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Article

21 May 2018

Author:
Andrew Hanna, Josh Gerstein, Politico (USA)

Supreme Court rules employers can ban class action lawsuits in arbitration

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The Supreme Court, dealing a potential blow to the #MeToo movement against sexual harassment, ruled that employers can require as a condition of employment that workers waive their rights to participate in class action lawsuits.  In a 5-4 ruling on a trio of cases penned by Justice Neil Gorsuch, the court’s Republican majority sided with businesses whose employment contracts include mandatory arbitration clauses that prevent class action lawsuits.  Instead, workers who take to the courts against an employer must do so as individuals...Monday's ruling could strengthen legal arguments that employment contracts that impose mandatory arbitration on complaints of any kind do not violate constitutional rights...[T]he ruling largely closes off as a future option for the #MeToo movement collective legal action against a business where sexual harassment is common...Mandatory arbitration has become a common feature in employment contracts as union power has declined and businesses have sought to reduce their legal exposure.  Studies have shown that workers win far less often in mandatory arbitration than in court...[S]ince most arbitration is conducted in secret, mandatory arbitration has helped businesses avoid unfavorable publicity that might compel them to address chronic worker abuses...Labor advocates warned during oral arguments...the ruling would destroy incentives for investigating violations of labor law...