This summer, the Supreme Court ruled on two prominent labor cases. The results are a major blow for working people, and a good indication of what future decisions will look like with an additional Trump appointee on the Court.
Epic Systems v. Lewis
Epic Systems v. Lewis determined that companies can legally obligate workers to sign “class-action waivers” that prevent employees from joining a collective lawsuit against their employer.
The case hinged on the interpretation of two different pieces of legislation, the Federal Arbitration Act (FAA) and the National Labor Relations Act (NLRA). The FAA provides for arbitration agreements that are “irrevocable and enforceable.” But the NLRA says employees have a right to engage in “concerted activities” for “mutual aid or protection.” So if an arbitration agreement prevents an employee from joining a class action lawsuit, does that violate the NLRA? In a 5-4 decision, the Court’s conservative majority said no.
What’s wrong with employees going through arbitration rather than a class-action lawsuit? First, arbitration tends to benefit the employer. Second, a single employee might not feel the risks and rewards of a lawsuit are worth it unless they can join with other employees in a class-action case. For instance, if an employee thought they have experienced salary discrimination as a result of her race or gender, as an individual she would have to weigh the value of her own back pay against the career consequences of suing her employer. In a class-action context, an employee might feel the risks were fewer, because more employees are involved, and might also rate the benefit more highly, since they would extend to others as well.
Stripping individual employees of the ability to pursue collective arbitration has major implications for the future of the American workforce. There are already an estimated 60.1 million American workers who have signed class-action waivers that would force them into individual arbitration proceedings. The Epic Systems decision isolates individuals in the workplace and diminishes their access to collective action.
Janus v. AFSCME
At issue in Janus v. AFSCME were the “agency fees” that public sector unions in 22 states charged all workers who benefitted from the union’s collective bargaining and other workplace services.
The plaintiff’s argument, largely accepted by the five conservative judges, was that this fee amounted to a free speech violation for the worker. To be clear, workers were already allowed to opt out of union membership, and to opt out of paying for a union’s explicitly political activities. But Janus argued that, because public sector unions are by definition negotiating with the government, even workplace negotiations over hours or wages amount to political speech. So, a worker who opposed the union’s collective bargaining efforts was having his or her First Amendment rights violated.
Until Janus, the Supreme Court did not find this argument compelling. In the 1977 Abood v. Detroit Board of Education, the court unanimously found that “A public employee who believes that a union representing him is urging a course that is unwise as a matter of public policy is not barred from expressing his viewpoint.” But in 2018, a majority of the Court reversed course, concluding that Abood was “wrongly decided.”
What does this mean for unions? An enormous free-rider problem. Now that workers will get the benefits of union membership without paying dues or fees, unions risk a substantial drop in the funds the union receives. Imagine if a sandwich shop were required to provide meals to anyone who came through the door, but only allowed to charge a “suggested donation.” It might work, but a lot of people also might decide to enjoy a free lunch. Unions are, reasonably enough, expecting a drop in revenue.
Unions have traditionally raised money and turned out voters for Democratic Party candidates, so the decision is also scary news for Democrats. Looking at the impact of state-level laws that banned agency fees for public and private sector workers, James Feigenbaum, Alexander Hertel Fernandez and I found that in presidential elections, they cost Democratic candidates 2 to 5 percentage points. We also found a sharp drop in voter turnout and in the frequency with which people from blue-collar backgrounds get elected to office.
Senior Fellow - Governance Studies
Senior Fellow - Urban-Brookings Tax Policy Center
Of course, unions are scrambling to limit these effects, and the remarkable wave of teacher strikes in red states like Oklahoma suggest that unions can still win in inauspicious political environments. But if unions respond the way they usually do when states have banned agency fees, they will shift their resources to shoring up membership, rather than engaging in political mobilization. In overturning the Abood decision on workers’ free speech, Janus stifles the political voice of working people.
The net effect of these two rulings is to limit the capacity of working people to coordinate for better treatment from their employers. With the likelihood of an additional conservative judge on the Court, we can expect future rulings to continue this trend.
The upshot is an environment in which the leaders of the world’s most powerful democracies have to engage with an ever more challenging world, even as they’re on shaky ground at home. This can fuel doubts among our allies and overconfidence among our adversaries, and leave us all more vulnerable as a result.