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Supreme Court rules that companies can require workers to accept individual arbitration

An ideologically divided Supreme Court ruled Monday that companies may require workers to settle employment disputes through individual arbitration rather than joining to press their complaints, a decision affecting as many as 25 million workers. In the Federal Arbitration Act, Congress has instructed federal courts to enforce arbitration agreements according to their terms – including terms providing for individualized proceedings.”

Gorsuch was joined by Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas and Samuel Alito. But as a matter of law, the answer is clear.”

Justice Ruth Ginsburg wrote of the belief of herself and the other three dissenting judges that the decision is “egregiously wrong.” She warned that it would likely lead to a lack of enforcement of both federal and state laws intended to “advance the well-being of vulnerable workers.” The Chicago Tribune reports that she also expressed a concern that employees may be discouraged from raising issues in the workplace because monetary awards given as a result of individual arbitration often is not enough to cover the employee’s cost of going to arbitration. As reports, Gorsuch wrote “that the 1925 Federal Arbitration Act trumps the National Labor Relations Act and that employees who sign employment agreements to arbitrate claims must do so on an individual basis—and may not band together to enforce claims of wage and hour violations.”

In other words, instead of harnessing their collective power, employees who have signed such contracts can’t join a class action lawsuit and instead must seek recourse individually, through arbitration.
The U.S. Supreme Court votes 5–4 to allow companies to enforce contracts which bar employees from entering class action lawsuits.