WASHINGTON–The Supreme Court has ruled 5-4 that employers can use class-action waivers in arbitration agreements and bar employees from such lawsuits. Instead, employers may require employees to use individual arbitration to settle disputes, the Court ruled.
The ruling is considered a strong victory for employers.
In writing the majority opinion, Justice Neil Gorsuch said the National Labor Relations Act—which guarantees the right of workers to join together in “mutual aid and protection”—does not “displace” arbitration law.
“The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written,” wrote Gorsuch.
In writing the dissent, Justice Ruth Bader Ginsburg said, “Employees’ rights to band together to meet their employers’ superior strength would be worth precious little if employers could condition employment on workers signing away those rights.”
Separately, the court also ruled 5-4 in Home Depot v. Jackson in favor of a Home Depot customer who was sued in state court by Citibank in a debt-collection case. The customer responded by filing a counterclaim with Home Depot as a defendant, making a claim of unfair trade practices. Home Depot tried to move the case to federal court, and the Supreme Court sided with the customer in saying that because Home Depot was not a defendant in the initial lawsuit, it lacks standing for doing so.
Specifically at issue is the Class Action Fairness Act, which creates federal jurisdiction for certain large class action. It cannot be invoked by counterclaim defendants as well as traditional defendants, the court ruled. Justice Clarence Thomas joined the liberal justices in deciding the case.