Courts

As The World Begins To Question Binding Arbitration, Gorsuch Goes Full White Man

Gorsuch closes courthouse door, Ginsburg bangs on it hard in Epic dissent.

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Under normal circumstances, it would be hard to get people locked into a Supreme Court decision about binding arbitration. The Roberts Court has been the most pro-employer Court in American history, but the way it has systematically cut off access to courts is a largely under-reported story. The Roberts Court has made it increasingly difficult to even fight your employer in front of a judge and jury, but these decisions rarely pop on the national radar and are given only cursory attention by the mainstream media.

Hopefully, these are not normal circumstances. Thanks to the #MeToo moment, people are increasingly aware that many claims about employer misconduct never see the light of day. The employer’s ability to lock employees into binding arbitration is now, finally, being understood as an insidious tool employers can use to quash legitimate claims and maintain a culture of abuse and silence.

Congress did not decide to give employers this kind of power. Conservative courts, and especially the Roberts Court, have decided to make employers virtually unassailable in open court. Today’s Supreme Court decision in Epic Systems Corp. v. Lewis continues that clandestine revolution towards employer power. That the majority opinion was written by Neil Gorsuch, who sits in a seat stolen for him by Senate Republicans, just makes the conservative project to silence employees a little more obvious.

What you think the issue was about in Epic kind of depends on how you think the case should have come out. Employees of Ernst & Young were forced to sign binding arbitration agreements as a condition of employment. This agreement prohibited them from seeking class status for any wage dispute claims. You can understand why class status is important. An individual wage dispute claim against a powerful employer like Ernst & Young is not only hard to prove, it’s also difficult to afford. You could easily spend more money fighting than you would make if you won. But if you can organize as a class, you have a better shot at both winning and recovering an amount to make the fight worthwhile.

There are a lot of people who like to believe that judges and justices engage in an objective analysis of the law and are led by the law to their conclusion. I reject such naivete. Nearly every judge is “outcome oriented,” and you can see it in a case like this when the very “question presented” tells you what their preferred outcome will be.

In Epic, if you believe that the employers should be able to lock out their own employees from class status, than you ask whether the arbitration agreements are allowed under the Federal Arbitration Act.

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If you think that the employees should have a courthouse remedy, then you ask whether the arbitration agreements are prohibited under the National Labor Relations Act.

And so we play our game. Writing for the majority, Gorsuch found that the agreements were clearly within the scope of the FAA, and he couldn’t possibly imagine how the NLRA would frustrate such agreements. In a blistering dissent that was actually longer than the majority opinion, Ruth Bader Ginsburg found that the NLRA clearly prohibits binding arbitration agreements that prevent collective action by employees.

Gorsuch’s closing stanza is the money quote from his opinion:

The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written. While Congress is of course always free to amend this judgment, we see nothing suggesting it did so in the NLRA—much less that it manifested a clear intention to displace the Arbitration Act. Because we can easily read Congress’s statutes to work in harmony, that is where our duty lies.

To reach the opinion that the “law is clear,” you have to practice a kind of willful ignorance that Gorsuch and originalists thrive on. You have to pretend that the National Labor Relations Act, an Act that exists to secure the right of employees to engage in collective action, doesn’t speak to this situation because this particular kind of collective action wasn’t specifically mentioned in the statute.

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Of course, asking an orginalist to condescendingly ignore the spirit of a statute is like asking a gymnast to touch her toes. It’s that easy for them. As Gorsuch explains:

Neither should any of this come as a surprise. The notion that Section 7 confers a right to class or collective actions seems pretty unlikely when you recall that procedures like that were hardly known when the NLRA was adopted in 1935. Federal Rule of Civil Procedure 23 didn’t create the modern class action until 1966; class arbitration didn’t emerge until later still; and even the Fair Labor Standards Act’s collective action provision postdated Section 7 by years.

Class status didn’t exist in 1935, so the NLRA couldn’t possibly protect it. In related news, chlorophyll didn’t exist 4 billion years ago, so the Sun is still pissed off that plants steal energy in life giving ways.

Gorsuch’s opinion does everything he can to take us back to 1935, when white male employers were unassailable in courts by their employees.

For her part, Ruth Bader Ginsburg is having none of this.

This argument is conspicuously flawed. When Congress enacted the NLRA in 1935, the only §7 activity Congress addressed with any specificity was employees’ selection of collective-bargaining representatives. See 49 Stat. 453. The Act did not offer “specific guidance” about employees’ rights to “form, join, or assist labor organizations.” Nor did it set forth “specific guidance” for any activity falling within §7’s “other concerted activities” clause. The only provision that touched upon an activity falling within that clause stated: “Nothing in this Act shall be construed so as to interfere with or impede or diminish in any way the right to strike.” Id., at 457. That provision hardly offered “specific guidance” regarding employees’ right to strike. Without much in the original Act to support its “structure” argument, the Court cites several provisions that Congress added later, in response to particular concerns…

But even if each of the provisions the Court cites had been included in the original Act, they still would provide little support for the Court’s conclusion. For going on 80 years now, the Board and federal courts—including this one—have understood §7 to protect numerous activities for which the Act provides no “specific” regulatory guidance.

She also wrote:

To the employees’ argument, the Court replies: If the employees “really take existing class and collective action rules as they find them, they surely take them subject to the limitations inherent in those rules—including the principle that parties may (as here) contract to depart from them in favor of individualized arbitration procedures.” Ante, at 14. The freedom to depart asserted by the Court, as already underscored, is entirely one sided.

See supra, at 2–5. Once again, the Court ignores the reality that sparked the NLRA’s passage: Forced to face their employers without company, employees ordinarily are no match for the enterprise that hires them. Employees gain strength, however, if they can deal with their employers in numbers. That is the very reason why the NLRA secures against employer interference employees’ right to act in concert for their “mutual aid or protection.” 29 U. S. C. §§151, 157, 158.

And then she goes on and quotes Robert Bork, positively, to heap more scorn on the majority’s opinion:

It is, therefore, this Court’s exorbitant application of the FAA—stretching it far beyond contractual disputes between merchants— that led the NLRB to confront, for the first time in 2012, the precise question whether employers can use arbitration agreements to insulate themselves from collective employment litigation. See D. R. Horton, 357 N. L. R. B. 2277 (2012), enf. denied in relevant part, 737 F. 3d 344 (CA5 2013). Compare ante, at 3–4 (suggesting the Board broke new ground in 2012 when it concluded that the NLRA prohibits employer-imposed arbitration agreements that mandate individual arbitration) with supra, at 10–11 (NLRB decisions recognizing a §7 right to engage in collective employment litigation), and supra, at 17, n. 8 (NLRB decisions finding employer-dictated waivers of §7 rights
unlawful).

As I see it, in relatively recent years, the Court’s Arbitration Act decisions have taken many wrong turns. Yet, even accepting the Court’s decisions as they are, nothing compels the destructive result the Court reaches today. Cf. R. Bork, The Tempting of America 169 (1990) (“Judges . . . live on the slippery slope of analogies; they are not supposed to ski it to the bottom.”).

Nobody knows how to lose like the Notorious RBG.

Where I think Gorsuch and Ginsburg agree is that, seeing as we are now at “the bottom” of this slippery slope into full employer control of access to justice through binding arbitration, the solution is Congress. To get them there, all of this progressive and women-led agitation needs to be focused on legal results as well as social and political change. Binding arbitration is not a sexy issue, and not one that you can expect most lay people to fully grasp. But it is a concrete thing that Congress can do and, thanks to a stolen Supreme Court seat, has to do if we are going to reverse the trend of mandatory arbitration.

Congress needs to pass legislation specifying what rights employers can force employees to sign away as a condition of employment. Conservative justices have set us on a path where nearly anything thrown into those employment agreements will be deemed enforceable. At this point, only Congress can change that trend.

The Roberts Court has done its work well — it’s going to take a whole lot of #BlueWave to wash this away.

Epic Systems Corp. v. Lewis [Supreme Court]

Elie Mystal is the Executive Editor of Above the Law and the Legal Editor for More Perfect. He can be reached @ElieNYC on Twitter, or at elie@abovethelaw.com. He will resist.

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