The Supreme Court — or, at least, its Republican majority — has an unhealthy obsession with forced arbitration. And, in a decision handed down on Wednesday, the court fed that obsession at the expense of workers throughout the country.
Chief Justice John Roberts’ opinion in the case in question, Lamps Plus v. Varela, relies on a definition of the word “consent” so bizarre, it verges on gaslighting. In a rare move, every single Democratic justice wrote a dissent — including Justice Ruth Bader Ginsburg, whose dissent directly confronts Roberts’ weak understanding of the concept of consent.
Forced arbitration agreements require workers or consumers to sign away their right to sue a company in a real court as a condition of doing business with that company. A customer who refuses to sign would be denied a credit card, a cell phone, or even the ability to check their loved one into a nursing home. And, as the court’s Republican majority held in Epic Systems v. Lewis, a worker can be forced to sign under pain of firing.
Victims of forced arbitration may still bring claims against the company that forced them into the agreement, but these claims must be brought before private arbitrators who are far more favorable to corporate parties than judges. As one study shows, employees are much less likely to prevail before an arbitrator than before a court, and they generally receive far less money when they do prevail.
The Supreme Court’s arbitration decisions often rely on such grotesque readings of federal law that it is hard not to suspect the judges in the majority of bad faith.
The Federal Arbitration Act, for example, exempts “workers engaged in foreign or interstate commerce.” Yet in Circuit City v. Adams, a 5-4 Supreme Court held that the Arbitration Act applies to contracts of employment involving workers engaged in foreign or interstate commerce.
Similarly, the Arbitration Act is silent on the subject of class-action lawsuits. Yet in AT&T Mobility v. Concepcion, a 5-4 court held that the Arbitration Act protects forced arbitration agreements that ban class actions.
And again, in Epic Systems, the Republican majority held that a company can impose a forced arbitration agreement on its entire workforce under pain of termination.
Roberts’ opinion in Lamps Plus builds on these three decisions, holding that if it is unclear whether a forced arbitration provision permits class actions, the agreement should be read to forbid such claims. The case involves 1,300 workers whose employer turned over their private financial information to a hacker. Most of the company’s employees signed forced arbitration agreements.
In ruling against these employees, Roberts makes an astounding claim on behalf of his court. “‘[T]he first principle that underscores all of our arbitration decisions,'” the Chief claims, “is that ‘[a]rbitration is strictly a matter of consent.'” In Roberts’ view, because the employees signed an arbitration agreement, they therefore must have consented to it — and must be bound by its terms.
But Roberts’ understanding of the word “consent” is absurd. As Justice Ginsburg explains in her dissent, the Supreme Court’s precedents “may preclude judicial remedies even when submission to arbitration is made a take-it-or-leave-it condition of employment or is imposed on a consumer given no genuine choice in the matter.” Workers must “accept arbitration on their employer’s terms or give up their jobs.”
If workers “consent” to forced arbitration, it is the consent of jus primae noctis. It is the consent of a conquered nation that, having seen its armies vanquished, agrees to be ruled by a foreign king. It is the consent of a man who agrees to give up his wallet at gunpoint.
The notion that consent achieved through coercion is no consent at all should not be a difficult concept for five of the most powerful lawyers in the country to understand. And yet this notion escapes all five of the Supreme Court’s Republicans.
The implications of the court’s forced arbitration decisions are breathtaking. The notion that some rights are unwaivable is implicit in the very idea of the rule of law. What use is a ban on sexual harassment, or a law prohibiting race discrimination, or a minimum wage, if every employer can force their workers to waive their rights under these laws as a condition of employment?
The practical effect of the court’s forced arbitration decisions is that many workers and consumers must sign away their rights altogether. Consider, for example, the Concepcion case, which involved a cell phone company that allegedly overcharged its customers by $30.22.
The holding of Concepcion is that these consumers may not join together in a class-action lawsuit to sue that cell phone company, because of a forced arbitration clause banning class actions. But if the customers cannot join together in a single lawsuit, the company gets off scot free. No one — or, at least, no one with any sense — will file a $30.22 claim because the cost of bringing such a claim will massively exceed the amount of money at stake.
Good lawyers are expensive. They charge hundreds of dollars an hour, or they require their clients to pay them a percentage of their winnings. As a result, a company that imposes a forced arbitration clause with a class-action ban on its workers can potentially cheat each worker out of thousands of dollars in wages. Few workers will bring a claim, because the cost of hiring a lawyer on an hourly basis will exceed the amount of money at stake, and no lawyer will agree to work for a percentage of the client’s winnings because those winnings will be so small.
No worker who understands how this scam works would consent to it. And few workers actually do. But their lack of consent doesn’t matter in this Supreme Court. For the Court’s Republican majority, consent can be obtained at gunpoint.