PRACTITIONER BLOG
Read our analyses of developments in Impact Litigation and stay current on class action law
Southwest flies into trouble as SCOTUS holds transportation workers exempt from Federal Arbitration Act
For decades, conventional wisdom favored an expansive, business-friendly interpretation of the Federal Arbitration Act of 1925—one that has made it easier for corporations to force workers and consumers into arbitration. But this term, in Southwest Airlines v. Saxon, the Supreme Court took a different approach. Following argument by our colleague Jennifer Bennett, the Court zeroed in on the text of the FAA—specifically, how that text would have been understood when the statute was passed in 1925—and recognized an important limitation on what types of workers can be forced into arbitration.
Sixth Circuit Ruling Restricts Imposition of Arbitration
A recent Sixth Circuit decision, Taylor v. Pilot Corp, broadly reaffirms that an agreement to arbitrate must be just that—an agreement. It suggests that questions about the formation of that agreement must be decided by a court—not an arbitrator. And it reaffirms the courts’ power to supervise discovery going to the question of contract formation without interference from appellate courts or arbitrators.
Toothless Rights: How Forced Arbitration and Class Action Waivers Undermine Civil Rights at Work
Class and collective action empowers those that share the same experiences and injuries to stand together and assert their rights as a group, and they are critical to achieving widespread, systemic change. Class action waivers in mandatory arbitration agreements can erase all of these benefits, requiring employees to pursue their claims through individual arbitration.
But a series of Supreme Court decisions since the early 1980’s has largely sanctioned and accelerated the propagation of forced arbitration, including agreements that prohibit class litigation.
Epic Systems And The Erosion Of Federal Class Actions
Epic Systems expanded Concepcion, concluding that federal labor law does not block arbitration class waivers, rendering them permissible in the employment context, too. Justice Ruth Bader Ginsburg noted that this additional barrier will lead to the under-enforcement of employment law stemming from this restriction on collective power, as has already happened in the consumer context.