WASHINGTON — The Supreme Court began its new term Monday with liberal and conservative justices seemingly split over the most important business issue of the term, concerning the ability of companies to force workers into individual arbitration over wage and other workplace disputes.
A lawyer for the workers told the court that an estimated 25 million employees have signed contracts that the companies say rule out collective action on workplace issues and are authorized under the Federal Arbitration Act. That would, for example, keep those workers from pursuing class-action lawsuits in federal court.
But the workers contended that another federal law, the National Labor Relations Act, makes illegal any contract that denies employees the right to engage in “concerted activities” for the purpose of “mutual aid and protection.” That means some sort of collective action cannot be prohibited, the workers say.
The advocacy in the case was changed by the political turnover in Washington. The National Labor Relations Board, an independent government agency, agreed with the workers. So did the Justice Department — until the election. Then the Trump administration filed a brief siding with the companies.
The justices quickly took sides as well.
On the left, Justice Stephen Breyer said the companies were proposing a radical change.
“I’m worried about what you are saying is overturning labor law that goes back to, for FDR at least, the entire heart of the New Deal,” Breyer said.
The court is considering three consolidated cases, and Justice Ruth Bader Ginsburg pointed out that in one of them, the dispute is $1,800 in wages.
“To proceed alone in the arbitral forum will cost much more than any potential recovery for one,” Ginsburg said. “That’s why this is truly a situation where there is strength in numbers, and that was the core idea of the NLRA. … We have to protect the individual worker from being in a situation where he can’t protect his rights.”
But Washington attorney Paul Clement, representing the employers, said the court’s more recent decisions favoring the ability of companies to force arbitration — generally seen as less expensive than litigation and more protective of business interests — provide a “well-trod path” for deciding the cases.
“Because of the clarity with which the FAA speaks to enforcing arbitration agreements as written, the FAA will only yield in the face of a contrary congressional command, and the tie goes to arbitration,” Clement said.
Chief Justice John Roberts and Justices Anthony Kennedy and Samuel Alito appeared receptive to that view. The court’s other conservatives, Clarence Thomas and Neil Gorsuch, did not ask questions at the hour-long oral arguments.
Kennedy questioned whether the contracts really prohibited employees from banding together.
