In Wake of Rare Pro-Worker Supreme Court Ruling on Mandatory Arbitration, Open Markets Calls on Congress to Restore Strong Private Rights of Action for Workers, Consumers, and Businesses
January 18, 2019
WASHINGTON, DC — The Open Markets Institute welcomes the unanimous ruling this week by the Supreme Court of the United States in New Prime Inc. v. Oliveira. In an uncommon high court win for plaintiffs challenging mandatory arbitration clauses, the Court ruled that the Federal Arbitration Act’s exclusion for transportation workers covers both employees and independent contractors. This means one class of workers cannot be compelled to arbitrate legal disputes with their employers or waive their right to bring class action lawsuits against employers.
However, last week, the Supreme Court issued another unanimous ruling on arbitration—one that will harm workers, consumers, and businesses. Open Markets denounces the decision in Henry Schein Inc. v. Archer and White Sales Inc. The underlying question addressed was: when a court believes a particular dispute falls clearly outside the purview of arbitration, who gets to decide whether the dispute should be resolved through litigation rather than arbitration? In its ruling, the Court granted more power to arbitrators, ruling that they—and not judges—should decide whether a dispute goes to arbitration.
Open Markets believes that reestablishing the right of workers, consumers, and business to litigate cases on a collective basis is essential for taming the excesses of concentrated corporate power. In a series of decisions dating back to the early 1980s, the Supreme Court has granted corporations carte blanche to enforce arbitration clauses against consumers, workers, and businesses, depriving them of access to courts and collective action. In practice, the proliferation of forced arbitration clauses enables companies to shield themselves from liability—and sidestep entire areas of law, including employment law, civil rights law, consumer law, and antitrust. These arbitration cases are part of a broader pattern at the Supreme Court, which has also introduced a host of procedural hurdles to further prevent individuals from vindicating their rights.
We call on Congress to end forced arbitration and overturn other Supreme Court-created obstacles to class actions and other private litigation. Congress must restore the right of Americans to band together and hold powerful corporations accountable.