Statement | Forced arbitration

News from EPI The Restoring Justice for Workers Act is a crucial first step toward shifting the balance of power between workers and employers

Today, Democrats in Congress introduced crucial legislation that would make it illegal for employers to ask workers to sign away their right to take their employer to court when their employer violates their rights under the law. This legislation is necessary after the Supreme Court dealt a significant blow to the fundamental right of workers in this country to join together to address workplace disputes. In Epic Systems v. Lewis, the Court, by a 5–4 majority, held that an employer may lawfully require its employees to agree, as a condition of employment, to resolve all workplace disputes on an individual basis in arbitration. Siding with employers and the Trump administration, the Court’s decision paved the way for the majority of workers in this country to be forced to sign away their right to pursue workplace disputes on a collective or class basis. Available data suggests that, unless Congress acts, more than 80% of workplaces will subject their workers to mandatory arbitration with class and collective action waivers within six years.

When workers are forced to handle workplace disputes as individuals through arbitration, rather than being able to resolve these matters together in court, it is difficult, if not impossible, for workers to enforce their rights. These agreements bar access to the courts for all types of employment-related claims, including those based on the Fair Labor Standards Act, Title VII of the Civil Rights Act, and the Family Medical Leave Act. This means that a worker who is not paid fairly, is discriminated against, or is sexually harassed is forced into a process that overwhelmingly favors the employer—and forced to manage this process alone, even though these issues are rarely confined to one single worker.

Today, Reps. Jerrold Nadler (D-N.Y.) and Bobby Scott (D-Va.) and Sen. Patty Murray (D-Wash.) introduced legislation to ban mandatory arbitration and class and collective action waivers in labor and employment matters. The Restoring Justice for Workers Act is a crucial first step toward shifting the balance of power between employers and employees and ensuring that work is fair from day one.

Mandatory arbitration clauses and class and collective action waivers are part of a long and growing list of tactics used by employers to keep workers’ bargaining power weak and their wages down. While many policymakers are searching for a single big idea to jump-start stagnant wages, it is important to realize that worker power has been eroded by a series of policy choices and it is only by reversing these moves, one by one, in Congress, at the ballot box, and in the courts, that workers will once again have the power to negotiate for higher wages and better working conditions.

See related work on Unions and Labor Standards | Forced arbitration

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