June 1st, 2020

On Law

Most important business issue of the Supreme Court term could force Americans to act against their will

Robert Barnes

By Robert Barnes The Washington Post

Published October 3, 2017

Most important business issue of the Supreme Court term could force Americans to act against their will
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.

He asked Richard Griffin, representing the National Labor Relations Board, whether three employees with the same complaint could go to the same attorney to represent them.

When Griffin said yes, Kennedy responded: "Well, that is collective action."

But Griffin said the act does not allow an "employer to choose which type of activities the employees can engage in."

Roberts seemed alarmed about the change that would come about if the court rules for the workers.

"This decision in your favor would invalidate the agreements covering 25 million employees?" he asked.

Daniel Ortiz, a University of Virginia law professor representing the workers, agreed that it would but said it is what the NLRA requires.

Breyer seemed to offer what might be a compromise to the case. He proposed taking class actions in federal court off the table and finding that employees must have the opportunity to proceed collectively at least in arbitration.

The cases are EPIC Systems Corp. v. Lewis, Ernst & Young v. Morris and NLRB v. Murphy Oil.

If Gorsuch was silent in the first argument, he was the center of attention in the second case. He's likely the deciding vote, which did not bode well for the government's position.

The court was rehearing a case in which it split last term, before Gorsuch joined the court. The case addresses confusion over what constitutes a violent felony that requires the deportation of an immigrant.

The case was brought by James Garcia Dimaya, a citizen of the Philippines admitted to the United States as a lawful permanent in 1992, when he was 13. In 2007 and 2009, he was convicted of residential burglary. The Department of Homeland Security determined that his crimes could be considered crimes of violence and thus were aggravated felonies that made him eligible for deportation.

But Dimaya's lawyers said the law was unconstitutionally vague, just as the court in a 2015 opinion by Justice Antonin Scalia had said similar wording in the Armed Career Criminal Act was insufficient.

The court last term split 4 to 4 on Dimaya's case, so it was reargued for Gorsuch.

Deputy Solicitor General Edwin Kneedler repeated the government's argument that a criminal case was different than the civil proceedings concerning deportation.

"The immigration laws have always been enforced through a broad delegation of authority to the executive branch, reflecting the fact that immigration and immigration enforcement are closely related to the national security and foreign relations of the United States," Kneedler said.

But Gorsuch was a persistent questioner.

He said that the law's use of categories of crimes that make one eligible for deportation, rather than a specific list of crimes, forced judges to do the work of legislators.

When Kneedler defended the approach, Gorsuch responded: "Really? Even when it's going to put people in prison and deprive them of liberty and result in deportation, we shouldn't expect Congress to be able to specify those who are captured by its laws?"

The case is Sessions v. Dimaya.