ON May 21st, the Supreme Court issued an employer-friendly ruling that could affect the rights of at least 25m American workers. In a 5-to-4 vote, split along ideological lines, the court ruled that companies may use arbitration clauses in employment contracts to prevent workers from banding together in lawsuits over workplace disputes. The youngest and the oldest members of the court sparred, with 50-year-old Neil Gorsuch writing the majority for his four fellow justices appointed by Republican presidents and 85-year-old Ruth Bader Ginsburg dissenting on behalf of the four Democratic appointees. She took the rare step of reading part of her dissent aloud from the bench, clad in the special collar she reserves for such occasions.  

Epic System v Lewis gives employers a powerful tool to shield themselves from time-consuming, costly litigation. When in 2008 Sheila Hobson, a petrol-station worker, charged that she and three co-workers had not been paid overtime wages, the company shut down the suit by pointing to agreements the workers had signed requiring any disputes to be resolved through individual arbitration—not collectively and not in court. Now that America’s highest court has blessed this practice, which already affects some 54% of non-unionised workers, companies are likely to include it in more employee contracts. Hours after the ruling came down, a New York law firm, Ogletree Deakins, introduced a “simple, straightforward tool” companies might use to “quickly and conveniently generate arbitration agreements with class action waivers”.

The case turned on how to “harmonise”, in Justice Gorsuch’s words, two nearly century-old laws. The Federal Arbitration Act (FAA), passed in 1925, says arbitration agreements “shall be valid, irrevocable and enforceable”. Ten years later, the plaintiffs say, the National Labour Relations Act (NLRA) added an asterisk to that rule when it guaranteed workers the right to coalesce for “mutual aid and protection”. In Justice Gorsuch’s eyes, the NLRA does not carve out an exception to the FAA. The two laws cannot be read to be “at war with one another”. When a worker signs a contract with an arbitration agreement, there is no inherent “fraud or duress” that would render it unenforceable. Though Justice Gorsuch styles himself a “textualist”—a faithful, careful reader of statutes—he arrives at an oddly parsimonious reading of the NLRA’s worker protections. They have to do only with collective bargaining and “closely related" activities "such as picketing”, he wrote, not to the terms of employment contracts.   

The fundamental question, Justice Gorsuch wrote, is whether workers should “always be permitted to bring their claims in class or collective actions, no matter what they agreed with their employers”. That is a rather loaded framing, Justice Ginsburg argued in her fervent dissent. The majority’s reasoning is “egregiously wrong”, she wrote. Joined by Justices Stephen Breyer, Elena Kagan and Sonia Sotomayor, Justice Ginsburg contended that a worker’s signature on a forced arbitration agreement should not be taken as a sign she enthusiastically forfeits the right to sue in concert with co-workers. Characterising the contractual relationship this way is to ignore the “extreme imbalance” between bosses and employees the NLRA was designed to ameliorate. Two of the companies that were party to Epic Systems had simply emailed the agreements to employees—telling them they’d be “deemed” to have accepted the terms if they kept showing up for work.

Workers, Justice Ginsburg wrote, “must have the capacity to act collectively in order to match their employers’ clout” in dictating wages and work conditions. But under the Epic Systems decision, laws aiming at the “wellbeing of vulnerable workers” will be “underenforce[d]”. With no threat of class-action lawsuits, companies could steal small bits of wages from many workers with near impunity, as the benefits of “skirting legal obligations” would outweigh the costs and individual workers would fear retaliation for striking out on their own.

“Congressional correction of the court’s elevation of the FAA over workers’ rights to act in concert”, Justice Ginsburg wrote, “is urgently in order”. A similar call to lawmakers in a dissent in 2007 led Congress to pass the Lilly Ledbetter Fair Pay Act, a law barring pay discrimination, 20 months later. This time around, a Republican Congress may not be as keen on honouring the justice’s wishes.