How Should Employers Handle Disputes With Their Employees

Should employers be allowed to insist that workplace disputes be handled in one-on-one arbitration, or should employees always have an option of bringing claims in collective actions?

In 2012 the National Labor Relations Board ruled that employees can go to federal court as a class under certain circumstances.

But a recent ruling by the Supreme Court states that employees who agreed to individual arbitration in employer disputes can’t waive that process to join class-action lawsuits.

The court’s decision affects as many as 25 million workers who are not unionized.  The ruling does not affect unionized workers.

This decision will allow corporations to avoid class-action lawsuits from consumers by enforcing contracts that call for individual arbitration.

In 1992 only 2.1 percent of non-unionized companies imposed mandatory arbitration agreements on their employees, but nearly 54 percent do now.

The court believes that as a matter of law the answer is clear. In the Federal Arbitration Act, Congress has instructed federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized proceedings.

Sources:
Epic Systems Corp. V. Lewis
Federal Arbitration Act (FAA)
National Labor Relations Board Ruling on Arbitration

By Bill Williams