Arbitration, Concerted Action, and the Gig Economy

Those who follow the arbitration wars probably know that the upcoming Supreme Court term will kick off with an epic battle in those wars–literally. The first argument on the first Monday in October will be in the consolidated cases of Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and NLRB v. Murphy Oil Corp.. The cases together pose the question whether the federal labor laws' protection of the right of workers to engage in concerted action can be overridden by an arbitration agreement that prohibits concerted action by barring workers from joining together in any way in litigating their claims.

The National Labor Relations Board (NLRB) has held that arbitration agreements that purport to require workers to arbitrate all claims individually rather than jointly or collectively violate the right to engage in concerted action. After supporting the NLRB's position last year in asking the Supreme Court to decide the issue, the Office of the Solicitor General has switched sides and plans to argue in support of employers who engage in what the NLRB views as an unfair labor practice, leaving the NLRB's position to be presented by its in-house attorneys, as well as by attorneys representing individual workers who seek to bring claims against their employers on a collective basis.

The cases aren't consumer cases per se, but they pose important questions about whether the Federal Arbitration Act (FAA) can be read to require enforcement even of provisions in arbitration clauses that abridge rights explicitly granted by other federal statutes. The position of the employers, now adopted by the Acting Solicitor General, is that the FAA supersedes rights granted by other federal laws unless they expressly say that they supersede the FAA.

Both sides have the support of piles of amicus curiae briefs. One of the most interesting, and unexpected, entries in the list is a brief filed by Susan Fowler, the former Uber engineer who blew the whistle on what she described as the culture of sexism within the company. Fowler's brief describes the use of arbitration agreements requiring purely individual dispute resolution as a means by which companies disempower workers in the gig economy by preventing them from engaging in what has become the primary means of concerted activity for 21st century workers in light of the decline of unions: class action litigation followed by settlement negotiations that substitute for collective bargaining over the terms and conditions of employment.

The Fowler brief is interesting reading, as are many of the other briefs filed in the cases. The case bears watching, to say the least.


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