Employers Hold the Power after Recent Supreme Court Decision

The U.S. Supreme Court’s recent 5-4 ruling in favor of an employer for its employment agreement that prevented class-action lawsuits but required individual arbitration instead, offers all employers shelter from future employee class-actions. This means that when a prospective employee signs their employment contract, they may be unable to bring an action in court and instead must face individual arbitration. In this particular case (NLRB v. Murphy Oil USA), an employee and her colleagues attempted to collect for uncompensated after-hours work. When they approached counsel to represent them in the matter, they were informed of the harsh reality that their employment contracts contained an arbitration agreement and prohibited class-action lawsuits.

The Supreme Court had previously ruled that companies can force consumers into similar arbitration agreements barring class-action suits, but has now extended it to encompass employees as well. The class-action lawsuit has long been a security blanket for employees who believe their employment rights have been violated by their employer. By forcing employees to individually pursue arbitration, rather than lawsuits as a collective group, it discourages them from pursuing damages altogether. This ruling is a significant victory for employers, who will now frequently include class-action waivers and arbitration agreements in their employee contracts. The attorneys at Rock Fusco & Connelly LLC can assist with the intricacies associated with these types of agreements.

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