On Monday, in an opinion written by Trump appointee Neil Gorsuch, the court ruled 5-4 that it is legal for employers to require workers to sign away their right to file class-action lawsuits against the employer ― and instead be forced to take their disputes to individual arbitration, a private court system in which companies typically have the upper hand.
For many women, the ruling means they will no longer be able to band together to fight systemic sexual discrimination or harassment in court. Women’s rights advocates were quick to decry the decision in Epic Systems Corp. v. Lewis.
“It is a real blow to women in the workplace. We have seen from the Me Too movement the power that comes from women’s voices coming together,” said Emily Martin, a vice president at the National Women’s Law Center. “This decision makes it so much harder for employees to challenge harassment or other forms of discrimination, which means those workplace abuses are more likely to continue.”
Class-action lawsuits have been effective in forcing companies to change policies or practices that reinforce various forms of discrimination, including sex discrimination and gender pay disparities, said Nantiya Ruan, a professor at the University of Denver’s Sturm College of Law.
“An individual cannot change the way a corporation does business,” said Ruan, who is also of counsel at Outten & Golden, a law firm that represents employees in discrimination cases ― including one she is working on now against Goldman Sachs.
Going it alone, the most a woman can generally hope for is a monetary judgment. But banding together, women who file class actions can do far more to ensure that a company stops discriminatory behavior.
In the past, Ruan said, class actions have forced companies to change their ways. She pointed to a case that Home Depot settled in 1997, agreeing not only to pay the women suing the company millions of dollars but also to change its policies.
There’s also a class-action arbitration right now in which hundreds of women who worked at Sterling Jewelers are collectively pursuing the company over sex discrimination and harassment. If those women had been forced to go it alone, as individuals, it’s doubtful whether many of them would have bothered to sue.
“It is a real blow to women in the workplace.”
The Supreme Court ruling comes at a time when women are increasingly speaking up about discrimination and harassment ― and when more companies are being put on notice that such mistreatment will no longer be tolerated. The decision is also a painful reminder that Me Too is facing a major hurdle in the top federal court, thanks in no small part to President Donald Trump.
“The fact that Neil Gorsuch is the author of this opinion and he and the majority are exhibiting an incredible lack of understanding of what’s going on in today’s workplaces ― it brings it back to Trump,” said Catherine Ruckelshaus, general counsel at the National Employment Law Project. “He nominated Gorsuch and brought him in. Trump’s not for the worker and he’s not a women’s rights president.”
Writing for the majority, Gorsuch held that agreements requiring employees to arbitrate must be enforced and that these agreements do not violate federal labor laws that guarantee workers the right to join forces in “mutual aid and protection.”
“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,” Gorsuch wrote.
The Monday ruling, which covered three cases against three different companies, involved situations in which employees were allegedly not paid for work. But the decision has far-reaching consequences for many types of cases, including those raising racial and sexual discrimination and harassment claims.
The decision will disproportionately impact low-income workers, who often lack the financial incentive or wherewithal to file complaints on their own. The costs of going to court, for example, would typically far outstrip the amount of back pay to which a woman experiencing pay discrimination in an hourly job would be entitled.
Even for better-paid women, the expense of filing a case individually is often overwhelming. In a blistering dissent in the Epic Systems ruling, Judge Ruth Bader Ginsburg noted that it would have cost one employee of Ernst & Young $200,000 to recover $1,867.02 in overtime pay. The consulting firm was one of the companies sued.
“The inevitable result of today’s decision will be the underenforcement of federal and state statutes designed to advance the well-being of vulnerable workers.”
“Those most vulnerable to workplace violations are going to be harmed the most,” said Martin.
That point was echoed by Ginsburg, who called the majority’s ruling “egregiously wrong.” The 85-year-old justice, whose dissent was joined by the two other female justices, Elena Kagan and Sonia Sotomayor, and by Stephen Breyer, said that joining together in litigation is beneficial for workers because it reduces the risk of retaliation. It’s harder for a company to fire hundreds of women than to get rid of one.
“The inevitable result of today’s decision will be the underenforcement of federal and state statutes designed to advance the well-being of vulnerable workers,” Ginsburg wrote.
She also noted that forcing many individual cases into arbitration will result in a lot of conflicting opinions ― which means those individual cases, typically settled in secrecy, won’t produce any meaningful clarity on the treatment of women at work.
Right now, about 60 million workers have already signed away their right to go to court by agreeing to arbitrate disputes with their employers, according to an Economic Policy Institute analysis released last year. About 30 percent of those workers have also signed the kind of class-action waivers that were at issue in this decision.
Expect that number to rise, said Ruckelshaus. She told HuffPost that she recently sat on a panel with an in-house lawyer who said companies were watching this case and if it came down in their favor, more would require employees to sign these agreements.
Under massive public pressure, a few companies had recently said they would no longer require women who’d been harassed on their watch to go to arbitration. Most recently, Uber made such a pledge.
However, the ride-hailing company also said it would still force class actions into arbitration.