On its surface, the Supreme Courtâ€™s 5-4 decision in Epic Systems v. Lewis, handed down last week , looks like a significant defeat for workers. In ruling that companies can require employees to resolve contract disputes through arbitration, rather than class-action lawsuits, the Court limited the ability of workers to band together in court to pursue overtime and other statutory claims. Yet Epic Systems may well prove beneficial to workers, a qualified blessing in disguise.
Class actions enable lawyers to bring suits on behalf of large numbers of similarly situated claimants. The Epic Systems decision, written by Justice Neil Gorsuch, rejects a 2010 attempt by the National Labor Relations Board, the federal agency dealing with union organization and collective bargaining, to prohibit non-union employers from using so-called â€śclass action waiversâ€ť in employment contracts. Allowing employers to bar workers from bringing lawsuits collectively could potentially reduce their options for redress when their claims are too small to justify their own lawsuits. Perhaps paradoxically, workers as a class may gain from employersâ€™ having a renewed incentive to put in place fair arbitration agreements. Thatâ€™s because arbitration, if certain safeguards are provided, provides a cheaper, more informal mechanism for workers to assert their claims than class-action suits.
In arbitration, most claimants are likely to get a hearing- irrespective of the strength of their claim or whether or not they have a lawyer. Getting â€śa day in courtâ€ť - in this case, a hearing on the merits - is an extremely valuable thing.
Private class action lawsuits can serve a valuable role in law enforcement, especially in consumer protection cases where individuals will not press claims. But employment law is different. By removing a source of legal uncertainty regarding class action waivers the Supreme Court has helped to reinforce a surprising reality: The interests of most workers are better served through arbitration than by searching for an attorney to take their case to court.