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The Supreme Court could make it harder for workers to sue over issues like sexual harassment and pay discrimination

Key Points
  • It has gotten harder for American workers to bring lawsuits against their employers in recent years. It could get harder still.
  • The Supreme Court will rule on a number of cases this term over whether workers can bring disputes against their employers in a court of law or if they will have to submit to arbitration behind closed doors.
  • The U.S. Chamber of Commerce, a conservative business group that spent more money on lobbying this cycle than any other organization in the country, has filed briefs in each of the cases, calling on the court to side in favor of forced arbitration.
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It has gotten harder for American workers to bring lawsuits against their employers in recent years. It could get harder still.

The Supreme Court will rule on a number of cases this term over whether workers can bring disputes against their employers in a court of law or if they will have to submit to arbitration behind closed doors.

Arbitration proceedings are generally favored by employers because they can be more efficient and save money. Labor advocates say arbitration tilts in favor of big business and shields employers from having to make public embarrassing information about hostile work environments and pay disparities.

It sounds technical, but the difference between a court hearing and an arbitration matters. The average arbitration can be completed in six months, versus multiple years for a federal jury trial, according to Julianna Thomas McCabe, who heads the national class-action practice group at the law firm Carlton Fields.

More than half of nonunion private-sector employers now use mandatory arbitration procedures — and the rate is even higher as the size of the business increases.

"The major driving force behind arbitration agreements is an effort to reduce the cost of litigation, and particularly with class actions," said Lauren Novak, who specializes in labor and employment issues and is a partner at the law firm Schiff Hardin.

In three cases, including two set for argument on Monday, the justices will decide when exactly employees can be forced into arbitration. Having three cases on the docket suggests "the court is extremely interested in this issue," McCabe said.

The cases are being closely watched by big business as well as worker advocates. The U.S. Chamber of Commerce, a conservative business group that spent more money on lobbying this cycle than any other organization in the country, has filed briefs in each of the cases calling on the court to side in favor of forced arbitration.

Observers largely expect that business will continue its string of victories at the court, given the deference the justices under Chief Justice John Roberts have shown toward employers. In a particularly dramatic illustration in May, the court handed down a landmark 5-4 ruling deciding that employers can force workers to sign agreements compelling them to handle disputes through arbitration.

Possible obstacles to class-action cases

The court, doing away with a formula from the National Labor Relations Board, ruled that the agreements could force workers to arbitrate the cases as individuals rather than as groups. That made some bread-and-butter class-action cases — disputes over gender pay disparity and harassment, for instance — much harder to bring.

"The court's decisions have slowly built a wall that prevents a lot of individuals from ever getting to court, and employers have noticed that," said Emily Martin, vice president for education and workplace justice at the National Women's Law Center.

She noted that in cases about pay or harassment, it can be daunting to make a case as an individual — much less muster the funds for an attorney.

"If you feel like you are the only one, you are much less likely to come forward and say, I deserve better, you can't treat me like this," she said.

With arbitration, "you are protecting serial predators," said Kelly Dermody, who frequently represents women in discrimination class actions and is chair of the law firm Lieff Cabraser's employment practice group.

"There is no public record that a person has had more than one allegation of harassment against them, maybe many more," she said. "In many instances, you make it economically irrational for an employee to bring a harassment claim, so you basically can't enforce that entire issue of civil rights law."

In one of the cases to be argued Monday, Lamps Plus Inc. v. Varela, No. 17-988, the court is returning to the issue of class actions.

In that dispute, the court will hear from Frank Varela, who says he is entitled to bring a class-action arbitration case against his employer, Lamps Plus, because his arbitration agreement does not expressly forbid it.

For business, the case is "critical," according to Novak. That's because, if the court rules in favor of Varela, employers would be "likely to lose the economic benefit of the arbitration that they've contracted for," and that the court largely protected earlier this year, she said.

'Poster child' for the benefits of arbitration

Also Monday, the court will hear Henry Schein Inc. v. Archer and White Sales Inc., No. 17-1272. The case concerns a complicated and heavily litigated area of the law and is about who gets to decide if an issue should be arbitrated, a court or an arbitrator.

To McCabe, the case is the "poster child" for the benefits of arbitration. She pointed out that it took a lower court three years to reach a decision on the preliminary issue. Now the case is being heard by the Supreme Court.

Had it been arbitrated, the issue likely would have been resolved years ago. A fair arbitration, she said, is better and faster for both sides.

Not all the cases on the docket looked poised to favor arbitration. Earlier this month, the justices heard an arbitration case largely limited to truckers that is widely expected to swing the other way.

It is not always reliable to predict how the justices will vote based on their questions at oral argument, but comments from some of the court's conservatives, including Roberts and Justice Neil Gorsuch, gave lawyers for Dominic Oliveira, the long-haul truck driver who brought the suit, reason to hope.

"I don't mean to celebrate a touchdown at midfield, but if things work out, I think it will be an important victory for a couple million truck drivers," said Paul Bland, executive director of the watchdog organization Public Justice, which represented Oliveira before the court.

Opponents of arbitration expect that the court will continue to entrench its pro-business rulings this term and in coming years. But some point to other avenues that could force change, such as Congress, or pressure from consumers.

In May, facing down a number of scandals, Uber did away with forced arbitration for sexual harassment cases. Rival Lyft followed shortly thereafter. Microsoft scrapped its mandatory arbitration for sexual harassment cases in December 2017, and endorsed legislation sponsored by Sens. Kirsten Gillibrand, D-N.Y., and Lindsey Graham, R-S.C., that would void forced arbitration agreements in those disputes nationwide.

"I think before the law catches up, the culture is going to catch up," Dermody said. "We will as a culture lead the courts back to something that's much more sensible."

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