By: Jennifer Bourne
The short answer to this question is yes, but maybe not for long. On October 2, 2017, the Supreme Court heard arguments for three consolidated cases regarding the legality of private arbitration clauses in employment contracts. These agreements challenge the notions of various federal laws meant to protect the rights of employees from certain actions by their employers, such as the National Labor Relations Act (NLRA), and the Norris-LaGuardia Act (NLGA). Section 7 of the NLRA clearly states: “Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . . .” If employers are forcing their employees to hush class action claims through arbitration, then that is clearly restricting the avenues by which employees may seek justice. Justice Kagan eloquently alluded to this problem during oral argument when she explained, “. . . usually when you have a right, the fact that there is one way to exercise a right left over does not make it okay if we’ve taken away another 25 ways of exercising the right. You know, when we think about the First Amendment, we don’t say we can ban leafleting because you can always write an op ed.” The NLGA has similar protections for labor unions and has established that yellow-dog contracts are unenforceable in federal court. These yellow dog contracts gained popularity at the start of the 20th century as a means for employers to force employees to sign agreements not to join a labor union as a condition of employment. At oral argument, Justice Ginsburg compared arbitration agreements in employment contracts to these yellow dog contracts, alluding to the fact that they should also be unenforceable.
The Supreme Court granted certiorari in order to make a formal determination for a circuit split. In the Ninth and Seventh Circuits, judges ruled that the arbitration agreement violated the NLRA, making it unenforceable. However, the Fifth, Eighth and Second Circuits have all enforced these arbitration agreements under class action waivers.
While none of the parties of these consolidated cases are Silicon Valley giants, the practice of including these arbitration agreements in employment contracts is especially prevalent in companies such as Twitter, Google and Uber. For example, drivers for Uber in California recently filed suit seeking class status for 240,000 drivers suing the company for violation of minimum wage and overtime pay laws. This case is currently pending in the 9th circuit until the decision of the consolidated cases is released. Additionally, with the slew of recent sexual harassment and gender discrimination allegations coming from tech companies, it is more important than ever that employees feel that they can bring claims against their employer in these difficult situations. This summer rumors swirled through the media with articles highlighting the sexual harassment and unequal access to promotions for women within the tech industry, specifically at Google. However, Google’s recent implementation of the arbitration clause would disallow newer employees from bringing these claims forward. This creates a dangerous environment for any employee or anyone seeking employment in the private sector because it allows companies to conceal any claims brought against them from the public eye. Additionally, these arbitration clauses make it incredibly easy for companies to prevail in these claims. The arbitration agreement does nothing for the employee in these scenarios, it simply protects the employer. It is unclear how the Supreme Court will rule in this case, especially considering the addition of Justice Gorsuch and restoration of the nine justice bench. However, it is clear that tech companies will be keeping a watchful eye for the decision date in order to protect their own reputations from public scrutiny when their employees sue for discrimination claims on a class action basis.
Student Bio: Jennifer Bourne, Suffolk University Law School J.D. Candidate 2019. She holds a B.A. in Political Science from Boston University.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.