In a case involving Verona health software giant Epic Systems, a divided Supreme Court ruled Monday that businesses can prohibit their workers from banding together in disputes over pay and conditions in the workplace.
The decision has ramifications far beyond Epic, affecting an estimated 25 million non-unionized employees. While the complaints in Monday’s decision involved pay, the outcome also might extend to workplace discrimination and other disputes if employee contracts specify that they must be dealt with in one-on-one arbitration.
Lawyers representing management said the decision protects businesses from endless, costly litigation. The ruling reflected a years-long pattern at the Supreme Court of limiting class actions and favoring employer-favored arbitration over lawsuits in the courts, generally preferred by workers.
The high court’s task was to reconcile federal laws that seemed to point in different directions. On the one hand, New Deal labor laws explicitly give workers the right to band together. On the other, the older Federal Arbitration Act encourages the use of arbitration, instead of the courts.