Supreme Court Watch .
On the first Monday of October 2017, the Supreme Court began a new term. This is the sixth in a series designed to focus on decisions of the Court in this new term that might have an impact on the Eastern Shore.
In 2008, Sheila Hobson began working at a Murphy Oil gas station in Celera, Alabama. Murphy Oil operates more than 1,000 gas stations in 21 states. In the course of her work Sheila learned that Murphy Oil employees were required to perform a variety of tasks, such as cleaning the store, stocking the shelves and unloading merchandise from trucks, while “off the clock,” i.e., without any additional hourly compensation or recognition of those hours for purposes of determining overtime.
Sheila and some of her co-workers went to court in an effort to recoup compensation they believed was due them and others similarly situated. Murphy Oil defended based upon an agreement Sheila and all other employees were required to sign as a condition of employment. The agreement stated that the resolution of all claims relating in any manner to employment were to be “by binding arbitration.” Moreover, all employees waived their right to be a part of any claim in court or in arbitration with any other employee. On the basis of that agreement, the court dismissed the case.
On appeal, the legitimacy of the Murphy Oil employment agreement and that of similar agreements by two other employers reached the Supreme Court. The three consolidated cases were argued before the Court on the first day of the new 2017 Term and on Monday, May 21, 2018, the Court announced its decision. By a vote of 5-4, in a majority opinion written by the Court’s newest Justice, Neil Gorsuch, the Court determined that both the arbitration requirement and the waiver of any collaborative employee claims were enforceable.
Resolution of the issue was dependent upon the Supreme Court’s interpretation of two different federal laws. The first was the 1925 Federal Arbitration Act (FAA), which provides that an agreement to arbitrate a dispute “shall be valid, irrevocable, and enforceable.” The second is the National Labor Relations Act (NLRA), passed ten years later, which gives workers the right to join unions and to “engage in other concerted activities” for “mutual aid and protection.” The employees in these consolidated cases argued that these rights were violated by the arbitration agreements they were forced to sign.
The Court’s majority concluded that by the FAA, Congress required courts to enforce agreements to arbitrate and specifically directed them to respect the parties’ chosen arbitration procedures. The NLRA language allowing concerted activity for the purpose of “mutual aid or protection” was, in the opinion of the majority, intended only to embrace activity arising out of forming unions and engaging in collective bargaining, “things employees do for themselves.”
Justice Ruth Bader Ginsburg, writing for the dissenting justices, observed that in earlier times workers often had to accept employment on whatever terms employers dictated but that Congress had corrected this “imbalance” by enacting the NLRA and other labor laws. The chief federal labor agency and the federal courts, she contended, have long understood “concerted activities for the purpose of mutual aid and protection” to include joint legal proceedings involving the terms and conditions of their employment. The dissenters read the history of the FAA as more limited in scope, simply designed to give merchants a speedy and economical means of resolving commercial disputes. Characterizing the majority’s conclusions as “egregiously wrong,” Justice Ginsburg lamented the likely result of the Court’s decision: the inability of vulnerable workers to bring common wage and hour claims because “the expenses entailed in mounting individual —one by one—claims will often far outweigh potential recoveries.”
Unless Congress should move to amend these laws as now interpreted by the Supreme Court, one clear result of this Court decision is that more and more employers will utilize this type of agreement as a condition of employment. This leaves Sheila Hobson and other workers with wage and hour disputes no recourse but to separately arbitrate each of their claims. As Justice Ginsburg asserts, especially for low income workers, the size of these individual claims frequently does not justify the time and expense of proceeding individually, and employees filing alone often fear employer retaliation whether real in fact or not.
Common Sense for the Eastern Shore
