June 22, 2021
By: Stacy N. Cammarano and Joseph M. Sellers
We are at a crossroads that will determine how the nation’s workers can protect their own rights as the defense bar is working feverishly to erect barricades to the few remaining legal avenues workers have left to address workplace disputes.
With the enthusiastic support of the U.S. Supreme Court, large employers have overwhelmingly required their workers to submit their workplace disputes to binding arbitration and forbids them from pursing their claims together. But after many workers have pursued similar claims in arbitration—rather than abandoning them as employers may expect—employers are now being counseled to make arbitration more challenging and expensive to the workers.
A legislative solution exists that would level the arbitral playing field: the Protecting the Right to Organize (PRO) Act of 2021 (H.R. 842), the union-backed bill that would protect workers’ ability to pursue arbitration claims in groups. The House passed the bill in March, and it is now before a Democrat-controlled Senate for the first time and gaining public support.
U.S. Supreme Court Set Hurdles
Both the Civil Rights Act of 1964 and the Fair Labor Standards Act provide a forum in federal court for employees to challenge discrimination and wage theft, but the Supreme Court has repeatedly acceded to the defense bar’s demands, enforcing arbitration agreements that foreclose litigation in court and that forbid workers from vindicating their rights collectively.
For example, in Epic Systems Corp. v. Lewis, the Supreme Court held that it did not violate the National Labor Relations Act—a statute protecting workers’ ability to organize—for employers to require employees to waive their right to pursue claims collectively or on a classwide basis in arbitration.
The Supreme Court went even further in Lamps Plus Inc. v. Varela, holding that an employer could not be compelled to arbitrate employee claims on a classwide basis where the arbitration agreement was ambiguous about whether class arbitration was permitted.
The PRO Act would statutorily reverse these decisions.
Notwithstanding these hurdles, workers have successfully pursued individual claims in arbitration, sometimes in large numbers and challenging the same unlawful conduct by the same corporations, even where it might have been more efficient to pursue class action lawsuits in court.
Employers Work to Curtail Worker’s Rights
Burdened by the costs associated with these cases, which the defense bar calls “mass arbitrations,” employers are now balking at the very arbitration procedures that they imposed on these workers in the first place.
After DoorDash recently failed to pay the required arbitration fees on time, Judge William Alsup in the Northern District of California compelled the company to pay its fees and arbitrate 5,010 delivery drivers’ cases. Alsup said “in irony upon irony, DoorDash now wishes to resort to a class-wide lawsuit, the very device it denied to the workers, to avoid its duty to arbitrate. This hypocrisy will not be blessed.”
Now, leading firms that represent employers have advanced proposals that would further curtail workers’ ability to assert their rights. After years of advocating on behalf of their corporate clients to impede workers’ ability to bring cases in court, and to bring class actions anywhere, these firms seek to make alternative adjudication procedures, such as arbitration, cost prohibitive to individual workers.
Some measures, such as the requirement that employees file a notice with the company or engage in informal alternative dispute resolution before filing, are disingenuous. Where the employer does not intend to negotiate such claims before they are filed, the provisions act merely as another hurdle to bringing a case.
Other proposals may undermine the very system employers have favored. Cost-splitting and fee-shifting provisions may not be enforceable at all because purportedly procedural arbitration provisions are not valid where they have the effect of waiving substantive rights.
Recognizing that forcing workers to pursue their claims in arbitration might not have the intended effect of minimizing the number of workers whose claims are pursued, the defense bar also proposes measures that can only be described, to use Judge Alsup’s term, as “hypocrisy.”
For example, it suggests that arbitration agreements include a provision, at the election of the employer, that employers be able to settle as a certified class the individual worker claims that its agreement required be pursued separately. Similarly, employers are counseled to develop procedures to arbitrate multiple claims in batches, assigned to a single arbitrator, and with a single fee for the employer.
Yet, an efficient means to adjudicate multiple cases already exists: class actions. Where claims are sufficiently similar to warrant their adjudication collectively, employers should permit those claims to proceed in a certified class action in the first place, not as a last resort when the employer has exhausted all other means of achieving an employer-friendly global resolution.
Since the passage of the Civil Rights Act of 1964 more than 50 years ago, workers’ access to the courts—and increasingly arbitral fora—has been eroded. Substantive rights are only as good as the procedures available to enforce them.
The PRO Act offers some hope that Congress will come to the rescue and enshrine protections for workers to organize and enforce their rights as a group. In the meantime, we must skeptically examine new defense proposals, and fight those unenforceable provisions that waive long-standing substantive rights to challenge discrimination and wage theft.
The complete article can be viewed here.
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Stacy N. Cammarano is an associate in the Civil Rights and Employment practice group at Cohen Milstein Sellers & Toll PLLC.
The authors represent workers challenging discrimination, wage theft, and other illegal employment practices—individually and through class actions—in arbitration and court.