SUPREME COURT OF THE UNITED STATES
_________________
Nos. 16–285, 16–300, 16–307
_________________
EPIC SYSTEMS CORPORATION, PETITIONER
16–285
v.
JACOB LEWIS;
on writ of certiorari to the united states
court of appeals for the seventh circuit
ERNST & YOUNG LLP, et al.,
PETITIONERS
16–300
v.
STEPHEN MORRIS, et al.; AND
on writ of certiorari to the united states
court of appeals for the ninth circuit
NATIONAL LABOR RELATIONS BOARD,
PETITIONER
16–307
v.
MURPHY OIL USA, INC., et al.
on writ of certiorari to the united states
court of appeals for the fifth circuit
[May 21, 2018]
Justice Ginsburg, with whom Justice Breyer,
Justice Sotomayor, and Justice Kagan join, dissenting.
The employees in these cases complain that their
employers have underpaid them in violation of the wage and hours
prescriptions of the Fair Labor Standards Act of 1938 (FLSA), 29
U. S. C. §201
et seq., and analogous state
laws
. Individually, their claims are small, scarcely of a
size warranting the expense of seeking redress alone. See Ruan,
What’s Left To Remedy Wage Theft? How Arbitration Mandates That Bar
Class Actions Impact Low-Wage Workers, 2012 Mich. St. L. Rev. 1103,
1118–1119 (Ruan). But by joining together with others similarly
circumstanced, employees can gain effective redress for wage
underpayment commonly experienced. See
id., at 1108–1111. To
block such concerted action, their employers required them to sign,
as a condition of employment, arbitration agreements banning
collective judicial and arbitral proceedings of any kind. The
question presented: Does the Federal Arbitration Act (Arbitration
Act or FAA), 9 U. S. C. §1
et seq., permit
employers to insist that their employees, whenever seeking redress
for commonly experienced wage loss, go it alone, never mind the
right secured to employees by the National Labor Relations Act
(NLRA), 29 U. S. C. §151
et seq., “to engage
in . . . concerted activities” for their “mutual aid or
protection”? §157. The answer should be a resounding “No.”
In the NLRA and its forerunner, the
Norris-LaGuardia Act (NLGA), 29 U. S. C. §101
et seq., Congress acted on an acute awareness: For
workers striving to gain from their employers decent terms and
conditions of employment, there is strength in numbers. A single
employee, Con- gress understood, is disarmed in dealing with an
employer. See
NLRB v.
Jones & Laughlin Steel
Corp., 301 U. S. 1, 33–34 (1937). The Court today
subordinates employee-protective labor legislation to the
Arbitration Act. In so doing, the Court forgets the labor market
imbalance that gave rise to the NLGA and the NLRA, and ignores the
destructive consequences of diminishing the right of employees “to
band together in confronting an employer.”
NLRB v.
City
Disposal Systems, Inc., 465 U. S. 822, 835 (1984).
Congressional correction of the Court’s elevation of the FAA over
workers’ rights to act in concert is urgently in order.
To explain why the Court’s decision is
egregiously wrong, I first refer to the extreme imbalance once
prevalent in our Nation’s workplaces, and Congress’ aim in the NLGA
and the NLRA to place employers and employees on a more equal
footing. I then explain why the Arbitration Act, sensibly read,
does not shrink the NLRA’s protective sphere.
I
It was once the dominant view of this Court
that “[t]he right of a person to sell his labor upon such terms as
he deems proper is . . . the same as the right of the
purchaser of labor to prescribe [working] conditions.”
Adair
v.
United States, 208 U. S. 161, 174 (1908)
(invalidating federal law prohibiting interstate railroad employers
from discharging or discriminating against employees based on their
membership in labor organizations); accord
Coppage v.
Kansas, 236 U. S. 1, 26 (1915) (invalidating state law
prohibit- ing employers from requiring employees, as a condition of
employment, to refrain or withdraw from union membership).
The NLGA and the NLRA operate on a different
premise, that employees must have the capacity to act collectively
in order to match their employers’ clout in setting terms and
conditions of employment. For decades, the Court’s decisions have
reflected that understanding. See
Jones & Laughlin
Steel, 301 U. S. 1 (upholding the NLRA against employer
assault); cf.
United States v.
Darby, 312 U. S.
100 (1941) (upholding the FLSA).
A
The end of the 19th century and beginning of
the 20th was a tumultuous era in the history of our Nation’s labor
relations. Under economic conditions then prevailing, workers often
had to accept employment on whatever terms employers dictated. See
75 Cong. Rec. 4502 (1932). Aiming to secure better pay, shorter
workdays, and safer workplaces, workers increasingly sought to band
together to make their demands effective. See
ibid.; H.
Millis & E. Brown, From the Wagner Act to Taft-Hartley: A Study
of National Labor Policy and Labor Relations 7–8 (1950).
Employers, in turn, engaged in a variety of
tactics to hinder workers’ efforts to act in concert for their
mutual benefit. See J. Seidman, The Yellow Dog Contract 11 (1932).
Notable among such devices was the “yellow-dog contract.” Such
agreements, which employers required employees to sign as a
condition of employment, typically commanded employees to abstain
from joining labor unions. See
id., at 11, 56. Many of the
employer-designed agreements cast an even wider net, “proscrib[ing]
all manner of concerted activities.” Finkin, The Meaning and
Contemporary Vitality of the Norris-LaGuardia Act, 93 Neb.
L. Rev. 6, 16 (2014); see Seidman,
supra, at 59–60,
65–66. As a prominent United States Senator observed, contracts of
the yellow-dog genre rendered the “laboring man . . .
absolutely helpless” by “waiv[ing] his right . . . to
free association” and by requiring that he “singly present any
grievance he has.” 75 Cong. Rec. 4504 (remarks of Sen. Norris).
Early legislative efforts to protect workers’
rights to band together were unavailing. See,
e.g., Coppage,
236 U. S., at 26; Frankfurter & Greene, Legislation
Affecting Labor Injunctions, 38 Yale L. J. 879, 889–890
(1929). Courts, including this one, invalidated the legislation
based on then-ascendant notions about employers’ and employees’
constitutional right to “liberty of contract.” See
Coppage,
236 U. S., at 26; Frankfurter & Greene,
supra, at
890–891. While stating that legislatures could curtail contractual
“liberty” in the interest of public health, safety, and the general
welfare, courts placed outside those bounds legislative action to
redress the bargaining power imbalance workers faced. See
Coppage, 236 U. S., at 16–19.
In the 1930’s, legislative efforts to safeguard
vulnerable workers found more receptive audiences. As the Great
Depression shifted political winds further in favor of
worker-protective laws, Congress passed two statutes aimed at
protecting employees’ associational rights. First, in 1932,
Congress passed the NLGA, which regulates the employer-employee
relationship indirectly. Section 2 of the Act declares:
“Whereas . . . the individual
unorganized worker is commonly helpless to exercise actual liberty
of contract and to protect his freedom of labor, . . . it
is necessary that he have full freedom of association,
self-organization, and designation of representatives of his own
choosing, . . . and that he shall be free from the
interference, restraint, or coercion of employers . . .
in the designation of such representatives or in self-organization
or in other concerted activities for the purpose of collective
bargaining or other mutual aid or protection.” 29
U. S. C. §102.
Section 3 provides that federal courts shall not
enforce “any . . . undertaking or promise in conflict
with the public policy declared in [§2].” §103.[
1] In adopting these provisions, Congress sought
to render ineffective employer-imposed contracts proscribing
employees’ concerted activity of any and every kind. See 75 Cong.
Rec. 4504–4505 (remarks of Sen. Norris) (“[o]ne of the objects” of
the NLGA was to “outlaw” yellow-dog contracts); Finkin,
supra, at 16 (contracts prohibiting “all manner of concerted
activities apart from union membership or support . . .
were understood to be ‘yellow dog’ contracts”). While banning court
enforcement of contracts proscribing concerted action by employees,
the NLGA did not directly prohibit coercive employer practices.
But Congress did so three years later, in 1935,
when it enacted the NLRA. Relevant here, §7 of the NLRA guarantees
employees “the right to self-organization, to form, join, or assist
labor organizations, to bargain collectively through
representatives of their own choosing,
and to engage in other
concerted activities for the purpose of collective bargaining or
other mutual aid or protection.” 29 U. S. C. §157
(emphasis added). Section 8(a)(1) safeguards those rights by making
it an “unfair labor practice” for an employer to “interfere with,
restrain, or coerce employees in the exercise of the rights
guaranteed in [§7].” §158(a)(1). To oversee the Act’s guarantees,
the Act established the National Labor Relations Board (Board or
NLRB), an independent regulatory agency empowered to administer
“labor policy for the Nation.”
San Diego Building Trades
Council v.
Garmon, 359 U. S. 236, 242 (1959); see
29 U. S. C. §160.
Unlike earlier legislative efforts, the NLGA and
the NLRA had staying power. When a case challenging the NLRA’s
constitutionality made its way here, the Court, in retreat from its
Lochner-era contractual-“liberty” decisions, upheld the Act
as a permissible exercise of legislative authority. See
Jones
& Laughlin Steel, 301 U. S., at 33–34. The Court
recognized that employees have a “fundamental right” to join
together to advance their common interests and that Congress, in
lieu of “ignor[ing]” that right, had elected to “safeguard” it.
Ibid.
B
Despite the NLRA’s prohibitions, the employers
in the cases now before the Court required their employees to sign
contracts stipulating to submission of wage and hours claims to
binding arbitration, and to do so only one-by-one.[
2] When employees subsequently filed wage and
hours claims in federal court and sought to invoke the
collective-litigation procedures provided for in the FLSA and
Federal Rules of Civil Procedure,[
3] the employers moved to compel individual arbitration.
The Arbitration Act, in their view, requires courts to enforce
their take-it-or-leave-it arbitration agreements as written,
including the collective-litigation abstinence demanded
therein.
In resisting enforcement of the group-action
foreclosures, the employees involved in this litigation do not urge
that they must have access to a judicial forum.[
4] They argue only that the NLRA prohibits their
employers from denying them the right to pursue work-related claims
in concert in any forum. If they may be stopped by
employer-dictated terms from pursuing collective procedures in
court, they maintain, they must at least have access to similar
procedures in an arbitral forum.
C
Although the NLRA safeguards, first and
foremost, workers’ rights to join unions and to engage in
collective bargaining, the statute speaks more embracively. In
addition to protecting employees’ rights “to form, join, or assist
labor organizations” and “to bargain collectively through
representatives of their own choosing,” the Act protects employees’
rights “to engage in
other concerted activities for the
purpose of . . . mutual aid or protection.” 29
U. S. C. §157 (emphasis added); see,
e.g.,
NLRB v.
Washington Aluminum Co., 370 U. S. 9,
14–15 (1962) (§7 protected unorganized employees when they walked
off the job to protest cold working conditions). See also 1 J.
Higgins, The Developing Labor Law 209 (6th ed. 2012) (“Section 7
protects not only union-related activity but also ‘other concerted
activities . . . for mutual aid or protection.’ ”);
1 N. Lareau, Labor and Employment Law §1.01[1], p. 1–2 (2017)
(“Section 7 extended to employees three federally protected rights:
(1) the right to form and join unions; (2) the right to bargain
collectively (negotiate) with employers about terms and conditions
of employment;
and (3) the right to work in concert with
another employee or employees to achieve employment-related goals.”
(emphasis added)).
Suits to enforce workplace rights collectively
fit comfortably under the umbrella “concerted activities for the
purpose of . . . mutual aid or protection.” 29
U. S. C. §157. “Concerted” means “[p]lanned or
accomplished together; combined.” American Heritage Dictionary 381
(5th ed. 2011). “Mutual” means “reciprocal.”
Id., at 1163.
When employees meet the requirements for litigation of shared legal
claims in joint, collective, and class proceedings, the litigation
of their claims is undoubtedly “accomplished together.” By joining
hands in litigation, workers can spread the costs of litigation and
reduce the risk of employer retaliation. See
infra, at
27–28.
Recognizing employees’ right to engage in
collective employment litigation and shielding that right from
employer blockage are firmly rooted in the NLRA’s design. Congress
expressed its intent, when it enacted the NLRA, to “protec[t] the
exercise by workers of full freedom of association,” thereby
remedying “[t]he inequality of bargaining power” workers faced. 29
U. S. C. §151; see,
e.g., Eastex, Inc. v.
NLRB, 437 U. S. 556, 567 (1978) (the Act’s policy is
“to protect the right of workers to act together to better their
working conditions” (internal quotation marks omitted));
City
Disposal, 465 U. S., at 835 (“[I]n enacting §7 of the
NLRA, Congress sought generally to equalize the bargaining power of
the employee with that of his employer by allowing employees to
band together in confronting an employer regarding the terms and
conditions of their employment.”). See also
supra, at 5–6.
There can be no serious doubt that collective litigation is one way
workers may associate with one another to improve their lot.
Since the Act’s earliest days, the Board and
federal courts have understood §7’s “concerted activities” clause
to protect myriad ways in which employees may join together to
advance their shared interests. For example, the Board and federal
courts have affirmed that the Act shields employees from employer
interference when they participate in concerted appeals to the
media,
e.g., NLRB v.
Peter Cailler Kohler Swiss
Chocolates Co., 130 F. 2d 503, 505–506 (CA2 1942),
legislative bodies,
e.g., Bethlehem Shipbuilding
Corp. v.
NLRB, 114 F. 2d 930, 937 (CA1 1940), and
government agencies,
e.g., Moss Planing Mill Co., 103
N. L. R. B. 414, 418–419, enf’d, 206 F. 2d 557
(CA4 1953). “The 74th Congress,” this Court has noted, “knew well
enough that labor’s cause often is advanced on fronts other than
collective bargaining and grievance settlement within the immediate
employment context.”
Eastex, 437 U. S., at 565.
Crucially important here, for over 75 years, the
Board has held that the NLRA safeguards employees from employer
interference when they pursue joint, collective, and class suits
related to the terms and conditions of their employment. See,
e.g., Spandsco Oil and Royalty Co., 42
N. L. R. B. 942, 948–949 (1942) (three employees’
joint filing of FLSA suit ranked as concerted activity protected by
the NLRA);
Poultrymen’s Service Corp., 41
N. L. R. B. 444, 460–463, and n. 28 (1942) (same
with respect to employee’s filing of FLSA suit on behalf of himself
and others similarly situated), enf’d, 138 F. 2d 204 (CA3
1943);
Sarkes Tarzian, Inc., 149 N. L. R. B.
147, 149, 153 (1964) (same with respect to employees’ filing class
libel suit);
United Parcel Service, Inc., 252
N. L. R. B. 1015, 1018 (1980) (same with respect to
employee’s filing class action regarding break times), enf’d, 677
F. 2d 421 (CA6 1982);
Harco Trucking, LLC, 344
N. L. R. B. 478, 478–479 (2005) (same with respect
to employee’s maintaining class action regarding wages). For
decades, federal courts have endorsed the Board’s view,
comprehending that “the filing of a labor related civil action by a
group of employees is ordinarily a concerted activity protected by
§7.”
Leviton Mfg. Co. v.
NLRB, 486 F. 2d 686,
689 (CA1 1973); see,
e.g., Brady v.
National
Football League, 644 F. 3d 661, 673 (CA8 2011)
(similar).[
5] The Court pays
scant heed to this longstanding line of decisions.[
6]
D
In face of the NLRA’s text, history, purposes,
and longstanding construction, the Court nevertheless concludes
that collective proceedings do not fall within the scope of §7.
None of the Court’s reasons for diminishing §7 should carry the
day.
1
The Court relies principally on the
ejusdem
generis canon. See
ante, at 12. Observing that §7’s
“other concerted activities” clause “appears at the end of a
detailed list of activities,” the Court says the clause should be
read to “embrace” only activities “similar in nature” to those set
forth first in the list,
ibid. (internal quotation marks
omitted),
i.e., “ ‘self-organization,’ ‘form[ing],
join[ing], or assist[ing] labor organizations,’ and ‘bargain[ing]
collectively,’ ”
ibid. The Court concludes that §7
should, therefore, be read to protect “things employees ‘just do’
for themselves.”
Ibid. (quoting
NLRB v.
Alternative Entertainment, Inc., 858 F. 3d 393, 415
(CA6 2017) (Sutton, J., concurring in part and dissenting in part);
emphasis deleted). It is far from apparent why joining hands in
litigation would not qualify as “things employees just do for
themselves.” In any event, there is no sound reason to employ the
ejusdem generis canon to narrow §7’s protections in the
manner the Court suggests.
The
ejusdem generis canon may serve as a
useful guide where it is doubtful Congress intended statutory words
or phrases to have the broad scope their ordinary meaning conveys.
See
Russell Motor Car Co. v.
United States, 261
U. S. 514, 519 (1923). Courts must take care, however, not to
deploy the canon to undermine Congress’ efforts to draft
encompassing legislation. See
United States v.
Powell, 423 U. S. 87, 90 (1975) (“[W]e would be
justified in narrowing the statute only if such a narrow reading
was supported by evidence of congressional intent over and above
the language of the statute.”). Nothing suggests that Congress
envisioned a cramped construction of the NLRA. Quite the opposite,
Congress expressed an embracive purpose in enacting the
legislation,
i.e., to “protec[t] the exercise by workers of
full freedom of association.” 29 U. S. C. §151; see
supra, at 9.
2
In search of a statutory hook to support its
application of the
ejusdem generis canon, the Court turns to
the NLRA’s “structure.”
Ante, at 12. Citing a handful of
provisions that touch upon unionization, collective bargaining,
picketing, and strikes, the Court asserts that the NLRA
“establish[es] a regulatory regime” governing each of the
activities protected by §7.
Ante, at 12–13. That regime, the
Court says, offers “specific guidance” and “rules” regulating each
protected activity.
Ante, at 13. Observing that none of the
NLRA’s provisions explicitly regulates employees’ resort to
collective litigation, the Court insists that “it is hard to fathom
why Congress would take such care to regulate all the other matters
mentioned in [§7] yet remain mute about this matter alone—unless,
of course, [§7] doesn’t speak to class and collective action
procedures in the first place.”
Ibid.
This argument is conspicuously flawed. When
Congress enacted the NLRA in 1935, the only §7 activity Congress
addressed with any specificity was employees’ selection of
collective-bargaining representatives. See 49Stat. 453. The Act did
not offer “specific guidance” about employees’ rights to “form,
join, or assist labor organizations.” Nor did it set forth
“specific guidance” for any activity falling within §7’s “other
concerted activities” clause. The only provision that touched upon
an activity falling within that clause stated: “Nothing in this Act
shall be construed so as to interfere with or impede or diminish in
any way the right to strike.”
Id., at 457. That provision
hardly offered “specific guidance” regarding employees’ right to
strike.
Without much in the original Act to support its
“structure” argument, the Court cites several provisions that
Congress added later, in response to particular concerns. Compare
49Stat. 449–457 with 61Stat. 142–143 (1947) (adding §8(d) to
provide guidance regarding employees’ and employers’
collective-bargaining obligations); 61Stat. 141–142 (amending §8(a)
and adding §8(b) to proscribe specified labor organization
practices); 73Stat. 544 (1959) (adding §8(b)(7) to place
restrictions on labor organizations’ right to picket employers). It
is difficult to comprehend why Congress’ later inclusion of
specific guidance regarding some of the activities protected by §7
sheds any light on Congress’ initial conception of §7’s scope.
But even if each of the provisions the Court
cites had been included in the original Act, they still would
provide little support for the Court’s conclusion. For going on 80
years now, the Board and federal courts—including this one—have
understood §7 to protect numerous activities for which the Act
provides no “specific” regulatory guidance. See
supra, at
9–10.
3
In a related argument, the Court maintains
that the NLRA does not “even whispe[r]” about the “rules [that]
should govern the adjudication of class or collective actions in
court or arbitration.”
Ante, at 13. The employees here
involved, of course, do not look to the NLRA for the procedures
enabling them to vindicate their employment rights in arbitral or
judicial forums. They assert that the Act establishes their right
to act in concert using existing, generally available procedures,
see
supra, at 7, n. 3, and to do so free from employer
interference. The FLSA and the Federal Rules on joinder and class
actions provide the procedures pursuant to which the employees may
ally to pursue shared legal claims. Their employers cannot lawfully
cut off their access to those procedures, they urge, without
according them access to similar procedures in arbitral forums.
See,
e.g., American Arbitration Assn., Supplementary Rules
for Class Arbitrations (2011).
To the employees’ argument, the Court replies:
If the employees “really take existing class and collective action
rules as they find them, they surely take them subject to the
limitations inherent in those rules—including the principle that
parties may (as here) contract to depart from them in favor of
individualized arbitration procedures.”
Ante, at 14. The
freedom to depart asserted by the Court, as already underscored, is
entirely one sided. See
supra, at 2–5. Once again, the Court
ignores the reality that sparked the NLRA’s passage: Forced to face
their employers without company, employees ordinarily are no match
for the enterprise that hires them. Employees gain strength,
however, if they can deal with their employers in numbers. That is
the very reason why the NLRA secures against employer interference
employees’ right to act in concert for their “mutual aid or
protection.” 29 U. S. C. §§151, 157, 158.
4
Further attempting to sow doubt about §7’s
scope, the Court asserts that class and collective procedures were
“hardly known when the NLRA was adopted in 1935.”
Ante, at
11. In particular, the Court notes, the FLSA’s
collective-litigation procedure postdated §7 “by years” and Rule 23
“didn’t create the modern class action until 1966.”
Ibid.
First, one may ask, is there any reason to
suppose that Congress intended to protect employees’ right to act
in concert using only those procedures and forums available in
1935? Congress framed §7 in broad terms, “entrust[ing]” the Board
with “responsibility to adapt the Act to changing patterns of
industrial life.”
NLRB v.
J. Weingarten, Inc., 420
U. S. 251, 266 (1975); see
Pennsylvania Dept. of
Corrections v.
Yeskey, 524 U. S. 206, 212 (1998)
(“[T]he fact that a statute can be applied in situations not
expressly anticipated by Congress does not demonstrate ambiguity.
It demonstrates breadth.” (internal quotation marks omitted)). With
fidelity to Congress’ aim, the Board and federal courts have
recognized that the NLRA shields employees from employer
interference when they,
e.g., join together to file
complaints with administrative agencies, even if those agencies did
not exist in 1935. See,
e.g., Wray Electric Contracting,
Inc., 210 N. L. R. B. 757, 762 (1974) (the NLRA
protects concerted filing of complaint with the Occupational Safety
and Health Administration).
Moreover, the Court paints an ahistorical
picture. As Judge Wood, writing for the Seventh Circuit, cogently
explained, the FLSA’s collective-litigation procedure and the
modern class action were “not written on a clean slate.” 823
F. 3d 1147, 1154 (2016). By 1935, permissive joinder was
scarcely uncommon in courts of equity. See 7 C. Wright, A. Miller,
& M. Kane, Federal Practice and Procedure §1651 (3d ed. 2001).
Nor were representative and class suits novelties. Indeed, their
origins trace back to medieval times. See S. Yeazell, From Medieval
Group Litigation to the Modern Class Action 38 (1987). And beyond
question, “[c]lass suits long have been a part of American
jurisprudence.” 7A Wright,
supra, §1751, at 12 (3d ed.
2005); see
Supreme Tribe of Ben-Hur v.
Cauble, 255
U. S. 356, 363 (1921). See also Brief for Constitutional
Accountability Center as
Amicus Curiae 5–16 (describing
group litigation’s “rich history”). Early instances of joint
proceedings include cases in which employees allied to sue an
employer.
E.g., Gorley v.
Louisville, 23 Ky. 1782, 65
S.W. 844 (1901) (suit to recover wages brought by ten members of
city police force on behalf of themselves and other officers);
Guiliano v.
Daniel O’Connell’s Sons, 105 Conn. 695,
136 A. 677 (1927) (suit by two employees to recover for injuries
sustained while residing in housing provided by their employer). It
takes no imagination, then, to comprehend that Congress, when it
enacted the NLRA, likely meant to protect employees’ joining
together to engage in collective litigation.[
7]
E
Because I would hold that employees’ §7 rights
include the right to pursue collective litigation regarding their
wages and hours, I would further hold that the employer-dictated
collective-litigation stoppers,
i.e., “waivers,” are
unlawful. As earlier recounted, see
supra, at 6, §8(a)(1)
makes it an “unfair labor practice” for an employer to “interfere
with, restrain, or coerce” employees in the exercise of their §7
rights. 29 U. S. C. §158(a)(1). Beyond genuine dispute,
an employer “interfere[s] with” and “restrain[s]” employees in the
exercise of their §7 rights by mandating that they prospectively
renounce those rights in individual employment agreements.[
8] The law could hardly be otherwise:
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. See
National Licorice Co. v.
NLRB, 309 U. S. 350,
364 (1940). Properly assessed, then, the “waivers” rank as unfair
labor practices outlawed by the NLRA, and therefore unenforceable
in court. See
Kaiser Steel Corp. v.
Mullins, 455
U. S. 72, 77 (1982) (“[O]ur cases leave no doubt that illegal
promises will not be enforced in cases controlled by the federal
law.”).[
9]
II
Today’s decision rests largely on the Court’s
finding in the Arbitration Act “emphatic directions” to enforce
arbitration agreements according to their terms, including
collective-litigation prohibitions.
Ante, at 6. Nothing in
the FAA or this Court’s case law, however, requires subordination
of the NLRA’s protections. Before addressing the interaction
between the two laws, I briefly recall the FAA’s history and the
domain for which that Act was designed.
A
1
Prior to 1925, American courts routinely
declined to order specific performance of arbitration agreements.
See Cohen & Dayton, The New Federal Arbitration Law, 12 Va.
L. Rev. 265, 270 (1926). Growing backlogs in the courts, which
delayed the resolution of commercial disputes, prompted the
business community to seek legislation enabling merchants to enter
into binding arbitration agreements. See
id., at 265. The
business community’s aim was to secure to merchants an expeditious,
economical means of resolving their disputes. See
ibid. The
American Bar Association’s Committee on Commerce, Trade and
Commercial Law took up the reins in 1921, drafting the legislation
Congress enacted, with relatively few changes, four years later.
See Committee on Commerce, Trade & Commercial Law, The United
States Arbitration Law and Its Application, 11 A. B. A.
J. 153 (1925).
The legislative hearings and debate leading up
to the FAA’s passage evidence Congress’ aim to enable merchants of
roughly equal bargaining power to enter into binding agreements to
arbitrate
commercial disputes. See,
e.g., 65 Cong.
Rec. 11080 (1924) (remarks of Rep. Mills) (“This bill provides that
where there are commercial contracts and there is disagreement
under the contract, the court can [en]force an arbitration
agreement in the same way as other portions of the contract.”);
Joint Hearings on S. 1005 and H. R. 646 before the
Subcommittees of the Committees on the Judiciary, 68th Cong., 1st
Sess. (1924) (Joint Hearings) (consistently focusing on the need
for binding arbitration of commercial disputes).[
10]
The FAA’s legislative history also shows that
Congress did not intend the statute to apply to arbitration
provisions in employment contracts. In brief, when the legislation
was introduced, organized labor voiced concern. See Hearing on S.
4213 and S. 4214 before the Subcommittee of the Senate Committee on
the Judiciary, 67th Cong., 4th Sess., 9 (1923) (Hearing). Herbert
Hoover, then Secretary of Commerce, suggested that if there were
“objection[s]” to including “workers’ contracts in the law’s
scheme,” Congress could amend the legislation to say: “but nothing
herein contained shall apply to contracts of employment of seamen,
railroad employees, or any other class of workers engaged in
interstate or foreign commerce.”
Id., at 14. Congress
adopted Secretary Hoover’s suggestion virtually verbatim in §1 of
the Act, see Joint Hearings 2; 9 U. S. C. §1, and labor
expressed no further opposition, see H. R. Rep. No. 96, 68th Cong.,
1st Sess., 1 (1924).[
11]
Congress, it bears repetition, envisioned
application of the Arbitration Act to voluntary, negotiated
agreements. See,
e.g., 65 Cong. Rec. 1931 (remarks of Rep.
Graham) (the FAA provides an “opportunity to enforce
. . . an agreement to arbitrate, when voluntarily placed
in the document by the parties to it”). Congress never endorsed a
policy favoring arbitration where one party sets the terms of an
agreement while the other is left to “take it or leave it.” Hearing
9 (remarks of Sen. Walsh) (internal quotation marks omitted); see
Prima Paint Corp. v.
Flood & Conklin Mfg. Co.,
388 U. S. 395, 403, n. 9 (1967) (“We note that categories of
contracts otherwise within the Arbitration Act but in which one of
the parties characteristically has little bargaining power are
expressly excluded from the reach of the Act. See §1.”).
2
In recent decades, this Court has veered away
from Congress’ intent simply to afford merchants a speedy and
economical means of resolving commercial disputes. See Sternlight,
Panacea or Corporate Tool?: Debunking the Supreme Court’s
Preference for Binding Arbitration, 74 Wash. U. L. Q.
637, 644–674 (1996) (tracing the Court’s evolving interpretation of
the FAA’s scope). In 1983, the Court declared, for the first time
in the FAA’s then 58-year history, that the FAA evinces a “liberal
federal policy favoring arbitration.”
Moses H. Cone Memorial
Hospital v.
Mercury Constr. Corp., 460 U. S. 1, 24
(1983) (involving an arbitration agreement between a hospital and a
construction contractor). Soon thereafter, the Court ruled, in a
series of cases, that the FAA requires enforcement of agreements to
arbitrate not only contract claims, but statutory claims as well.
E.g., Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth,
Inc., 473 U. S. 614 (1985);
Shearson/American Express
Inc. v.
McMahon, 482 U. S. 220 (1987). Further, in
1991, the Court concluded in
Gilmer v.
Interstate/Johnson
Lane Corp., 500 U. S. 20, 23 (1991), that the FAA requires
enforcement of agreements to arbitrate claims arising under the Age
Discrimination in Employment Act of 1967, a workplace
antidiscrimination statute. Then, in 2001, the Court ruled in
Circuit City Stores, Inc. v.
Adams, 532 U. S.
105, 109 (2001), that the Arbitration Act’s exemption for
employment contracts should be construed narrowly, to exclude from
the Act’s scope only transportation workers’ contracts.
Employers have availed themselves of the
opportunity opened by court decisions expansively interpreting the
Arbitration Act. Few employers imposed arbitration agreements on
their employees in the early 1990’s. After
Gilmer and
Circuit City, however, employers’ exaction of arbitration
clauses in employment contracts grew steadily. See,
e.g.,
Economic Policy Institute (EPI), A. Colvin, The Growing Use of
Mandatory Arbitration 1–2, 4 (Sept. 27, 2017), available at
https://www.epi.org/files/pdf/135056.pdf (All Internet materials as
visited May 18, 2018) (data indicate only 2.1% of nonunionized
companies imposed mandatory arbitration agreements on their
employees in 1992, but 53.9% do today). Moreover, in response to
subsequent decisions addressing class arbitration,[
12] employers have increasingly included in
their arbitration agreements express group-action waivers. See Ruan
1129; Colvin,
supra, at 6 (estimating that 23.1% of
nonunionized employees are now subject to express class-action
waivers in mandatory arbitration agreements). It is, therefore,
this Court’s exorbitant application of the FAA—stretching it far
beyond contractual disputes between merchants—that led the NLRB to
confront, for the first time in 2012, the precise question whether
employers can use arbitration agreements to insulate themselves
from collective employment litigation. See
D. R. Horton, 357
N. L. R. B. 2277 (2012), enf. denied in relevant
part, 737 F. 3d 344 (CA5 2013). Compare
ante, at 3–4
(suggesting the Board broke new ground in 2012 when it concluded
that the NLRA prohibits employer-imposed arbitration agreements
that mandate individual arbitration) with
supra, at 10–11
(NLRB decisions recognizing a §7 right to engage in collective
employment litigation), and
supra, at 17, n. 8 (NLRB
decisions finding employer-dictated waivers of §7 rights
unlawful).
As I see it, in relatively recent years, the
Court’s Arbitration Act decisions have taken many wrong turns. Yet,
even accepting the Court’s decisions as they are, nothing compels
the destructive result the Court reaches today. Cf. R. Bork, The
Tempting of America 169 (1990) (“Judges . . . live on the
slippery slope of analogies; they are not supposed to ski it to the
bottom.”).
B
Through the Arbitration Act, Congress sought
“to make arbitration agreements as enforceable as other contracts,
but not more so.”
Prima Paint, 388 U. S., at 404, n.
12. Congress thus provided in §2 of the FAA that the terms of a
written arbitration agreement “shall be valid, irrevocable, and
enforceable,
save upon such grounds as exist at law or in equity
for the revocation of any contract.” 9 U. S. C. §2
(emphasis added). Pursuant to this “saving clause,” arbitration
agreements and terms may be invalidated based on “generally
applicable contract defenses, such as fraud, duress, or
unconscionability.”
Doctor’s Associates, Inc. v.
Casarotto, 517 U. S. 681, 687 (1996); see
ante,
at 7.
Illegality is a traditional, generally
applicable contract defense. See 5 R. Lord, Williston on Contracts
§12.1 (4th ed. 2009). “[A]uthorities from the earliest time to the
present unanimously hold that no court will lend its assistance in
any way towards carrying out the terms of an illegal contract.”
Kaiser Steel, 455 U. S., at 77 (quoting
McMullen
v.
Hoffman, 174 U. S. 639, 654 (1899)). For the reasons
stated
supra, at 8–17, I would hold that the arbitration
agreements’ employer-dictated collective-litigation waivers are
unlawful. By declining to enforce those adhesive waivers, courts
would place them on the same footing as any other contract
provision incompatible with controlling federal law. The FAA’s
saving clause can thus achieve harmonization of the FAA and the
NLRA without undermining federal labor policy.
The Court urges that our case law—most forcibly,
AT&T Mobility LLC v.
Concepcion, 563 U. S.
333 (2011)—rules out reconciliation of the NLRA and the FAA through
the latter’s saving clause. See
ante, at 6–9. I disagree.
True, the Court’s Arbitration Act decisions establish that the
saving clause “offers no refuge” for defenses that discriminate
against arbitration, “either by name or by more subtle methods.”
Ante, at 7. The Court, therefore, has rejected saving clause
salvage where state courts have invoked generally applicable
contract defenses to discriminate “covertly” against arbitration.
Kindred Nursing Centers L. P. v.
Clark,
581 U. S. ___, ___ (2017) (slip op., at 5). In
Concepcion, the Court held that the saving clause did not
spare the California Supreme Court’s invocation of
unconscionability doctrine to establish a rule blocking enforcement
of class-action waivers in adhesive consumer contracts. 563
U. S., at 341–344, 346–352. Class proceedings, the Court said,
would “sacrific[e] the principal advantage of arbitration—its
informality—and mak[e] the process slower, more costly, and more
likely to generate procedural morass than final judgment.”
Id., at 348. Accordingly, the Court concluded, the
California Supreme Court’s rule, though derived from
unconscionability doctrine, impermissibly disfavored arbitration,
and therefore could not stand.
Id., at 346–352.
Here, however, the Court is not asked to apply a
generally applicable contract defense to generate a rule
discriminating against arbitration. At issue is application of the
ordinarily superseding rule that “illegal promises will not be
enforced,”
Kaiser Steel, 455 U. S., at 77, to
invalidate arbitration provisions at odds with the NLRA, a
pathmarking federal statute. That statute neither discriminates
against arbitration on its face, nor by covert operation. It
requires invalidation of
all employer-imposed contractual
provisions prospectively waiving employees’ §7 rights. See
supra, at 17, and n. 8; cf.
Kindred Nursing Centers,
581 U. S., at ___, n. 2 (slip op., at 7, n. 2) (States may
enforce generally applicable rules so long as they do not “single
out arbitration” for disfavored treatment).
C
Even assuming that the FAA and the NLRA were
inharmonious, the NLRA should control. Enacted later in time, the
NLRA should qualify as “an implied repeal” of the FAA, to the
extent of any genuine conflict. See
Posadas v.
National
City Bank, 296 U. S. 497, 503 (1936). Moreover, the NLRA
should prevail as the more pinpointed, subject-matter specific
legislation, given that it speaks directly to group action by
employees to improve the terms and conditions of their employment.
See
Radzanower v.
Touche Ross & Co., 426
U. S. 148, 153 (1976) (“a specific statute” generally “will
not be controlled or nullified by a general one” (internal
quotation marks omitted)).[
13]
Citing statutory examples, the Court asserts
that when Congress wants to override the FAA, it does so expressly.
See
ante, at 13–14. The statutes the Court cites, however,
are of recent vintage.[
14]
Each was enacted during the time this Court’s decisions
increasingly alerted Congress that it would be wise to leave not
the slightest room for doubt if it wants to secure access to a
judicial forum or to provide a green light for group litigation
before an arbitrator or court. See
CompuCredit Corp. v.
Greenwood, 565 U. S. 95, 116 (2012) (Ginsburg, J.,
dissenting). The Congress that drafted the NLRA in 1935 was
scarcely on similar alert.
III
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. See generally
Sternlight, Disarming Employees: How American Employers Are Using
Mandatory Arbitration To Deprive Workers of Legal Protections, 80
Brooklyn L. Rev. 1309 (2015).
The probable impact on wage and hours claims of
the kind asserted in the cases now before the Court is all too
evident. Violations of minimum-wage and overtime laws are
widespread. See Ruan 1109–1111; A. Bernhardt et al., Broken
Laws, Unprotected Workers: Violations of Employment and Labor Laws
in America’s Cities 11–16, 21–22 (2009). One study estimated that
in Chicago, Los Angeles, and New York City alone, low-wage workers
lose nearly $3 billion in legally owed wages each year.
Id.,
at 6. The U. S. Department of Labor, state labor departments,
and state attorneys general can uncover and obtain recoveries for
some violations. See EPI, B. Meixell & R. Eisenbrey, An
Epidemic of Wage Theft Is Costing Workers Hundreds of Millions of
Dollars a Year 2 (2014), available at
https://www.epi.org/files/2014/wage-theft.pdf. Because of their
limited resources, however, government agencies must rely on
private parties to take a lead role in enforcing wage and hours
laws. See Brief for State of Maryland et al. as
Amici
Curiae 29–33; Glover, The Structural Role of Private
Enforcement Mechanisms in Public Law, 53 Wm. & Mary
L. Rev. 1137, 1150–1151 (2012) (Department of Labor
investigates fewer than 1% of FLSA-covered employers each
year).
If employers can stave off collective employment
litigation aimed at obtaining redress for wage and hours
infractions, the enforcement gap is almost certain to widen.
Expenses entailed in mounting individual claims will often far
outweigh potential recoveries. See
id., at 1184–1185
(because “the FLSA systematically tends to generate low-value
claims,” “mechanisms that facilitate the economics of claiming are
required”);
Sutherland v.
Ernst & Young LLP, 768
F. Supp. 2d 547, 552 (SDNY 2011) (finding that an employee
utilizing Ernst & Young’s arbitration program would likely have
to spend $200,000 to recover only $1,867.02 in overtime pay and an
equivalent amount in liquidated damages); cf. Resnik, Diffusing
Disputes: The Public in the Private of Arbitration, the Private in
Courts, and the Erasure of Rights, 124 Yale L. J. 2804, 2904 (2015)
(analyzing available data from the consumer context to conclude
that “private enforcement of small-value claims depends on
collective, rather than individual, action”);
Amchem Products,
Inc. v.
Windsor, 521 U. S. 591, 617 (1997) (class
actions help “overcome the problem that small recoveries do not
provide the incentive for any individual to bring a solo action
prosecuting his or her rights” (internal quotation marks
omitted)).[
15]
Fear of retaliation may also deter potential
claimants from seeking redress alone. See,
e.g., Ruan
1119–1121; Bernhardt,
supra, at 3, 24–25. Further inhibiting
single-file claims is the slim relief obtainable, even of the
injunctive kind. See
Califano v.
Yamasaki, 442
U. S. 682, 702 (1979) (“[T]he scope of injunctive relief is
dictated by the extent of the violation established.”). The upshot:
Employers, aware that employees will be disinclined to pursue
small-value claims when confined to proceeding one-by-one, will no
doubt perceive that the cost-benefit balance of underpaying workers
tips heavily in favor of skirting legal obligations.
In stark contrast to today’s decision,[
16] the Court has repeatedly
recognized the centrality of group action to the effective
enforcement of antidiscrimination statutes. With Court approbation,
concerted legal actions have played a critical role in enforcing
prohibitions against workplace discrimination based on race, sex,
and other protected characteristics. See,
e.g., Griggs v.
Duke Power Co., 401 U. S. 424 (1971);
Automobile
Workers v.
Johnson Controls, Inc., 499 U. S. 187
(1991). In this context, the Court has comprehended that government
entities charged with enforcing antidiscrimination statutes are
unlikely to be funded at levels that could even begin to compensate
for a significant dropoff in private enforcement efforts. See
Newman v.
Piggie Park Enterprises, Inc., 390
U. S. 400, 401 (1968) (
per curiam) (“When the Civil
Rights Act of 1964 was passed, it was evident that enforcement
would prove difficult and that the Nation would have to rely in
part upon private litigation as a means of securing broad
compliance with the law.”). That reality, as just noted, holds true
for enforcement of wage and hours laws. See
supra, at
27.
I do not read the Court’s opinion to place in
jeopardy discrimination complaints asserting disparate-impact and
pattern-or-practice claims that call for proof on a groupwide
basis, see Brief for NAACP Legal Defense & Educational Fund,
Inc., et al. as
Amici Curiae 19–25, which some courts
have concluded cannot be maintained by solo complainants, see,
e.g., Chin v.
Port Auth. of N. Y. &
N. J., 685 F. 3d 135, 147 (CA2 2012)
(pattern-or-practice method of proving race discrimination is
unavailable in non-class actions). It would be grossly exorbitant
to read the FAA to devastate Title VII of the Civil Rights Act of
1964, 42 U. S. C. §2000e
et seq., and other
laws enacted to eliminate, root and branch, class-based employment
discrimination, see
Albemarle Paper Co. v.
Moody, 422
U. S. 405, 417, 421 (1975). With fidelity to the Legislature’s
will, the Court could hardly hold otherwise.
I note, finally, that individual arbitration of
employee complaints can give rise to anomalous results. Arbitration
agreements often include provisions requiring that outcomes be kept
confidential or barring arbitrators from giving prior proceedings
precedential effect. See,
e.g., App. to Pet. for Cert. in
No. 16–285, p. 34a (Epic’s agreement); App. in No. 16–300, p. 46
(Ernst & Young’s agreement). As a result, arbitrators may
render conflicting awards in cases involving similarly situated
employees—even employees working for the same employer. Arbitrators
may resolve differently such questions as whether certain jobs are
exempt from overtime laws. Cf.
Encino Motor Cars, LLC v.
Navarro,
ante, p. ___ (Court divides on whether
“service advisors” are exempt from overtime-pay requirements). With
confidentiality and no-precedential-value provisions operative,
irreconcilable answers would remain unchecked.
* * *
If these untoward consequences stemmed from
legislative choices, I would be obliged to accede to them. But the
edict that employees with wage and hours claims may seek relief
only one-by-one does not come from Congress. It is the result of
take-it-or-leave-it labor contracts harking back to the type called
“yellow dog,” and of the readiness of this Court to enforce those
unbargained-for agreements. The FAA demands no such suppression of
the right of workers to take concerted action for their “mutual aid
or protection.” Accordingly, I would reverse the judgment of the
Fifth Circuit in No. 16–307 and affirm the judgments of the Seventh
and Ninth Circuits in Nos. 16–285 and 16–300.