a split decisions among different circuit courts regarding the rights of LGBT Americans in the workplace:
“But this was not a ‘no’ but a ‘not yet,’ and rest assured that Lambda Legal will continue the fight, circuit by circuit as necessary, to establish that the Civil Rights Act prohibits sexual orientation discrimination,” Greg Nevins, the group’s employment fairness project director, said in a statement.
The Trump administration’s controversial travel ban, which indefinitely bars most travelers and immigrants from Chad, Iran, Libya, North Korea, Somalia, Syria, and Yemen from entering the United States, can be implemented in its current form while pending legal challenges to it are resolved, the Supreme Court ruled on Monday. According to the Washington Post, “in an unsigned opinion Monday that did not disclose the court’s reasoning, the justices lifted the injunctions” against the ban put in place by two federal judges in Hawaii and Maryland:
The justices said they expected the federal judges reviewing challenges to the order — based on what challengers say are Trump’s animus toward Muslims and lack of authority under immigration laws — to handle the cases with “appropriate dispatch.”’ … The orders from the two district judges will be reviewed this week. A panel of the U.S. Court of Appeals for the 9th Circuit is set to consider the Hawaii case Wednesday, and the entire U.S. Court of Appeals for the 4th Circuit in Richmond will consider the Maryland judge’s decision Friday.
Monday’s ruling does not mean the ban will survive its ongoing court battles, but it does suggest that if the federal judges do attempt to knock it down, the administration will petition the Supreme Court for a reversal of their rulings and may win that case.
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A group of 76 US companies, including major tech players like Apple, Google, Microsoft, and Viacom, submitted a brief to the Supreme Court asking it to weigh in on whether Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination on the basis of sex, also protects LGBT employees, Reuters reports:
The companies asked the Supreme Court to take up the case of Jameka Evans, a former security guard at a Georgia hospital who says she was harassed and forced to quit her job because she is gay. The companies said the lack of a federal law clearly prohibiting discrimination on the basis of sexual orientation has hindered recruitment in the 27 states that have not adopted their own such laws.
And “the uncertainty and vulnerability LGBT workers face results in diminished employee health, productivity, job engagement, and satisfaction,” wrote the companies’ lawyers at Quinn Emanuel Urquhart & Sullivan.
In March, a three-judge panel from the 11th Circuit Court of Appeals in Atlanta ruled against Evans in an appeal filed on her behalf by the LGBT legal advocacy organization Lambda Legal, dismissing her claim on the basis of a circuit court precedent from 1979. Lambda petitioned the full court to rehear Evans’ case, but it declined to do so in July, so the group took the case to the Supreme Court last month.
Different circuit courts have handed down contradictory opinions on this issue, so the high court is likely to take it up at some point in the near future, as it often does when federal judges split on a question of federal law.