The Supreme Court occasionally rules on issues related to arbitration agreements and class action requirements and these decisions have a major impact on the size, scope, and prospects of future promotion discrimination and other employment discrimination class lawsuits.
Arbitration agreements and why they matter in glass ceiling discrimination cases
When parties agree to arbitrate, it generally means they’ve agreed not file a case in court. Instead, their legal dispute will be heard by a private, neutral, third party (the arbitrator). The arbitrator will hear each side’s evidence and arguments and then making a ruling. The arbitrator’s decision is generally binding on the parties and enforceable in court. Arbitration can take many different forms so it’s important to know what rules apply if you have signed an arbitration agreement at your job.
The Supreme Court in 2011 issued two significant rulings about class action cases: Wal-Mart v. Dukes and AT&T v. Concepcion. And in early 2017, the Supreme Court announced it would hear another important class action case regarding the use of arbitration agreements (NLRA v. Murphy Oil USA, Inc.). The Murphy Oil case involves arbitration agreements that prohibit individual employees from pursuing work-related claims as a class action in court, arbitration, or any other forum.
Wal-Mart v. Dukes
The first case, Wal-Mart v. Dukes, considered whether an employment discrimination case involving about 1.5 million female Wal-Mart employees could be litigated as a class action. The Supreme Court answered with a clear “no” for the following reasons:
- no “commonality” existed among the class;
- that is, the 1.5 million class members lacked a common question of law or fact that served as “some glue” linking the way in which the employer’s adverse actions impacted the class members;
- the class members also did not suffer the same injury or rely upon a collective contention that could be resolved on a class-wide basis; and
- the monetary claims for back pay damages required individual calculations that were unsuited for a class action.
While many believed the Wal-Mart decision may spell the end for employment discrimination class actions, the results have been considerably less dire. Certainly, it is more difficult now to attain class certification in an employment discrimination case. But many class action cases have been allowed to go forward by courts after Wal-Mart.
Promotion discrimination claims more suitable to class action status
Some types of employment and glass ceiling discrimination claims appear better positioned than others to meet the post-Wal-Mart class action requirements, including cases that involve:
- a small geographic scope (perhaps even a single plant or unit of a larger company);
- a set company policy regarding promotion or compensation; or
- a test that is used to select employees or make promotions
The second big decision, AT&T v. Concepcion, involved a consumer lawsuit about an AT&T cell phone service contract. The contract included an arbitration provision that required the Concepcions to bring any legal claims as individuals only in a private arbitration proceeding; they could not be part of any class action case. Even so, the Concepcions filed a lawsuit in California state court seeking class action status, and AT&T asked the court to dismiss the class action case and force them to arbitrate their claims on an individual basis.
The Concepcions argued that the class action waiver in the arbitration agreement was unconscionable/outrageous and that they should not be bound by it. The Supreme Court, however, disagreed and ruled that companies can use arbitration agreements that require consumers to give up their right to file a case in court (either as an individual or class action case) and limit their legal option to an individual action in arbitration.
Since then, an increasing number of courts have required consumers with legal actions against a business to forego potential class action cases in court and instead arbitrate their individual claims.
NLRA v. Murphy Oil USA, Inc.
In early 2017, the Supreme Court agreed to hear a case (NLRA v. Murphy Oil) about arbitration agreements that bar individual employees from pursuing their work-related claims as a class action in any forum (federal court, state court, arbitration, etc.).
The National Labor Relations Board (NLRB) had ruled that employers cannot use these types of class action waivers in arbitration agreements with employees who are covered by the National Labor Relations Act (NLRA) (most employees in the private sector are covered by the NLRA). Several federal courts have disagreed with the NLRB’s position and refused to follow it. The Supreme Court will now take up whether employers can use class action waivers in arbitration agreements with employees. A decision from the Court should come in late 2017.
This decision should be closely watched as it could have far-reaching consequences on the rights of private sector employees to oppose and seek to correct systemic employment discrimination.
- It is essential for employees to know whether, as part of their employment, they signed or are otherwise subject to an agreement under which they must arbitrate any legal claim they have against the company.
- Employers use different types of arbitration agreement and it is crucial to know whether your claim can be filed in state or federal court or whether it must be handled through private arbitration only.
- Although recent Supreme Court decisions have generally made it more difficult for cases to proceed as class action cases, courts have continued to certify appropriate cases as class actions.
If you have questions about a potential discrimination claim against your employer, it is important to speak with an attorney with experience in handling these claims.