Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.
Free speech in the workplace has been discussed heatedly in the wake of the cancellation of “Roseanne”and a new rule prohibiting NFL players from kneeling during the national anthem. Parties on both sides in the culutrue war have argued that employees don’t have freedom of the speech on the job. While that is generally true, the National Labor Relations Act gives employees some rights of speech and associationon the job. But a recent Supreme Court case could have paired back those rights.
In Epic Systems v. Lewis the United States Supreme court held in a 5-4 decision that neither the National Labor Relations Act nor the savings clause of the Federal Arbitration Act prevents enforcement of arbitration clauses that preclude class or collective actions against employers by their employees.
As many commentators and the dissent pointed out, the Epic decision will make it more difficult for workers to band together to address wage and hour violations. Individually, even with attorney fees available, it is not economical for employees to pursue individual cases of wage theft if those individual cases amount to a relatively small amount. An example of such a case were the so-called “donning and doffing” cases pursued against various meat packing plants in the Midwest.
Employers have won some major victories in the area of wage and hour law this Supreme Court term. Epic follows on the heels of a decision making it easier for employers to prove they are exempt from the overtime provisions of the Fair Labor Standards Act
But Epic could impact labor and employment law beyond just wage and hour law. Here are a few ways Epic could impact more than just wage and hour law. This list is not inclusive and Epic is probably worth more discussion, but I wanted to discuss the broader implications of this case and bring up lesser discussed but important implications of this case.
What is a protected concerted activity?
The National Labor Relations Act protects protected concerted activity for the mutual aid of co-workers that goes to the terms and conditions of employment. The employees argued that participating in a collective action case under the Fair Labor Standards Act. Justice Neil Gorsuch, writing for the five Justice majority, disagreed. Gorsuch wrote that the NLRA only covered activities that employees do for themselves, not class action litigation. What concerned me more, was Gorsuch’s use of a “canon”of statutory construction to hold that seemingly broad language in the NLRA about it employees being able to engage in collective activity for “mutual aid and protection” only applied to forming labor unions and other activities related to formal collective bargaining.
This conclusion concerned me because I have long advocated for non-unionized employees to engage in collective self-help on the job to address issues like bullying or even accommodation of a disability. But, as the dissent points out, association rights on the job are also protected by the Norris-LaGuardia Act (NLGA) NLGA expressly provides for a right to self-organization among employees. Though the Epic court rejected NLGA as a basis for overcoming an arbitration clause, it’s broader language could still be the basis for workplace speech and assocation rights than a paired down NLRA.
That Norris-LaGuardia would serve as backstop for employee association rights would assume the Roberts/Gorsuch court is merely following some rules of statutory construction rather than imposing their own economic preferences into the law. That might not be a fair assumption. The Federal Arbitration Act explicitly excludes employment contracts from coverage. In 2001, the Supreme Court limited that exclusion from workers in the transportation industry. Epic would appear to further limit that exclusion in contradiction to plain and clear statutory language to the contrary.
Can Epic be made to benefit workers?
Epic may benefit some employees. One impetus behind using arbitration clauses to prevent class action claims is to defeat class action claims on retirement plans under ERISA. However ERISA also governs short-term and long- term disability policies. Currently, short-term and long-term disability policies very difficult to win because courts defer to insurers on how the plans are interpreted. Some employee-benefit attorneys believe that employees will have a better chance of disability claims in arbitration. Union-side labor lawyer, Moshe Marvit has also speculated that Epic might make it easier for employees to form unions.
Many management-side attorneys are also skeptical of arbitration which could also prevent employers from adopting arbitration clauses.
So how is it that the Supreme Court can ignore seemingly plain language about the Federal Arbitration Act not applying to employment disputes? The Circuit City decision from 2001, provides one clue. In Circuit City the Supreme Court used a narrow interpretation of interstate commerce to hold that the FAA only applies to transportation employees. This holding is consistent with other holdings from the Rehnquist and Roberts courts that limit that power of the federal government to regulate through the commerce clause. (12)
Though Epic doesn’t discuss state police powers under the 10th Amendment much of the case law relied upon in Epic has to do with how the FAA pre-empts state laws preventing arbitration in certain cases. Essentially the so-called “contracts clause” which prevents laws that impair the obligation of contract. This includes state laws enacted under 10th Amendment police powers. The Supreme Court took up a contracts clause case, Sveen v. Melin, this term. That case could also have implications in the world of employment law depending on the language of the decision and any possible concurring opinions from the likes of Justices Gorsuch, Alito or Thomas.