Locking the Courthouse Doors on Workers Wage Claims. Supreme Court Hands Employers the Keys.

The courthouse doors are closing on employees’ right to file overtime pay lawsuits (and all other types of claims) in an actual court in front of a real judge. The Supreme Court has recently given the green light and employers are rushing to implement mandatory arbitration policies that force workers into private arbitration run by paid arbitrators and out of their right to bring claims as a group or class action.  

Why are workers having to sign away their right to a day in court?  

Because employers know that forcing employees to file individual claims in private arbitration will deter many workers’ claims for unpaid wages…even if their claims are valid and the employer has clearly violated the law.  As Justice Ruth Bader Ginsburg noted in her dissent, “The inevitable result [of forcing individual arbitration]…will be the under-enforcement…” of the laws designed to protect American workers’ right to receive fair wages.

Specifically, the court held that the National Labor Relations Act, which guarantees employees’ rights to collectively organize and act as a coordinated group, does not prevent the enforcement of an employment agreement that includes a provision requiring workers to give up the right to go to court and/or join together with other similar workers in any employment disputes.  

The big problem is that arbitration and court are not the same for workers

What’s so bad about individual arbitration?  

For employees forced to individually arbitrate, the challenge will often be economics in that the amount of back pay owed to one person may not be worth the time and effort required. This is the exact reason the federal and state overtime laws allow cases to be filed as a class or collective action. Proceeding in a court as a class action gives workers the benefit of pooling resources and economies of scale as well as the strength in numbers that makes the case a “big enough deal” for an employer to take seriously. The ability to hire a lawyer who will handle overtime pay cases on a contingent fee (only paid if the case is successful) basis is also impacted, however, some firms are already prepared to continue fighting.   

For employers, they should be careful what they ask for. The costs and burdens associated in dealing with a large number of individual claims can outweigh the perceived benefits and end up making the process much less efficient. Lawyers who represent workers in overtime pay lawsuits have already begun forcing employers to swallow their own medicine by filing hundreds of individual arbitrations based on the same illegal pay practice (e.g. paying hourly straight time for overtime). This forces employers to pay separate arbitration fees for every case and deal with the same issues over and over again – very inefficiently and costly given the hourly rates they have to pay defense lawyers. When companies then ask to change the rules and allow for some type of class or collective treatment, the answer is almost always NO…you chose the rules, now abide by them and suffer the consequences.

Many workers have no idea that they are signing away their right to a day in court

What can workers do to protect their workplace rights and access to justice?

First, employees need to know what their rights are, which is not always easy, particularly in such niche areas as overtime pay, benefits, meal and rest breaks, and the like where employees are typically relying on information provided by company HR or their boss. Employees need to make sure they are getting accurate and unbiased information – not relying entirely on what the company’s position or policy is, particularly when the truth is workers are being cheated out of pay. Second, American workers need to make Congress fix the law through bills like the Arbitration Fairness Act . Sending a loud and clear message to Washington that companies shouldn’t be able to break the law and rip-off employees without consequence, and then send lawsuits to secret arbitration where the deck is stacked against working people.

Act now if you are not yet subject to mandatory arbitration – before the courthouse doors slam shut.  Contact the experts at The Lore Law Firm for a free and confidential review of your particular situation. Call 1-866-559-0400 or submit your information using our convenient Case Evaluation form.

Fill out our quick case evaluation form for a free and confidential review of your situation.