Law Firm on How High Court’s Latest Decision Hobbling Class Actions is ‘Music for the Ears of Employers’

Law firms devoted to the interests of large corporations are not surprisingly taking advantage of a road being forged by the Supreme Court’s conservative wing to hobble efforts of consumers and workers to challenge corporate malfeasance.

Reporting on the high court’s recent opinion in AT&T v. Concepcion, in which the high court’s conservative wing led by Justice Antonin Scalia shut down a consumer led-class action lawsuit against one of the nation’s largest telecommunications companies,The New York Times noted, “Though the decision concerned arbitrations, it appeared to provide businesses with a way to avoid class-action lawsuits in court. All they need do, the decision suggested, is use standard-form contracts that require two things: that disputes be raised only through the informal mechanism of arbitration and that claims be brought one by one.”

In May 10 “newsletter” produced by Foley & Lardner LLP, John Douglas suggests that big employers should take advantage of the Concepcion opinion, and notes that the same conservative majority appears ready to continue protecting corporate interests, citing recent oral argument in Wal-Mart Stores, Inc. v. Dukes involving the nation’s largest worker class-action lawsuit alleging discrimination against the retailing giant.  

Douglas writes:

Based on the behavior of the Justices during the oral argument [in Wal-Mart v. Dukes] of the case (http://tinyurl.com/3g4sxjk), it is already expected that the Supreme Court's upcoming decision involving a nationwide class action against Wal-Mart may throw some sand in the gears of a current juggernaut of class actions already attempting to raise claims of systemic discrimination based on sex and race. AT&T Mobility does the same thing. Particularly in the area of wage and hour class actions, AT&T Mobility should provide some long-awaited music for the ears of employers swamped by wave after wave of wage and hour class actions raising ever more technical, and “creative,” legal theories.

How is this? Simply put, at least potentially, every employer big enough to face significant class action litigation risk (generally those with more than a couple dozen employees) can now have its employees sign an agreement to arbitrate as a condition of employment — and furthermore, require that any claim brought in arbitration be an individual one.

As noted here earlier, Constitutional law scholar and professor Erwin Chemerinsky in a piece for the Los Angeles Times blasted the Concepcion majority as “favoring the interests of businesses over consumers, employees and others suffering injuries.”