FOLLOW US

Legal Industry October 26, 2017 5 mins read

Employee Arbitration Clauses Face Supreme Court Challenge that Could Hurt Workers

Legal Industry ı By Godfrey Tencer

0 Comments

Supreme Court Challenge

Employment contracts are under fire from courts all over the United States, including the Supreme Court. Large employers and their employees are working together with agreements that include very different clauses regarding work-related claims. Historically, companies and their employees would get involved in collective work-related claims and sometimes in class actions. Now, employees are waiving these rights and working individually with employers through arbitration.

 

Disagreements in circuit courts

The circuit courts have been unable to come to an agreement about the enforceability of these employment contracts that include arbitration clauses. Three circuit courts decided they are enforceable and two decided they are not. Therefore, the Supreme Court has taken on the National Labor Relations Board v. Murphy Oil, USA, Inc. as well as a pair of cases that question these arbitration clauses. The cases also will look at which labor act has precedence: The National Labor Relations Act or the Federal Arbitration Act.

The cases are important for labor relations, especially if the Supreme Court decides the arbitration clauses are not in violation of either of the labor acts. If the clauses for individual arbitration are legal, then employees would be involved in employment disputes. But, if these individual arbitration clauses to violate labor acts, then employers can be sued collectively by employees.

 

Arbitration benefits employers

This court case has the eyes of big tech companies, especially those like Uber. If the individual arbitration clauses are found legal, then large companies like Uber can work one-on-one with employees rather than deal with costly class action suits. Employees can waive their rights to class action employment suits, which helps large companies. Uber is not the only company that asks its employees to sign away their rights to class action suits, in fact, Google does the same.

Both large tech companies, Google and Uber, are involved in potential legal issues that could become class action suits. Some drivers in California are looking to file a class-action case against Uber for violating employment laws regarding pay. Google also has a pending class-action suit regarding gender discrimination. Both companies are awaiting the outcome of the Supreme Court cases, as the employees involved in the cases signed the arbitration clauses, but want to file class-action suits. It the employees are forced to follow through the individual arbitration clauses, the tech giants would be able to work with the individual employees rather than the immense numbers involved in class-action situations.

If the Supreme Court rules in favor of the individual arbitration clauses, then the courts will no longer need to be involved in employment disputes. Individual arbitrators would handle suits between the employers and each employee. The Supreme Court will be deciding how much power employees have as a group and whether they can sue employers as a group. Consider the cost for employers when they should deal with large groups of employees - hundreds or thousands of them. Class action is easier for employees, too. So, consider the work for individual employees who are forced to arbitration against a well-prepared employer. The Supreme Court’s decision, especially if it is in favor of the businesses, could certainly affect working conditions for the foreseeable future. Employers could be more likely to violate labor laws because the consequences would be minimal. Employees would have very little recourse as the courts would be taken out of the equation.

 

Arbitration does not favor the employee

Arbitration is not in the best interest of the employees, but it is likely that the courts will rule in favor of employers. When employers and employees use arbitration, employees are at a disadvantage because the dispute is a private matter. Arbitration also limits the information that employees can use in the dispute, which puts them at a disadvantage against their powerful employers. They are also unable to appeal against unfavorable decisions.

 

Predicting the Supreme Court’s decision

With the move away from employee’s rights to organize, it is likely that the courts will rule in favor of companies and their desire to work through arbitration. The conservative majority that was reinstated when Neil Gorsuch was confirmed as a justice and conservatives tend to favor those who provide labor. Moving away from class-action suits is also on the side of the Department of Justice which moved to the employer’s side and moved away from the National Labor Relations Board - which governs the relations between the employer and employee. Many are predicting that the Federal Arbitration Act will become the rule of the land.

The Supreme Court could also address opt-out clauses, where employees have 30 days to opt out of arbitration, too. Uber uses opt-out clauses. These clauses complete strip any rights to organize against unfair labor practices. Unfortunately, employees sign these clauses and they do not know what they are doing. If the court leans toward employers over employees, these clauses could stand, too.

Previous Article

Las Vegas, Houston, California and Florida – How the Headlines Are Driving Generational Shifts in the Market

Read More
3 Posts

Godfrey Tencer

Godfrey Tencer is an attorney in San Rafael, California and an expert in real estate, employment law and general civil litigation. Tencer is a member of the Bar of the Supreme Court of the United States and the New York and California Bar Associations. Tencer was awarded his Juris Doctorate from Boston University.

Discussion

No comments yet. Be the first to join the discussion!

Don’t Miss It
America September 17, 2026
F-16 Crash in Michigan Triggers Evacuation, Pilot Ejects Safely
By – Rachel Moore
America September 17, 2026
Infineon $1.1B Memory Unit Sale Hands Winbond a Chip Legacy Reborn
By – Rachel Moore
America September 17, 2026
Morgan & Morgan $1B AI Investment Signals Arms Race in Injury Law
By – Tyler Brooks
Breaking News September 17, 2026
Fed Rate Hike Adds to Americans’ Cost-of-Living Squeeze
By – Michallie Harrison
America September 17, 2026
AI Safety Debate Turns to Synthetic…

Key Takeaways OpenAI’s Hugging Face breach has intensified questions over…

By – Samuel Lopez
America September 17, 2026
America’s Golden Dome Pushes U.S. Missile…

Key Facts The Space Force is developing low-Earth-orbit interceptors intended…

By – Samuel Lopez
America September 17, 2026
State Farm and Allstate File Plans…

Key Takeaways State Farm is proposing a limited return centered…

By – Samuel Lopez
America September 16, 2026
May Mobility and ACP SPAC Deal…

The autonomous vehicle technology company and blank-check firm ACP Holdings…

By – Tyler Brooks
America September 16, 2026
Fed Meeting Set to Deliver First…

Markets don’t always move in a straight line — sometimes…

By – Tyler Brooks
America September 16, 2026
Jeanie Poling Died at 67, Leaving…

Some musicians fill arenas; others fill something arguably harder to…

By – Tyler Brooks
America September 16, 2026
Jeanie Poling Died at 67, Leaving…

Some musicians fill arenas; others fill something arguably harder to…

By – Tyler Brooks
America September 16, 2026
Ed Sheeran Macklemore Fallout Sparks Mass…

A concert tour is supposed to build momentum night after…

By – Tyler Brooks
America September 16, 2026
NBC Helicopter Crash Shakes Los Angeles…

For decades, television news helicopters have hovered over Los Angeles…

By – Tyler Brooks
America September 16, 2026
Pentagon Admits Space Weapons Are Already…

Key Takeaways The U.S. has confirmed for the first time…

By – Samuel Lopez
America September 16, 2026
CLARITY Act Stalls In Senate As…

Key Takeaways Senate Democrats opposed advancing the CLARITY Act after…

By – Samuel Lopez
America September 15, 2026
NFP Acquires Minnesota’s Moores in Strategic…

Growth in the insurance world often looks less like a…

By – Tyler Brooks
And More September 14, 2026
Sydney Sweeney and Scooter Braun Celebrate…

Sydney Sweeney celebrated her 29th birthday with a public declaration…

By – Jackie Allen
America September 13, 2026
AI Whistleblowers:  Warnings  Coming From Inside…

AI Whistleblowers are increasingly sounding the alarm about the speed…

By – Jackie Allen
America September 13, 2026
Serena Williams’ Daughters Make History as…

Serena Williams has built one of the most decorated careers…

By – Jackie Allen
America September 13, 2026
KJ Biermann Faces Seven Felony Charges…

KJ Biermann, the 15-year-old son of “Real Housewives of Atlanta”…

By – Jackie Allen
America September 13, 2026
Team USA Reaches Women’s Basketball World…

BERLIN — Team USA advanced to the FIBA Women’s Basketball…

By – Jackie Allen
America September 13, 2026
In-House Attorneys’ Group Takes Rival to…

Key Takeaways The Association of Corporate Counsel has filed suit…

By – Samuel Lopez
America September 15, 2026
Oracle 6 AM Layoff Email Blindsides…

Most people wake up to alarms, coffee, maybe a weather…

By – Rihem Akkouche
America September 15, 2026
Massachusetts AG Joins 21-State Coalition Suing…

Key Takeaways Massachusetts Attorney General Andrea Campbell has joined attorneys…

By – Samuel Lopez
America September 15, 2026
Baldwin Insurance Group Goes Private in…

Key Takeaways Baldwin Insurance Group shares surged nearly 8% after…

By – Samuel Lopez
America September 15, 2026
Pentagon Breaks Decades of Silence, Confirms…

Key Takeaways Air Force Secretary Troy Meink has confirmed, for…

By – Samuel Lopez
America September 14, 2026
NASA Responds to Presidential Directive, Targeting…

Key Takeaways NASA is moving quickly to design a new…

By – Samuel Lopez
America September 14, 2026
ESA Scientists Can Now Predict Where…

Key Takeaways ESA’s NEO Coordination Centre has built a new…

By – Samuel Lopez
America September 14, 2026
TMZ Ties Itself to the Hayden…

Key Takeaways TMZ is reporting that law enforcement sources believe…

By – Samuel Lopez
America September 13, 2026
Bayer’s $7.25 Billion Roundup Settlement Faces…

Key Takeaways Bayer’s Monsanto unit will ask a Missouri judge…

By – Samuel Lopez
America September 13, 2026
Tylenol Maker and Pharmacy Chains Ask…

By Samuel López | USA Herald Tylenol maker Kenvue and…

By – Samuel Lopez
America September 13, 2026
Lawyers Are Getting Burned by AI…

Key Takeaways Courts across the country have been sanctioning lawyers…

By – Samuel Lopez
America September 10, 2026
41% of Lawyers Say Legal Careers…

Key Takeaways More than 41% of surveyed lawyers say the…

By – Samuel Lopez
America September 10, 2026
Anthropic Says It Caught Scientists Trying…

Key Takeaways Anthropic’s newest threat intelligence report details five case…

By – Samuel Lopez
America September 11, 2026
Bears and RB Swift $33.75M Extension…

Sometimes the best deals get done before the clock even…

By – Tyler Brooks
America September 11, 2026
Skywatchers: Moonshadow Creates Dramatic Blood Moon…

A Moonshadow transformed the night sky Aug. 27 as the…

By – Jackie Allen
America September 6, 2026
Travis Kelce-Backed Club Car Wash Faces…

By Samuel López | USA Herald A fast-growing car wash…

By – Samuel Lopez
America September 6, 2026
‘DWTS’ Gleb Savchenko Lists $1.4 Million…

By Samuel López | USA Herald Factual Background Gleb Savchenko…

By – Samuel Lopez
America September 4, 2026
Trump Calls Tiger Woods DUI Plea…

In This Report Tiger Woods accepted reduced charges and surrendered…

By – Samuel Lopez
America September 2, 2026
Clippers Fined $30M as NBA Drops…

A year-long investigation just landed on the Los Angeles Clippers…

By – Rihem Akkouche

No posts found.

No posts found.

Signup for the USA Herald
exclusive Newsletter