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‘Unchecked Corporate Power’ – Majority of Workers To Lose Right to Sue Employers

A pro-union rally in response to union issues in Wisconsin. March 15, 2011. (Photo: Fibonacci Blue)
A pro-union rally in response to union issues in Wisconsin. March 15, 2011. (Photo: Fibonacci Blue)

“Surging corporate use of forced arbitration has already blocked over half of private-sector nonunion employees from suing when they experience discrimination, harassment, or wage theft.”

One year ago the Supreme Court dealt a major blow to workers’ rights in Epic Systems v. Lewis and now a new report confirms the devastating impact the Court’s decision will have on an employee’s ability to settle workplace disputes.

Epic Systems consolidated three labor cases and dealt with whether employers can use employment contracts to force workers, as a condition of hiring, into waiving their right to class action lawsuits and force workers into individual arbitration.

In a 5-4 decision, the Supreme Court ruled in favor of employers and found that forcing employees to sign individual arbitration clauses as a condition are legal and enforceable under the Federal Arbitration Act and the National Labor Relations Act. The decision was felt as a huge blow to workers advocacy groups.

“Congress must act to overturn the Supreme Court’s deeply flawed Epic Systems v. Lewis decision, which makes it nearly impossible for millions of workers to get justice when their employers violate fundamental workplace protections,” said Celine McNicholas, Director of Government Affairs at the Economic Policy Institute, in a press release.

“These laws were passed to ensure that workers in this country have the basic rights to fair pay and a safe workplace free from discrimination—Congress cannot allow a Supreme Court dominated by corporate interests to take them away. We must demand that our representatives restore our rights and pass the Restoring Justice for Workers Act and the Forced Arbitration Injustice Repeal Act,” McNicholas added.

Unchecked Corporate Power

Now a new report released Tuesday and titled “Unchecked Corporate Power: Forced Arbitration, the Enforcement Crisis, and How Workers Are Fighting Back,” found that the Epic Systems decision has lead to the proliferation of the use of forced individual arbitration clauses.

The report by the Center for Popular Democracy (CPD) and the Economic Policy Institute (EPI) forecasts that by 2024, more than 80 percent of private-sector, nonunion workers will be covered by forced arbitration clauses.

The report stated:

The right to be paid a livable minimum wage, to take meal and rest breaks, to safe workplaces, and to equal earning and promotion opportunities regardless of race, gender, ethnicity, or other social category—all of these important rights are at risk of being hollowed out by underenforcement…

In forced arbitration, a company requires a worker or consumer to waive their right to sue in court; instead, disputes must be resolved by a private arbitrator. Surging corporate use of forced arbitration has already blocked over half of private-sector nonunion employees from suing when they experience discrimination, harassment, or wage theft, leaving private arbitration—a secretive, biased, and expensive alternative—as their only option. The Supreme Court’s 2018 decision in Epic Systems v. Lewis worsened this trend. The court held that employers can require employees to give up their right to sue on both an individual or collective basis— denying workers the right to band together to seek justice and allowing employers to force all disputes into individual arbitration. We anticipate a surge in corporate use of forced arbitration following Epic Systems. Our analysis shows that by 2024, more than 80 percent of private sector nonunion workers will be blocked from court by forced arbitration clauses with class- and collective-action waivers. Soon, the vast majority of workers will have signed away their right to go to court or to join with their coworkers to vindicate their workplace rights.

Other key findings from the report included:

  • The number of covered workers per federal wage-and-hour investigator and health and safety officer has more than doubled since 1994, to over 170,000 workers for each agency staffer.
  • In six states profiled in the report, the number of workers per investigator range from 54,900 to 188,800.

In an effort to override Epic Systems, the report called for Congress to pass the Restoring Justice for Workers Act and the Forced Arbitration Repeal Act. The report also advocated for the passing of “whistleblower enforcement laws” which protect whistleblowers and “empower workers to sue law-breaking employers on behalf of the state and all injured workers, including those covered by arbitration clauses.”

“By enacting these policies, state leaders can directly address the current crisis in corporate accountability and ensure that minimum wage, fair scheduling, and other workplace protections are enforced,” said Rachel Deutsch, Supervising Attorney for Worker Justice at CPD, in a press release.

“Through the courage of workers demanding change, and the leadership of their elected representatives, we can restore access to courts, empower workers to hold lawbreaking employers accountable, and make hard-won workplace standards meaningful to families across the country.”

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Lauren von Bernuth

Lauren is one of the co-founders of Citizen Truth. She graduated with a degree in Political Economy from Tulane University. She spent the following years backpacking around the world and starting a green business in the health and wellness industry. She found her way back to politics and discovered a passion for journalism dedicated to finding the truth.

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