US class action lawsuits over wage and hour disputes ruled unlawful US class action lawsuits over wage and hour disputes ruled unlawful

US class action lawsuits over wage and hour disputes ruled unlawful
31 May 2018

The US Supreme Court has ruled that employees are to be prohibited from banding together in class action lawsuits over wage and hour disputes.

In a five-four ruling, the judges said arbitration agreements that bar employees from joining together in arbitration or class-action lawsuits to settle employment disputes are enforceable under the Federal Arbitration Act.

Justice Neil Gorsuch wrote in the majority opinion: “The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written.”

According to The Hill, workers’ rights advocates denounced the decision, fearing it would make it harder for employees to sue their employers over lost wages. They also warned that the ruling could lead to more businesses placing 'take it or leave it' clauses in their contracts. This means that people will have to waive their right to join a class-lawsuit before taking a job 

Christine Owens, executive director of the National Employment Law Project (NELP), said few workers could afford to spend thousands of dollars on pursuing an individual case. "Collective and class actions exist for this very reason, so that regular people can pool their claims and get a lawyer to pursue their case," she said.

But lawyers who focus on defending employers argued that arbitration was more affordable for everyone concerned. Andrew Pincus, a partner at the law firm Mayer Brown, said: "I know the other side portrays this as a big change in the law, but all the court did was reaffirm what people thought the law was."

The Economic Policy Institute, a liberal think tank, found in a study last year that 25 million workers are prohibited from joining class-action lawsuits by means of arbitration agreements.

As a result, representative Bobby Scott, the House Education and the Workforce Committee’s ranking member, called for legislation to change the situation.

"Today’s decision will have serious consequences for millions of workers," he said in a statement. "As part of our commitment to giving workers a better deal, Democrats will introduce legislation to correct this injustice and strengthen workers’ rights to collective action.”

But it is considered unlikely that legislation to bar arbitration agreements would go anywhere in a Republican-controlled Congress.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

The US Supreme Court has ruled that employees are to be prohibited from banding together in class action lawsuits over wage and hour disputes.

In a five-four ruling, the judges said arbitration agreements that bar employees from joining together in arbitration or class-action lawsuits to settle employment disputes are enforceable under the Federal Arbitration Act.

Justice Neil Gorsuch wrote in the majority opinion: “The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written.”

According to The Hill, workers’ rights advocates denounced the decision, fearing it would make it harder for employees to sue their employers over lost wages. They also warned that the ruling could lead to more businesses placing 'take it or leave it' clauses in their contracts. This means that people will have to waive their right to join a class-lawsuit before taking a job 

Christine Owens, executive director of the National Employment Law Project (NELP), said few workers could afford to spend thousands of dollars on pursuing an individual case. "Collective and class actions exist for this very reason, so that regular people can pool their claims and get a lawyer to pursue their case," she said.

But lawyers who focus on defending employers argued that arbitration was more affordable for everyone concerned. Andrew Pincus, a partner at the law firm Mayer Brown, said: "I know the other side portrays this as a big change in the law, but all the court did was reaffirm what people thought the law was."

The Economic Policy Institute, a liberal think tank, found in a study last year that 25 million workers are prohibited from joining class-action lawsuits by means of arbitration agreements.

As a result, representative Bobby Scott, the House Education and the Workforce Committee’s ranking member, called for legislation to change the situation.

"Today’s decision will have serious consequences for millions of workers," he said in a statement. "As part of our commitment to giving workers a better deal, Democrats will introduce legislation to correct this injustice and strengthen workers’ rights to collective action.”

But it is considered unlikely that legislation to bar arbitration agreements would go anywhere in a Republican-controlled Congress.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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