The fight for worker rights took another blow today. The Supreme Court ruled employees at a California company could not band together in an effort to get compensation from their employer for a breach of their data. The 5-4 decision put yet another limitation on the ability to use class arbitration and class actions against bigger, more powerful opponents.
Attorney Dave Scher, head of the James Hoyer Employment Law Division, says the decision is disappointing but “really not surprising, given the conservative shift on the Court.” Recent rulings have chipped away at employee rights and, unfortunately, this will make it even more difficult for employees to tackle joint grievances in the workplace.
“It impacts any issue where employees band together to fight unfair circumstances in their workplace—not paying overtime, underpaying tips, break times, not getting benefits they’re entitled to—things like that,” Scher explained.
The ruling helps allow companies to ban class action lawsuits and class arbitration proceedings to address disputes; instead, forcing employees to bring their cases on an individual basis. It essentially creates a divide and conquer scenario for companies to take away the “strength in numbers” individuals can get by working together.
“It allows corporations to take advantage of low-income employees and prevents them from being held accountable for improper practices,” Scher said. “They do what they want, because they know there’s really nothing these employees can do about it.”
It’s cost prohibitive in most cases for employees to bring individual cases for claims that don’t amount to large sums, even if the collective damage to all employees is large. Class actions and class arbitrations are supposed to help even the playing field for employees and consumers by spreading out the costs, but that gets harder now with this ruling.
“Companies can afford to fight, but an individual with a $1,000 or $5,000 claim can’t afford it. They can’t pay a lawyer to help them, and the way it’s now structured, many lawyers can’t afford to bring the case, because they won’t recoup their costs.”
According to the Economic Policy Institute, nearly 54-percent of non-union, private sector employers require mandatory arbitration clauses and 65-percent of large companies with more than 1,000 employees have them. These arbitration agreements require workers to give up their rights to have disputes settled in a court of law. They are often a take-it-or-leave-it deal, where if you don’t sign, you don’t get the job. Unfortunately, many don’t even realize the rights they are giving up and that it puts them at a significant disadvantage should a dispute arise.
What can you do about
Some employment attorneys are developing a head-on approach to tackle “class” bans by filing large numbers of arbitration cases, one by one.
“Creative employment lawyers are saying—‘Fine, instead of having a class, I’ll find a thousand workers who fit into this category, and I’ll represent each of them. And I’ll bring a separate arbitration claim for each of them, and you’re going to have to pay for the cost of each of those arbitrations.’ And that is having some degree of effect,” Scher explained.
In other words, in the world of unintended consequences, class bans could end up backfiring on some employers.
“Essentially employers are coming back and saying, ‘Well,
wait a minute, that’s completely inefficient. It’s all the same issue’—which is
the whole point of having a class action,” Scher explained. “So ultimately, we
can put them all together in a class or you can oppose class actions. Which do
you want? You’re making me do this.”
If you find yourself facing an unfair workplace issue, click here to contact attorney Dave Scher for an evaluation.