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
High Profile Court Cases September 13, 2026
CIA Gold Bar Case Nears Plea Deal Amid Classified Evidence
By – Michallie Harrison
International September 12, 2026
Saudi Pipeline Shutdown Threatens a Deeper…

Saudi Arabia announced a precautionary halt to its East-West Pipeline…

By – Michallie Harrison
America September 12, 2026
Duke University Ends Reginaldo Howard Scholarship…

DURHAM, N.C. — Duke University has discontinued a decades-old merit…

By – Jackie Allen
America September 12, 2026
Bali Tourist Deported and Banned for…

A Bali vacation ended with an Australian tourist being deported…

By – Jackie Allen
America September 11, 2026
$LAPTOP Meme Coin Crashes After Hunter…

Hunter Biden’s $LAPTOP cryptocurrency suffered a dramatic collapse shortly after…

By – Jackie Allen
America September 11, 2026
Open Secure AI Alliance Forms as…

The Open Secure AI Alliance has brought together a broad…

By – Jackie Allen
America September 11, 2026
Silverthorne Bomb Threat Triggers Evacuations, School…

A routine Friday afternoon in the mountain town of Silverthorne,…

By – Rihem Akkouche
America September 11, 2026
Silverthorne Bomb Threat Triggers Evacuations, School…

A routine Friday afternoon in the mountain town of Silverthorne,…

By – Rihem Akkouche
America September 11, 2026
Arrow Bank to Acquire Skene Valley…

Some businesses grow by chasing new markets far from where…

By – Rihem Akkouche
America September 11, 2026
Tenet Health 1,500 Layoffs Ripple Across…

Job losses rarely arrive in isolation — they tend to…

By – Rihem Akkouche
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
New Mexico Atty $5K Fine Follows…

Courtrooms run on facts, testimony and citations that can withstand…

By – Tyler Brooks
America September 11, 2026
Ryan Ryan $60M Malpractice Lawsuit Accuses…

Sometimes the most expensive mistake isn’t what a lawyer says…

By – Tyler Brooks
America September 11, 2026
Skywatcher: ExoMoon Discovery May Reveal First…

An ExoMoon discovery may have given astronomers their first confirmed…

By – Jackie Allen
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 10, 2026
Flock Safety Cracks Down on Police…

Flock Safety is introducing mandatory safeguards for its automated license-plate…

By – Jackie Allen
America September 10, 2026
OpenAI Cybersecurity Under Scrutiny After AI…

OpenAI cybersecurity concerns are growing after researchers reported that a…

By – Jackie Allen
America September 9, 2026
To Catch a Predator: Robert Pattinson…

The phrase Catch a Predator became synonymous with one of…

By – Jackie Allen
America September 8, 2026
Trump-a-Palooza: Republicans Put Trump at Center…

DALLAS — Trump-a-Palooza is bringing Republicans from across the country…

By – Jackie Allen
America September 11, 2026
Mexican Food Company Announces California Layoffs…

Key Takeaways Ruiz Foods is cutting 176 jobs at its…

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
Trump Promises $5,000 Dividend Checks if…

By Samuel López | USA Herald DALLAS — President Donald…

By – Samuel Lopez
America September 10, 2026
Hawaii Couple Sentenced to Prison After…

Key Takeaways Scott Hawver received 16 months in prison, and…

By – Samuel Lopez
America September 10, 2026
Massachusetts Judge Publicly Reprimanded Over 2018…

Key Takeaways The Massachusetts Supreme Judicial Court publicly reprimanded Judge…

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 10, 2026
Anthropic Says It Caught Scientists Trying…

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

By – Samuel Lopez
America September 10, 2026
Wrongful Death Lawsuit Against Energy Drink…

Key takeaways The latest reported order paused the family’s lawsuit…

By – Samuel Lopez
America September 9, 2026
Ambient AI Could Be the Next…

Key Takeaways Ambient AI can turn conversations into draft records,…

By – Samuel Lopez
America September 5, 2026
Georgian National Indicted in Money Laundering…

By Samuel López | USA Herald A federal grand jury…

By – Samuel Lopez
America September 1, 2026
DOJ Drops Hammer On Kansas School…

By Samuel López | USA Herald The U.S. Department of…

By – Samuel Lopez
America August 28, 2026
CVS Ordered to Answer for AI-Fueled…

Case at a Glance A Manhattan federal judge has ruled…

By – Samuel Lopez
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
America August 26, 2026
Tupac Shakur Murder Trial Moves to…

The Tupac Shakur murder trial will resume Thursday in Las…

By – Jackie Allen
America August 21, 2026
World Cup Brawl Leads to Major…

EAST RUTHERFORD, N.J. — The World Cup final between Spain…

By – Jackie Allen

No posts found.

No posts found.

Signup for the USA Herald
exclusive Newsletter