Laws are just pretty words if you can’t enforce them, and we are arriving at a point in this country where the laws protecting workers’ rights are merely words. A devastating blow to workers’ rights was last week’s Supreme Court decision in Epic Systems Corp. v. Lewis. The court held that companies can force their employees to forego their right to go to court and require them to give up their right to band together in a class action – forcing employees to go it alone in a confidential arbitration proceeding when they have been wronged. As U.S. Supreme Court Justice Ruth Bader Ginsberg pointed out in her dissent, “[t]he inevitable result of today’s decision will be the under enforcement of federal and state statutes designed to advance the well-being of vulnerable workers.”
Employees are often subject to a mandatory arbitration agreement without even being aware of it. Often, they first learn of it when they try to bring a lawsuit in court and are told they must go to secret arbitration proceedings instead. The “agreement” may have appeared somewhere amidst an online application for the job, been mixed in with copious on-boarding documents at hire, or buried in an email sent out after they started the job. Even if employees realize what they are signing, they need the job and do not have any real bargaining power to decline to sign the agreement.
Why do 80 percent of America’s top companies require their employees to arbitrate workplace claims, and why do half of those require the employees to waive their rights to class actions? Because it helps the companies avoid liability for wrongful conduct and hides bad behavior. A private arbitration proceeding takes away the worker’s right to have her case heard in an open court by a jury of her peers. Instead, a professional arbitrator decides the case – an arbitrator who knows that the arbitration expenses are typically paid by the company and who knows full well that if he develops a reputation for giving large recoveries to workers, he will not be selected by the company to hear cases in the future. Arbitration is typically extremely confidential, so no one will ever hear of the company’s misconduct, and no precedent will be set by the outcome of a case in the worker’s favor. Arbitration places a heavy hand on the scales of justice in favor of the company.
On top of this, requiring waiver of class actions means that most cases will never be brought at all, especially if they involve low wage earners. As employment lawyers, our phones ring daily with calls from workers who have been denied overtime pay, sexually harassed or terminated for unlawful reasons. These workers typically can’t afford to pay an hourly fee, so lawyers take these cases on a contingency fee basis, where we are paid a percentage of the recovery only if we are successful. Since the amount of a recovery in these cases is based on the amount the person earns, a low wage earner’s case may not be worth a great deal of money even if we win. However, the time involved and the expenses like filing fees, copying costs and expert fees may be as high for a case over a small amount of lost wages as for a case involving a higher earner. Therefore, for a low wage earner to bring a lawsuit over something like unpaid overtime, it often only makes economic sense to bring such lawsuits as a class action.
Epic Systems is the equivalent of a three-alarm fire for workers’ rights. Action must be taken immediately to contain its devastating impact. Lawmakers must amend the law to release employment disputes from the grip of mandatory arbitration. U.S. Sen. Sherrod Brown, D-Ohio, is the co-sponsor of the Arbitration Fairness Act of 2018, and workers must demand passage of this bill, or one like it, in order to restore their longstanding right to their day in court.
Jason Bristol is an employment lawyer with Cohen, Rosenthal and Kramer in Cleveland, Ohio who represents workers in discrimination and wage and hour cases.
Betsy Rader is an employment lawyer with Betsy Rader Law LLC in Geauga County, who represents workers in discrimination cases and also is the Democratic candidate for U.S. Congress in the 14th District.