As mandatory arbitration clauses become commonplace in employment contracts, the US Supreme Court ruled that such clauses and waiving of the right to a trial and to class action suits does not contradict federal labor law. We talk to Bill Fletcher, Jr. about the consequences of this decision
SHARMINI PERIES: It’s the Real News Network. I’m Sharmini Peries, coming to you from Baltimore.
The U.S. Supreme Court ruled in favor of corporations and employers last Monday, and against workers, when it ruled in a 5-4 decision that employment contracts with mandatory arbitration are legal under federal law, and that workers cannot resort to class action lawsuits to challenge their employers. This is a major blow to workers across the U.S., since an estimated 25-30 million employment contracts in non-unionized workplaces include such mandatory arbitration clauses. This decision erodes collective power and class action lawsuits. The Supreme Court’s four liberal judges dissented from the decision. Judge Ruth Bader Ginsburg in particular wrote a dissenting statement, saying that this decision is egregiously wrong and that individual claims of lost wages, for example, are scarcely of a size warranting the expense of seeking redress alone.
Joining me now to discuss the implications of this decision is Bill Fletcher, Jr. Bill is co-founder of the Center for Labor Renewal, and a columnist and a long-time activist. His most recent book is “They Are Bankrupting Us, And 20 Other Myths About Unions,” by Beacon Press. I thank you so much for joining us today, Bill.
BILL FLETCHER JR: It’s a pleasure.
SHARMINI PERIES: Bill, The decision won by the conservative members of the Court who ruled in favor of pro-business in a 5-4 vote. Tell us what is at stake, and what exactly happened.
BILL FLETCHER JR: What’s at stake is most consumers have become, or are becoming, familiar with the idea of mandatory arbitration. You see this in many companies, that if you have a complaint or a problem, there’s a small language, small lettering, and you waive your right to a trial, and that the matter will be handled through arbitration. The idea is that the arbitration is supposed to be less expensive and quicker. The problem is, and this is the same thing that workers face in the workplace, when they are told that they have to arbitrate a claim, basically- and not engage in a lawsuit and class action, they’re basically being told that their situation has to be handled in isolation, even if there is a systemic problem.
The value of class actions is the, is that you’re getting at systemic problems that exist in any kind of institution. When you have one-on-one litigation, or you have an arbitration with an individual, the assumption is that there’s a very particular problem that is unique to that individual, and that that can be settled. But it doesn’t necessarily have any implications for the rest of the workforce. And therein lies the problem, because many of the wage and hour issues that are going, on and other matters that are governed by statute, in fact are systemic. They affect the entire workforce.
So the court is basically siding with the companies. Not basically. They’re siding with the companies. And they’re saying it’s no big thing. These matters, the aim of this entire matter, was to expedite issues and cut down costs, and no one is losing any rights. Workers are, in fact, losing rights here. And one example is, of why this becomes very important, is, it could be found in minor league baseball, where there’s been an ongoing wage and hour dispute for current and former members of minor league baseball, and there was there was an attempt at a class action. In the absence of a class action you’ll have one, two, three, four, five, six, whatever individual cases. This could go on for an eternity.
SHARMINI PERIES: Bill, let’s take an example of a workplace situation, like, say, lost wages, and unpack what this means, this decision means in such a case. .
BILL FLETCHER JR: OK. So let me work, work backwards. People that have violations of sex discrimination, race discrimination, are still entitled to file Title 7 claims. Although over the years the court has become less and less friendly to class action lawsuits on these, and disparate, what are called disparate impact cases, cases where you don’t necessarily have to prove intent. But in wage and hour cases, essentially what the court is saying is that if-. Let’s say that there are 10 workers in a workplace, and they are each having wage and hour disputes with their employer. That instead of them coming together and saying we want to file an action against this employer, each of these cases have to be separately arbitrated. Now, that means that there could be, out of 10 cases, there could be 10 very different settlements. And the settlements may not get at the systemic problem that exists in that company. And therein lies the problem, Sharmini. What you want is you want to establish fair practices in any company.
Now, as a trade union activist, I would say ultimately what this is-. And quite ironically, is that what the court is saying is that the only real solution for workers is to unionize. That the legal, the legal route, or the route of litigation, is largely gone. And so for collective, systemic change, workers are going to need to come together and form unions. That’s the implication of this. And, and on one end that’s not a bad implication. We need to build the unions. But that’s not the way we wanted to build them, where people are losing their rights. But we’re seeing one thing that’s very important, and what good trade unionists always point out, which is that in the absence of a collective bargaining agreement the problem that non-union workers face is that they are subject to changes in law, and they’re subject to the whims of the employer.
SHARMINI PERIES: All right, Bill. I guess the ultimate question here is what can be done about it? I mean we had the opportunity, when so many trade unions supported the Obama campaign, when he promised to deliver on EFCA. But we never got EFCA, and now we have this really aggressive Supreme Court decision that Ginsburg has objected to, but she’s just one Supreme Court judge. Where can this kind of decision go? Is there a possibility of a reversal under better circumstances?
BILL FLETCHER JR: Well, there’s two points there. The Employee Free Choice Act was lost, in my humble opinion, because fundamentally, the union movement did not turn it into a mass movement. It was instead relying on Obama and the Senate Democrats to do something, and they were not without pressure. That would have been true in reverse. You look at what happens in the Republican side of things. And so the unions blew it by not connecting the economic crisis that we were going through and the need for unionization.
And so I think we have to look in the mirror and do a little bit of self criticism. But the other part of the answer is this: I don’t think that the situation is any way hopeless, but this is absolutely a setback, because it is further restricting the rights of workers in an environment, a non-union environment which is totalitarian. The non-union workplace is a totalitarian environment where workers lose most of their rights. Now we don’t think about it like that, most of us. I think that there’s some sort of denial that we go through around that. But that’s actually what it is. It’s a totalitarian environment. And I think what the Supreme Court has done is to remind us that that’s the case.
Can this be reversed? Yes, it can be reversed. It could be a change in law. They could, the Congress could pass legislation that reversed this. Would this Congress do that? No. No, they won’t. There’ll have to be a change in Congress. But congressional action could, could absolutely turn this around.
SHARMINI PERIES: All right, Bill. I hope we have you back to continue this discussion, because people really need some strategies to take up issues like this in their workplaces, and of course in their unions, if they have one. And I thank you for joining us for now.
BILL FLETCHER JR: My pleasure. Thank you very much.
SHARMINI PERIES: And thank you for joining us here on the Real News Network.