Report Attacking Employment Arbitration Agreements Sets Stage for Legislative Action

April 13, 2018

The U.S. Supreme Court will soon rule on the legality of mandatory predispute arbitration agreements under the National Labor Relations Act, though a decision in favor of such agreements would likely revive congressional attacks on the procedure.  Raising the profile of the issue from the plaintiff perspective, a new report by the Economic Policy Institute (EPI) says the number of workers subject to such agreements has significantly increased over the past 15 years.  The high court is considering three consolidated cases in which the Obama-era NLRB ruled that arbitration agreements that bar employees from pursuing work-related class-action claims infringe on employees' right to engage in "concerted activities."  HR Policy joined other business groups in urging the Court to overturn the NLRB decision, which construed the protection in an overly broad manner.  Importantly, arbitration allows both sides to address disputes in a manner minimizing both the costs and delays associated with traditional litigation, affords employees greater privacy than could be maintained in public court proceedings, and generates higher-value claims for individuals.  Meanwhile, arbitration agreements have come under attack in the context of the recent spate of sexual harassment claims, with legislation introduced in Congress to prohibit those and other gender discrimination claims from being subjected to such agreements.  The EPI report concludes that Congress may have "to act in order to ensure that American workers have an effective means of enforcing the rights they have been promised."