WASHINGTON — When the Supreme Court opens its 2017 term on the first Monday in October, its very first cases will serve as a stark reminder of why elections matter.
When the court was asked to hear three cases on labor arbitration agreements last September, Barack Obama was president, Hillary Clinton was heavily favored to succeed him, and federal appeals court Judge Merrick Garland was in line to replace the late Antonin Scalia. Garland had a strong record of defending workers' rights.
By the time the court agreed to hear the cases, Donald Trump was president-elect and Garland's nomination was dead. Three months later, Neil Gorsuch was sworn in as the court's newest justice — and his record in workplace cases skews the other way.
And when the initial flurry of friend-of-the-court briefs arrived in mid-June, the Justice Department revealed that it had switched sides. Under Obama, it had argued that companies could not require workers to file disputes alone through arbitration, rather than collectively. Under Trump, "the office reconsidered the issue and has reached the opposite conclusion," the acting solicitor general's brief says.
The about-face has created an extremely rare scenario: the Justice Department and National Labor Relations Board, a federal agency, will oppose each other in court.
"We will have two arguments by government representatives on opposite sides of the issue," Justice Ruth Bader Ginsburg told first-year law students at Georgetown University Law Center on Wednesday. "That will be a first for me in the 25 years I've served on the court."
By all indications now, the case — which will decide whether millions of employees who sign individual arbitration agreements, often unknowingly, can be barred from banding together with other workers — looks like a 5-4 victory for employers.
Together with another labor law case heading toward the court — which will decide whether public employee unions can collect fees from non-members -- the upcoming term stands "a real chance of being a one-two punch against workers' rights," says Claire Prestel, associate general counsel for the Service Employees International Union.
The high court has been deferential in the past to arbitration agreements, favored by many employers as a way to resolve disputes over pay, benefits, discrimination and harassment without going to court. Last year, 54% of companies reported using arbitration clauses in contracts, and one-third of those barred workers from banding together.
The nation's major business trade groups have lined up in favor of the three employers: Epic Systems, a Wisconsin health care software company; Ernst & Young accountants; and Murphy Oil, which operates gas stations in 26 states. They will be represented in court by former U.S. solicitor general Paul Clement, perhaps the nation's premier Supreme Court litigator.
"The advantages of arbitration need not be sacrificed in the employment context," two of the companies say in court papers. "Like other contracts, employment contracts may require that arbitration be conducted on an individual basis."
The problem for workers is that arbitration disputes can be expensive, and those fighting alone may risk retaliation.
“Most workers can’t hold big corporations accountable one by one," says Catherine Ruckelshaus, general counsel at the National Employment Law Project. “It would radically tilt the landscape in favor of corporations if the workers lose here.”
The Federal Arbitration Act of 1925 made arbitration agreements legal. Ten years later, the National Labor Relations Act protected employees' rights. The question before the court is whether those rights render individual arbitration agreements void.
The Supreme Court ruled 5-4 in 2011 that arbitration agreements streamlining the dispute resolution process are enforceable under the 1925 law. The decision was written by Scalia, with all four liberal justices dissenting.
But the increased use of arbitration has led to "the privatization of disputes," says Sherrilyn Ifill, president of the NAACP Legal Defense and Educational Fund, which has weighed in on the side of workers. "We see this as a civil rights issue."