Arbitration can be an effective tool to resolve contract disputes without going to court. But employers shouldn't be able to force workers into arbitration in contravention of worker protections established in federal laws and regulations, and they certainly shouldn't make getting a job contingent on giving up the right to seek redress in the courts. Unfortunately, both have become regular occurrences, but a case now being briefed before the Supreme Court can — and should — fix that.
The case involves four employees of Murphy Oil USA, which at the time of the dispute operated gas stations in 22 states (the stations have since been spun off into a unit called Murphy USA). When Sheila Hobson, the main plaintiff, applied for a job at a Murphy Oil gas station in Calera, Ala., in 2008, the company demanded she first agree not to sue should a workplace dispute arise, and instead go to binding arbitration. Hobson agreed and got hired. Two years later, Hobson and three other employees filed a complaint in federal court alleging that Murphy Oil had violated federal labor laws by stiffing them on overtime and off-the-clock labor, including driving around to check prices at competing gas stations. Murphy Oil demanded in a court filing that the workers drop the group legal complaint and individually enter into arbitration, as they had agreed when hired. That led the workers to file an unfair labor practice complaint with the National Labor Relations Board over the compulsory binding-arbitration agreement, setting the issue on the path to the Supreme Court.
The Hobson case is not unusual. Other workers forced to sign arbitration agreements as a condition of employment have engaged in similar fights with their employers in several federal jurisdictions, leading to conflicting rulings in district and appellate courts. Some concluded the National Labor Relations Act, adopted in 1935, takes precedence and bars employers from forcing workers to waive their right to legal action. Others sided with the companies, ruling that the Federal Arbitration Act, enacted in 1925, trumps other federal and state laws — including the Americans with Disabilities Act and the Civil Rights Act of 1964 — once workers sign a contract requiring disputes to be settled through arbitration. What strikes us as the linchpin here, though, is how the agreement to rely on arbitration is reached, not whether one law supersedes the other.
People or companies entering into an agreement on equal footing, and in circumstances in which they have other options, have a perfect right to decide that they would rather settle potential disputes through arbitration instead of the courts. But people desperate for work, especially in an economy as weak as it was when Hobson was hired in 2008, are not on equal footing with the company offering jobs. And if employers routinely require applicants to sign away legal rights to be considered for a job, then the employees have no other real option even in a robust economy. That is an egregious practice. People should not have to forgo their fundamental right to seek redress through the courts in order to work for a living.
The Solicitor General's office under President Obama had joined in the NLRB's September petition seeking a hearing before the Supreme Court, and defended the NLRB's ruling that the arbitration agreements were not enforceable. In a disappointing but predictable twist, the Trump administration recently submitted a brief backing the employers, leaving the NLRB to defend itself alone (oral arguments will likely be heard in the fall). So much for Trump's promise to look out for working Americans.
The right to seek justice through the courts is guaranteed under the 1st Amendment, which says citizens may "petition the government for a redress of grievances." That's true even when the grievance is against an employer, or a neighbor, or a mobile phone provider. A half-dozen employees with the same complaint — discrimination, unsafe working conditions, systematic failure by the employer to follow wage laws — should be able to stand together to hold their employer accountable. That right, in fact, is fundamental to the right to organize a union or engage in collective bargaining. But it is also a fundamental right for any individual who believes he or she has been wronged to seek justice before a judge or a jury.