National Consumers League

National Consumers League: Supreme Court ruling in Epic Systems v. Lewis et al a ‘disaster for workers’

May 21, 2018

Contact: NCL Communications, Carol McKay, carolm@nclnet.org, (202) 207-2831

Washington, DC—In a controversial 5-4 decision, the U.S. Supreme Court today sided against workers and with powerful corporations. In Epic Systems v. Lewis et al., the high court today said it is okay for companies to require workers to sign forced arbitration clauses as a condition of employment. These clauses have the effect of nullifying the rights of workers to band together in class action suits when a company engages in systemic wrongdoing or breaks the law. Because the right to bring charges into a public court is waived by signing these clauses, allegations end up behind closed doors in secret proceedings where companies overwhelmingly win.

“This is a gift to America’s corporations and a disaster for workers,” said NCL Executive Director Sally Greenberg. “Allowing companies to break the law and not have to worry about being held accountable creates a toxic work environment where wrongdoing runs rampant. We’ve seen it at Fox News, where Roger Ailes and Bill O’Reilly sexually harassed female employees for decades and hid behind forced arbitration clauses. We’ve see it, too, at Sterling Jewelers, parent company to Jared and Kay Jewelers, which required employees to sign forced arbitration clauses and where more than 250 women allege rampant sexual harassment.”

Protecting corporate wrongdoing, whether it’s wage theft, discrimination, or sexual harassment, is bad policy and as history has proven, is ultimately bad for business. Companies like Microsoft understand that. “The silencing of people’s voices has clearly had an impact in perpetuating sexual harassment,” Brad Smith, Microsoft’s president and chief legal officer told the New York Times last year.

In an op-ed article in the New York Times in October 2017, Gretchen Carlson, who was sexually harassed at Fox News when she was a reporter, wrote that “reforming arbitration laws is key to stopping sexual harassment.” As Carlson recently stated, “If a woman’s being sexually harassed in the workplace and she has an arbitration clause, she’s screwed.”  

Few workers are able to take on their employer by themselves and risk termination, abuse, or worse. Few workers can afford to spend thousands of dollars to pursue an individual case. Collective and class actions exist for this very reason; so that regular people can pool their claims and get a lawyer to pursue their case.

An estimated 60.1 million workers in America – 56 percent of private-sector nonunion employees – have been subject to forced arbitration clauses, and of those, nearly one in three (30 percent) have lost the right to challenge wrongdoing through collective legal actions. If it is not already in place, today’s decision will mean that becomes standard employer practice. Sadly, with this decision the Supreme Court in Epic Systems v. Lewis et al. has given corporations the right to further tilt the legal system to their favor.

A spirited and lengthy dissent in Epic Systems, written by Justice Ruth Bader Ginsburg and joined by Justices Sotomayor, Kagan, and Breyer, called the decision “egregiously wrong,” a “destructive result,” and said, “the inevitable result of today’s decision will be the underenforcement of federal and state statutes designed to advance the well-being of vulnerable workers.”

"We agree with Justice Ginsburg and her colleagues," said NCL's Greenberg. "Now we must demand from Congress a legislative solution that restores the fundamental right of workers – including women fighting sexual harassment – to band together."

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About the National Consumers League
The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit http://www.nclnet.org.