In what will likely be remembered as an epic decision to America’s unions, the Supreme Court ruled 5-4 on Monday – in a decision split along ideological lines – that businesses can force employees into individual arbitration to resolve disputes, virtually eliminating the threat of a class-action lawsuit.
The Washington Post described the ruling as “an important outcome for business interests.” The decision could make life much harder for unions fighting for better conditions and wages.
Justice Ruth Bader Ginsburg called the decision “egregiously wrong”. She argued that individual complaints can be very small in dollar terms, or “scarcely of a size warranting the expense of seeking redress alone.” The justice read a summary of her dissent aloud in the court.
In a comment that broke with the administration’s official view, the National Labor Relations Board argued that requiring employees to waive their right to collective action conflicted with national labor laws. Bodies representing business were united in support of the ruling.
Meanwhile, lower courts had been split over the issue. Two rulings had been issued – two in which appeals courts ruled that such agreements can’t be enforced and a third in which the appeals court said they are valid.
According to the New York Times, the Court had ruled back in 2011 during the AT&T Mobility V. Concepcion case that companies could forbid class actions in contracts with consumers. These contracts typically require two things: That disputes be resolved and claims brought through arbitration.
The justices were asked to determine whether these same conditions apply to employees.