The Hill posted a story today about today’s Supreme Court ruling that employers can include clauses in employment contracts that force employees to settle disputes individually with a third-party arbitrator.
There are a few aspects of this ruling–the most obvious one is that employers can write employment contracts without government interference. Another is whether or not employers have the right to include in employment contracts clauses that include the prohibition of class-action lawsuits to settle disputes over wages and working conditions. These clauses preventing class-action lawsuits in employment contracts are fairly common. It should also be noted that many companies have mandatory arbitration procedures–that is the proper way to deal with conflicts. Our society has often been too quick to seek legal action as a way to gain instant wealth. Not all class-action lawsuits have merit. We live in a society where people are free to change jobs. If salaries or working conditions are unacceptable, a company will not be able to find quality employees. The system will police itself. There are also federal avenues available to address valid salary or working condition complaints.
The Hill reports:
The EPI ( Economic Policy Institute (EPI), a liberal think tank) found in a survey last year that 53.9 percent of nonunion private-sector employers already have mandatory arbitration procedures.
Software company Epic Systems Corp., accounting and financial firm Ernst & Young LLP and Murphy Oil USA Inc. were the employers at the center of three cases the court consolidated that argued in support of the agreements.
The government, which changed its position under President Trump, had also intervened in support of the employers, arguing that Congress enacted the Federal Arbitration Act in 1925 to “overcome judicial resistance to arbitration.”
The court’s decision settles a deep split among the lower courts. The 2nd, 5th and 8th circuit courts of appeal and the California and Nevada supreme courts had ruled these arguments are fully enforceable, while the 7th and 9th circuits, along with the National Labor Relations Board, ruled the agreements violate the NLRA.
Government does not belong in the business of writing employment contracts or telling employers what to put in them.