Divide and Conquer

The Supreme Court arrived at its Murphy decision on May 21 after reviewing cases brought against three companies — Ernst & Young LLP, Epic Systems Corporation, and Murphy Oil USA, Inc. In each instance, employees of the company had sought to bring a class-action lawsuit against their employer, only to find that they were barred from doing so by the mandatory one-on-one arbitration clauses in their contracts. The employees challenged the legality of the contracts on the grounds that the National Labor Relations Act protected their right to take collective action against their bosses. They argued that mandatory one-on-one arbitration effectively violated that right by preventing them from combining forces in the courtroom.

In Chicago, Los Angeles, and New York alone, workers lose an estimated $3 billion in illegally withheld wages every year, largely to a handful of huge companies that operate across the country. The plaintiffs argued that it doesn’t make sense for each one of the millions of employees who work for the nation’s largest companies to go through an individual arbitration process when labor violations are widespread and display clear patterns. For example, if they were going through arbitration alone, a typical employee at Ernst & Young LLP would need to spend $200,000 in legal fees to recover $1,900 in withheld overtime pay. No worker would ever do that, which makes mandatory one-on-one arbitration a backdoor way for corporations to violate laws protecting workers.

“Because I would hold that employees’ rights include the right to pursue collective litigation regarding their wages and hours, I would further hold that the employer dictated collective-litigation stoppers . . . are unlawful,” wrote Justice Ruth Bader Ginsberg in her dissenting opinion this week. “The inevitable result of today’s decision will be the underenforcement of federal and state statutes designed to advance the well-being of vulnerable workers . . . Employees’ rights to band together to meet their employers’ superior strength would be worth precious little if employers could condition employment on workers signing away those rights.”

But Ginsburg’s perspective did not prevail. Writing for the majority, Justice Neil Gorsuch argued that the mandatory one-on-one arbitration contracts signed by the plaintiffs were lawful and binding, and that the National Labor Relations Act had little bearing on the matter at hand. “The NLRA secures to employees rights to organize unions and bargain collectively, but it says nothing about how judges and arbitrators must try legal disputes that leave the workplace and enter the courtroom or arbitral forum,” Gorsuch wrote. On that basis, the court ruled that the increasingly widespread practice of mandatory one-on-one arbitration — contracts that are often signed hastily by low-income workers desperate for an immediate source of cash and unfamiliar with legal jargon — is perfectly sound from a constitutional standpoint.

Many of the sixty million private-sector, nonunion employees who are subject to mandatory one-on-one arbitration contracts don’t currently know it, because they haven’t read the fine print and they’ve never tried to collectively sue their boss. But if and when they do, they will find that the highest court in the country has determined that they have no right to pursue collective legal action in a public courtroom.

Bosses Above the Law

“Solidarity is not a matter of sentiment but a fact,” said Eugene Debs, “cold and impassive as the granite foundations of a skyscraper.” It isn’t simply a feeling of unity or common cause between workers; solidarity is tangible, an actual coalescence of individuals around mutual grievances, with a unified strategy and shared concrete demands. Solidarity doesn’t just exist in the ether but in the real world, and as such it is vulnerable to real-world sabotage in the form of anti-solidaristic laws and practices that undermine workers’ ability to act in concert.

In reality, the Murphy Oil decision presents a huge impediment to worker solidarity. Workers need to be able to join together in order to stand up to their infinitely more powerful employers. Just as a union is necessary to bargain for collective benefits that individuals can’t effectively negotiate alone, workers must be able to aggregate their legal claims in order to level them at all. This has an economic basis: the workers most impacted by wage and hour violations are the least likely to be able to afford a lawyer on their own, and even if they can, the cost of litigation typically far outweighs the costs they stand to recoup. Class-action lawsuits are often the only way workers can afford to hold their bosses accountable for labor law violations.

Prohibiting workers from banding together to attain shared legal council is a clever way for bosses to avoid being sued for labor violations at all, which effectively permits them to skirt the law and mistreat workers without penalty. As ever, the more divided workers are, the more liberty their bosses have to exploit them. Employers and their accomplices know this, and are almost giddy about their victory. The practice upheld by the Murphy Oil decision, said one corporate lawyer, “gives employers the green light to eliminate their single largest employment law risk with the stroke of a pen.”

Marx knew that the isolation of workers was crucial to capitalists’ continuing triumph over the working class. And he wasn’t particularly sanguine about the prospects for immediately overcoming this enforced isolation: “Every organized power standing over these isolated individuals, who live in conditions daily reproducing this isolation,” he wrote, “can only be overcome after long struggles.” With this week’s Supreme Court decision, the struggle against worker isolation has encountered yet another setback, devised by capitalists who have long understood worker solidarity as a threat to the bottom line.