Yesterday’s 5-4 Supreme Court decision upholding agreements to individually arbitrate wage-and-hour claims was neither surprising nor novel as a legal matter. Nor – notwithstanding the variously breathless, furious, and apocalyptic reactions it has drawn from stage Left – is it objectionable as a matter of policy, or “anti-worker.” It is pro-liberty, pro-contract, and pro-respect for private ordering.
On a practical level, the decision in Epic Systems v. Lewis and two companion cases leaves in place (rather than changing) a by now familiar business practice. Not until 2012 did the National Labor Relations Board embrace the notion that the National Labor Relations Act bans arbitration agreements requiring individual rather than class-action pursuit of wage claims, and that Obama-era position has not been able to maintain the assent even of the full federal government (the current Department of Justice disagrees, and filed against the agency’s position).
At the level of legal precedent, this is by one count the seventh major Court decision since 1983 confirming (in each case over liberal dissents) that the Arbitration Act’s broad federal policy favoring arbitration agreements is compatible with, rather than ousted by, some other federal law. In fact, in one of those decisions, 1991’s Gilmer v. Interstate/Johnson Lane Corp., the Court had already implied (in interpreting a parallel statutory scheme) that the federal statute directly governing wage and hour suits, the Fair Labor Standards Act (FLSA), does not ban this kind of arbitration agreement. That foray having yielded nought, advocates came back with a “bank shot” (Justice Neil Gorsuch’s phrase) theory that even if the FLSA doesn’t forestall individualized arbitration of FLSA claims, the National Labor Relations Act does, under a miscellaneous clause that extends federal legal protection to some “concerted” activity by employees that does not consist of union action. But although some labor movement advocates have hoped to use this catchall language as the future engine by which the NLRB would gain power to impose major new regulatory requirements at non-union workplaces – all sorts of on- and off-job interactions between colleagues might be interpreted as concerted activity if you squint at them the right way – it was always doubtful that the current Court would go along with a very broad reading on that.
Read more at https://www.cato.org/blog/apocalypse-not-arbitration-survives-epic-systems-v-lewis
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