According to The New York Times, the Supreme Court ruled on Wednesday that employees of a California business couldn’t work together to seek compensation for their what they allege was their employer’s failure to protect their data. The Supreme Court vote was 5 to 4, with the conservative members in the majority.
This decision was another in a string of wins for corporations. Rulings such as these can make it increasingly difficult for consumers and workers to pursue minor claims.
Wednesday’s decision, Lamps Plus v. Varela, began in 2016 when a hacker who claimed to be a company official asked an employee to Lamps Plus to disclose tax filings for about 1,300 employees. The information obtained by the hacker was then used to file a fraudulent tax return in the name of an employee at Lamps Plus, Frank Varela.
Varela is required to resolve his disputes with Lamps Plus through arbitration, due to an employment agreement he had signed. Yet, he went to court and filed a class-action suit against Lamps Plus.
The company asked that the judge send the case to arbitration and require Varela to pursue a claim on his behalf only, and not on the behalf of other employees. While the judge agreed to the first request, the judge said class arbitration was allowed by the employment agreement’s arbitration clause. The clause said that “arbitration shall be in lieu of any and all lawsuits or other civil legal proceedings relating to my employment.”
The majority opinion said the language authorizes workers could ban together. “A reasonable — and perhaps the most reasonable — interpretation of this expansive language is that it authorizes class arbitration,” the majority said.
Judge Ferdinand F. Fernandez dissented, saying the majority engaged in “palpable evasion” of the Supreme Court’s 2010 decision that it was not lawful to require class arbitration when the arbitration agreement never discusses the matter.
Chief Justice John G. Roberts Jr. said the 2010 decision resolved the case. Because Varela and Lamps Plus hasn’t agreed to class arbitration, only individual arbitrations were permitted.
The court’s four liberal members wrote dissents. Justice Ruth Bader Ginsburg said the decision was the latest effort by the court “to deny employees and consumers ‘effective relief against powerful economic entities.’”
“Propelled by the court’s decisions,” Justice Ginsburg wrote, “mandatory arbitration clauses in employment and consumer contracts have proliferated.”
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