In a recent 5-4 decision that will likely impact tens of millions of private sector employees, the U.S. Supreme Court ruled that workers cannot band together to file class action lawsuits that challenge employers’ violations of federal labor laws.

According to a report by NPR, the majority decision written by Justice Neil Gorsuch stated that the 1925 Federal Arbitration Act trumps the National Labor Relations Act and, thus, employees who sign arbitration agreements must arbitrate claims on an individual basis and cannot band together to file wage and hour violations claims.

The dissenting opinion, written by Justice Ruth Bader Ginsburg, stated that the 1925 Act was outdated, and employers essentially used provisions of the law to intimidate employees. Since many employees fear retaliation from their employer, even over small claims, their ability to band together and file a class action lawsuit is highly important.

More About Supreme Court Ruling

The ruling stems from three cases brought against major employers Murphy Oil U.S.A, Inc., Ernst & Young and Epic Systems Corp. As a condition of employment with these companies, employees were required to waive their rights to join a class action suit. Instead, they would be required to pursue individual arbitration of any claims. In all three cases, employees of the companies tried to file lawsuits on behalf of a group, claiming that the legal fees they would be required to pay would easily surpass the amount of compensation they could win in individual arbitration.

The employees hoped that the courts would agree that the National Labor Relations Act guaranteed their right to collective action – in spite of any contract clauses to the contrary. The employers argued that the Federal Arbitration Act of 1925 protected their rights to enforce arbitration.

What Does this Decision Mean for Employees?

Employment lawyers believe that this ruling provides a decisive victory for large and small employers alike. It will not be surprising to see more employers move to implement binding arbitration contracts as a condition of employment to protect themselves against future class action lawsuits from their employees.

By forcing employees into individual arbitration over employment claims like wage and hour claims, employers can effectively eliminate large group actions against them. Employees with a complaint will have to challenge their employer alone and will have to decide whether the costs of filing a claim are worth the amount they could potentially recover.

Have a S.C. Workers’ Compensation Claim? Help is Available

Fortunately, this Supreme Court ruling should not affect your ability to pursue the individual workers’ compensation benefits you deserve in South Carolina if you get hurt or suffer illness on the job. Joye Law Firm was founded 50 years ago with the goal of providing aggressive, quality legal representation that could make a difference in the lives of people across South Carolina. If you have a workers’ compensation claim in South Carolina, our experienced lawyers are ready to put their skills and knowledge to work for you. Contact us today for a free consultation.

About the Author

Ken Harrell joined Joye Law Firm in 1994, and has been the managing partner since 2006. With 30 years of experience, he protects the rights of injured South Carolinians, including cases involving workers’ compensation, car accidents, and defective products. Ken also leads the firm’s referral practice, helping to ensure that our clients receive the best possible representation. He is a past president of South Carolina Injured Workers’ Advocates, and has served as the co-chairman of this organization’s legislative affairs committee for 12 years.

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