U.S. Supreme Court Endorses Arbitration clauses in employment contracts

In a 5-4 vote, the Supreme Court ruled this week that companies can mandate that employees use arbitration clauses instead of class action litigation in attempting to resolve legal disputes over workplace issues. In effect, the Court ruled that employers and employees may have an employment agreement that compels workers to waive their right to pursue a class action. 
In doing so, the Court overturned a National Labor Relations Board (NLRB) ruling in which the NLRB had held that class action waivers of employment claims were illegal.  

The dispute began when many employees claimed unpaid wages. In response, the employer claimed that the employees must bring their claims under the arbitration system rather than pursuing the case in court. And that, per the arbitration agreement, the employees had to file their claims one by one, not as a group.

While arbitration clauses in employment contracts are a recent innovation, usage has grown quickly. Although exact numbers are not easy to come by, in the early 1990s, less than 4 percent of companies surveyed by the Government Accountability Office used mandatory arbitration for their employees. Today, many different organizations claim that more than half of private-sector non-union workers are subject to such a clause.  

A link to the Supreme Court case is here.

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