The Dilemma of the Black Athlete as Activist

by Gregg Ivers, Professor of Government, American University

In early September 1957, Central High School in Little Rock became the focus of world-wide attention when Arkansas Governor Orval Faubus decided to deploy the National Guard to prevent the nine African American students who had applied and been chosen to integrate the school from entering the building. For a three week period, the Central High grounds resembled the set of a science fiction film of the era – upright American soldiers with bayonet-tipped rifles protecting innocent children from an alien force in their midst. Finally, on September 25th, the Little Rock Nine, now with the support of a federalized Arkansas National Guard and the 101st Airborne Division – activated and sent to Little Rock by President Dwight D. Eisenhower – were escorted into Central High to begin a school year that they and everyone else in Little Rock would never forget.

The Little Rock crisis did not escape the attention of former Brooklyn Dodger Jackie Robinson. Just over nine years before, Robinson entered, almost overnight, into the lives of white America when he became the first African American to penetrate one of the most sacrosanct citadels of white supremacy – professional baseball. On April 15th, 1947, when Robinson jogged to first base on Opening Day at Ebbets Field, he did more than just break the color barrier in what was then America’s most popular sport. He destroyed it.

Largely forgotten in the retelling of the Jackie Robinson story is that of the 26,623 fans that attended Robinson’s first game, about 5,000 short of a sell-out, an estimated 14,000 were black. In one day, more black fans attended a Brooklyn Dodgers game than in the franchise’s entire existence. That year, the Dodgers set an attendance record at home, as their fans embraced their new hero. They also became the sport’s leading draw on the road. This was hardly a coincidence.

By the end of his first season, only the most hard-core segregationists failed to embrace Robinson’s remarkable combination of determination, courage, intelligence and athleticism. He was named Rookie of the Year, the first year the award was given out, and was feted with gifts in an end of the year ceremony at Ebbets Field. As Jules Tygiel wrote in Baseball’s Great Experiment, “For blacks, Robinson became a symbol of pride and dignity; to whites, he represented a type of black man far removed from the prevailing stereotypes, whom they could not help but respect.”

But then something happened along the way that changed the public’s perception of Robinson as a grateful black man just happy to have the opportunity to play baseball with whites – the real Jackie Robinson emerged. The Jackie Robinson that baseball fans and sportswriters thought they knew was not the man that Branch Rickey selected to break the color barrier. Robinson never accepted Jim Crow, whether in his occasional run-ins with white authorities while growing up in Pasadena and attending college at UCLA over the restrictions placed on blacks. Most famously, in 1944, Robinson was court-martialed at Fort Hood, Texas, when he refused to sit in the back of a military bus. He was later acquitted.

After his second year with the Dodgers, Robinson began fighting back, in accord with the terms that Rickey had established when he signed with the Dodgers in 1945. On the field, he challenged umpires, confronted opponents who played dirty against him and began to make public statements about the difficulties that blacks faced in baseball and in American society. Had he been white, Robinson would have been lauded as a gamer and a competitor.

Instead, the press began to turn on him, suggesting that he wasn’t grateful for the opportunities he had been “given.” Outside of Brooklyn, Robinson’s popularity steadily diminished. White America embraced black players like Willie Mays, Hank Aaron and Larry Doby, none of whom ever, at that point, publicly discussed race. By the time he retired in 1956, Robinson was perhaps the most unpopular man in baseball.

After almost six weeks of unprecedented drama at Central High, Robinson had seen enough. Having become the NAACP’s most prominent fund-raiser and public spokesman shortly after his retirement in 1956, Robinson worked with Arkansas NAACP officer Daisy Bates to arrange a phone call to the students. On October 17th – 59 years ago – Robinson spoke to seven of the Little Rock Nine and a few of their parents. A transcript of this conversation, which I recently read in his papers held at the Library of Congress, make clear Robinson’s stature among African Americans. One of the black students, Terrence Roberts, told Robinson, “I would like to say that what we are doing is only following the example you gave us, which is a very fine one, and we are trying to follow in your footsteps.

By the early 1960s, shortly after he was inducted into the Hall of Fame, Robinson turned his back on the game he revolutionized, claiming there was no place for him in baseball anymore. He had long become a fixture in the civil rights movement, raising money, participating in the March on Washington and supporting desegregation and voting rights efforts in the Deep South. His papers contain some of the many letters Robinson would write every living president of his post-baseball lifetime, imploring them in frank terms to take action on the various civil rights causes.

Robinson was, in many ways, a broken man when he died in 1972, remembered as the man who integrated white professional baseball, not as a civil rights activist who used baseball to pursue racial justice.

Today, however, Robinson is universally revered, admired as much for his courage as for the excitement he brought to the game. In 1997, Major League Baseball announced that Robinson’s number, 42, would be retired throughout the sport, an honor no other player has ever received.  Recent books and documentaries delve much deeper into Robinson’s civil rights activism the courageous civil rights advocate and praise him for his example and his willingness to use his celebrity to advance racial fairness.

African American Athletes who followed in Robinson’s wake, such as Muhammad Ali, experienced as similar demise in their popularity when they began to speak out on civil rights matters. Claiming conscientious objector status after he was drafted to serve in Vietnam, Ali was banished from boxing for almost four years and widely condemned by sportswriters and a public who loved the young, playful Cassius Clay. Yet, upon his death in 2016, Ali somehow was only remembered as a courageous, principled humanitarian whose position was borne out by a Supreme Court decision exonerating his position.

Twenty years from now, Colin Kaepernick may or may not be remembered for the protest he started when he refused to stand for the national anthem during an NFL pre-season game last year. But people will remember how Kaepernick’s protest slowly took on a life of its own, spreading to other sports and down the chain to colleges, high schools and youth programs. Obviously, Kaepernick’s message has resonated with minority athletes. A growing number of white athletes have supported their non-white teammates, having a better view of a black athlete’s life than many of those who have criticized Kaepernick’s position as selfish. This includes, not surprisingly, the current president, who believes that the First Amendment protects the rights of white Christian supremacists, unrepentant Confederate sympathizers and neo-Nazis, but not those who speak out against them in peaceful fashion.

Jackie Robinson was not just the first African American to integrate white professional baseball. He was the first athlete, regardless of race, to use his status and celebrity to engage the political world and speak out against racism in sports and society. For the black athlete, speaking out has been both a burden and a necessity – something they’re expected to do because they’re black, and yet something they need to do because they’re black. White America has no problem accepting the black athlete and hasn’t for some time, as long as they put the ball in the hoop, the end zone or in the stands. Extending that respect to black athletes as men is the next step.

Professor Ivers is currently working on a book, "Swingin' at Jim Crow: How Jazz Became a Civil Rights Movement". 

Forced arbitration is bad for consumers

*This piece originally appeared on the EPI blog.

by Heidi Shierholz, Senior Economist and Director of Policy, Economic Policy Institute

Many financial institutions use forced arbitration clauses in their contracts to block consumers with disputes from banding together in court, instead requiring consumers to argue their cases separately in private arbitration proceedings. Embattled banking giant, Wells Fargo, made headlines by embracing the practice to avoid offering class-wide relief for its practices related to the fraudulent account scandal and another scandal involving alleged unfair overdraft practices.

New data helps illuminate why these banks—and Wells Fargo in particular—prefer forced arbitration to class action lawsuits. We already knew that consumers obtain relief regarding their claims in just 9 percent of disputes, while arbitrators grant companies relief in 93 percent of their claims. But not only do companies win the overwhelming majority of claims when consumers are forced into arbitration—they win big.

Some crucial background helps illustrate the stakes. In July 2017, the Consumer Financial Protection Bureau (CFPB) issued a final rule to restore consumers’ ability to join together in class action lawsuits against financial institutions. Based on five years of careful study, the final rule stems from a congressional directive instructing the agency to study forced arbitration and restrict or ban the practice if it harms consumers.

In recent weeks, members of Congress have introduced legislation to repeal the CFPB rule and take away consumers’ newly restored right to band together in court. Opponents of the rule have suggested that the bureau’s own findings show consumers on average receive greater relief in arbitration ($5,389) than class action lawsuits ($32). As we have previously shown, this is enormously misleading. While the average consumer who wins a claim in arbitration recovers $5,389, this is not even close to a typical consumer outcome. Because consumers win so rarely, the average consumer ends up paying financial institutions in arbitration—a whopping $7,725.

A recent report released by the nonprofit Level Playing Field hones in on Wells Fargo’s use of arbitration in consumer claims. Compiling publicly reported data from the American Arbitration Association (AAA) and JAMS (initially named Judicial Arbitration and Mediation Services, Inc.), the report found that just 250 consumers arbitrated claims with Wells Fargo between 2009 and the first half of 2017.1 This number is surprisingly small, since this period spans the prime years of the bank’s fraudulent account scandal.

But we can take this data a step further by looking at Wells Fargo’s overall gains and losses in arbitration. As one might suspect based on the CFPB data, Wells Fargo indeed won more money in arbitration between 2009 and the first half of 2017 than it paid out to consumers, despite creating 3.5 million fraudulent accounts during that same period.

What is even more troubling is that forced arbitration seems to be significantly more lucrative for Wells Fargo than for other financial institutions. In arbitration with Wells Fargo, the average consumer is ordered to pay the bank nearly $11,000. We calculated a mean of $10,826 awarded to the bank across all claims in the Level Playing Field report.

No wonder Wells Fargo prefers forced arbitration to class action lawsuits, which return at least $440 million, after deducting all attorneys’ fees and court costs, to 6.8 million consumers in an average year. Banning consumer class actions lets financial institutions keep hundreds of millions of dollars that would otherwise go back to harmed consumers—and Wells Fargo seems to have harmed huge numbers of consumers.

Opponents of the CFPB’s arbitration rule argue that allowing consumers to join together in court will increase consumer costs and decrease available credit. Most recently, the Office of the Comptroller of the Currency (OCC) claimed that restoring consumers’ right to join together in court could cause interest rates on credit cards to rise as much as 25 percent.

However, examining the OCC’s study, it appears the agency merely duplicated the conclusion reached by the CFPB and based its 25 percent estimate solely on results it admits are “statistically insignificant at the 95 percent (and 90 percent) confidence level.” In its 2015 study, the CFPB considered this same data and accurately assessed that there was no “statistically significant evidence of an increase in prices among those companies that dropped their arbitration clauses.”

Perhaps more importantly, claims that the arbitration rule will increase consumer and credit costs are also contradicted by real-life experience. Consumers saw no increase in prices after Bank of America, JPMorgan Chase, Capital One, and HSBC dropped their arbitration clauses as a result of court-approved settlements, and mortgage rates did not increase after Congress banned forced arbitration in the mortgage market. Of course, many would argue that banks like Wells Fargo shouldbear any increase in cost associated with making consumers whole for egregious misconduct.

Once again, the numbers are clear: class actions return hundreds of millions in relief to consumers, while forced arbitration pays off big for lawbreakers like Wells Fargo.

Endnotes

1.To my knowledge, AAA and JAMS are the only firms that routinely provide arbitration services to Wells Fargo. In arbitration agreements, Wells Fargo typically designates AAA as the arbitration firm to arbitrate any consumer dispute.

 

Supreme Court Should Reject Corporate Impunity for Financing Terrorism

by John M. Eubanks, Member, Motley Rice LLC, Petitioners’ Counsel in Jesner v. Arab Bank

Imagine a situation where an international bank with a presence in Manhattan holds accounts for known terrorists and serves as the end-payor to beneficiaries of a fund created for the explicit purpose of supporting an armed uprising typified by suicide bombings and indiscriminate killing of civilians carried out by known terrorist organizations with whom the bank’s accountholders are directly affiliated. Then, picture this international bank being immune from lawsuits filed by the victims of these suicide bombings and indiscriminate killings solely on the basis of its corporate form. This is precisely the issue with which the Supreme Court will grapple in Jesner v. Arab Bank, to be argued before the Court on October 11, 2017.

Jesner addresses the same question that was raised in Kiobel v. Royal Dutch Petroleum Co. during the October Term 2011. That question is whether the Alien Tort Statute (ATS),  creates a categorical bar to corporate liability for violations of the law of nations, or customary international law. The U.S. Court of Appeals for the Second Circuit – from which this appeal came – is the only federal court of appeals to determine that corporations are immune from the reach of the ATS, finding itself in conflict with the U.S. Courts of Appeals for the Seventh, Ninth, Eleventh, and District of Columbia Circuits. While the Supreme Court had the opportunity to decide this issue in Kiobel, the Court instead answered a distinct question of whether claims under the ATS are subject to the presumption against extraterritoriality – that is, laws do not cover conduct that takes part outside the territorial confines of the United States absent explicit language to that effect. The Supreme Court carved out a test for overcoming this presumption under the ATS – “where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application.”

Assuming the presumption against extraterritoriality is displaced, the question becomes – do we want corporations to be able to violate customary international law, including human rights law, with impunity? The language of the ATS does not explicitly exempt corporations. In fact, the text of the statute is only 33 words long. It specifically lays out who can sue (“an alien”), but it provides no limitation for who can be sued. Under standard statutory interpretation, the ATS – as the Supreme Court noted in 1989 – “does not distinguish among classes of defendants.” In other words, if Congress sought to limit the scope of potential defendants in a statute, it knew how to do so, and it did not do that in the ATS. In fact, the use of the word “tort” to describe the type of action immediately invokes the concept of corporate liability as corporations have been liable for tort actions since long before the United States became a country. And as the Supreme Court has held, “when Congress creates a tort action, it legislates against a legal background of ordinary tort-related … liability rules and consequently intends its legislation to incorporate those rules.” One of those rules is this long-held concept of corporate liability for torts.

While seemingly cut-and-dried from a statutory interpretation standpoint, a 2004 Supreme Court case helped create the corporate immunity split in law. In Sosa v. Alvarez-Machain, the Supreme Court held that the ATS provided jurisdiction in the federal courts for a modest number of violations of customary international law that were well-established norms on par with norms that existed when the ATS was first enacted in 1789. However, the decision also included a discussion on violations of customary international law that could only be committed by sovereigns and those that could be committed by “private actors.”  In addressing this difference, footnote 20 of the opinion stated that “[a] related consideration is whether international law extends the scope of liability for a violation of a given norm to the perpetrator being sued, if the defendant is a private actor such as a corporation or individual.”  While this footnote clearly grouped both corporations and individuals under the heading of “private actors” as opposed to sovereigns, the Second Circuit determined that this footnote required that international law must recognize claims against corporations for violations of the law of nations in order to provide ATS jurisdiction.

The application of customary international law in the criminal context against private actors began in its current form in the post-World War II Nuremberg proceedings where an international tribunal was convened to adjudicate claims against individuals within the Nazi regime for having participated in, among others, crimes against humanity and war crimes. In these criminal proceedings, the defendants were limited to natural persons rather than corporations (or “juridical entities”). The trend of permitting international criminal tribunals to have jurisdiction solely over individuals and not over corporations has continued to this day through such modern international criminal tribunals as the International Criminal Court, the International Criminal Tribunal for the Former Yugoslavia, and the International Criminal Tribunal for Rwanda. The reasons for why these criminal tribunals limit their scope to the actions of individuals are complicated, but they revolve around a singular concept – corporations cannot be incarcerated, and the various countries who establish these tribunals have differing views on corporate criminal liability and how such justice may be meted out. Furthermore, in Nuremberg, corporate entities such as IG Farben – which manufactured Zyklon B that was used to gas Jews in the infamous concentration camp “showers” – were dismantled based on their role in violations of the law of nations including the Nazis’ “Final Solution.” The dismantling of these corporate interests was akin to a corporate death penalty for these corporations not unlike many of the convictions doled out against the individuals who were tried before the tribunal.

The converse to this trend in criminal law is the fact that all civilized countries in the world permit corporate civil liability. The fact that the ATS provides jurisdiction for a civil cause of action rather than a criminal one is a determining factor. The question then becomes whether corporate liability needs to be a part of the international norm to be recognized under the ATS or whether corporate liability is part of the remedy and thus subject to ordinary tort-related rules, which would allow such liability under the ATS. The United States Solicitor General has weighed in saying that it is part of the remedy, and corporations may be subject to liability under the ATS.

So this brings us back to the initial scenario – where a corporation engages in conduct that it knows will facilitate violations of the law of nations such as terrorism, crimes against humanity, or even genocide, can that corporation be held liable under the ATS to the victims of those violations? The answer is a simple “yes” based on the statutory text and common law’s interpretation of tort liability, and it is up to the Supreme Court to make this determination.

The Plenary Powers Doctrine is Not a Blank Check

by Sudha Setty, professor of law and associate dean, Western New England University School of Law. Her book, National Security Secrecy: Comparative Effects on Democracy and the Rule of Law, was recently published by Cambridge University Press.

President Trump’s September 24 proclamation set forth immigration and entry restrictions that revised the restrictions in his January 27 and March 6 executive orders. In doing so, the administration attempted to reset the dispute over the extent of the president’s immigration and national security powers by claiming that the current administration policy was well-reasoned and the result of a lengthy deliberative process. The administration further argued that the new restrictions could not constitute a “Muslim ban” because North Korea and Venezuela, two of the eight nations included in the September 24 proclamation, are not Muslim-majority nations.

Now that a new order is in place, the Supreme Court has canceled the previously slated arguments as to the constitutionality of the March 6 order and has asked both sides to brief the question of whether the President’s September 24th proclamation has left the case moot. But answering the underlying question regarding the extent of the president’s plenary powers over immigration, particularly when national security matters are involved, is important because Trump administration lawyers argued, among other things, that when the president makes a decision regarding immigration and national security, that “should be the end of the matter.” They are wrong.  The Supreme Court must clarify what it has already established in various strands of constitutional jurisprudence: although the administration’s immigration and national security powers are broad, they are constitutionally limited, and the Trump administration’s actions go too far.

The Trump Administration has relied on a vision of immigration-related plenary powers first articulated in the 1889 case of Chae Chan Ping v. United States, which tested the constitutionality of the Chinese Exclusion Act.  That opinion referenced the pleas of white Californians to Congress to enact this law, including that “the presence of Chinese laborers had a baneful effect upon the material interests of the State, and upon public morals; that their immigration was in numbers approaching the character of an Oriental invasion, and was a menace to our civilization.” Ultimately, the Court rubber-stamped the animus-driven Chinese Exclusion Act as a valid exercise of Congress and the president’s plenary powers over immigration.

The Court also validated animus-based measures crafted in the name of national security for decades, most notably in the infamous 1944 decision of Korematsu v. United States, which upheld the executive order authorizing the exclusion and internment of over 100,000 people of Japanese descent, the majority of whom were U.S. citizens.  The Supreme Court in Korematsu noted that the Congress and executive had broad powers over matters of national security, and the Court’s job was to be deferential to those determinations.  In 1988, President Ronald Reagan signed the law that apologized and made reparations for the internment, noting that it was “carried out without adequate security reasons” and was motivated “largely by racial prejudice, wartime hysteria, and a failure of political leadership.”

The plenary powers doctrine still carries significant weight in immigration and national security matters, meaning that race-based policies with regard to immigration and national security can sometimes survive constitutional scrutiny.  But the days of the Court upholding government immigration policy based on explicit racism and ethnic stereotyping are long gone.  The Court has shifted in two important ways: it has shown far less tolerance for laws based on animus toward a particular nationality, religion, or ethnic group, and it has sometime been willing to question national security-related decisions of the President.

Korematsu is now rightfully viewed as part of the Court’s anti-canon: a cautionary tale illustrating what can happen when law is based in nativist fear, not a compelling national security concern coupled with thoughtfully-crafted policy.  Korematsu also serves a reminder to the Court of the dangers of too much judicial deference and inadequate questioning of policies that potentially violate human and civil rights.

In cases outside of the realm of immigration and national security, the Court has made clear that animus is irrational, and that a law based primarily on religious animosity will likely not stand, even if the four corners of the law or policy in question are facially neutral.

Together, these strands provide the basis for judicial skepticism toward all of President Trump’s travel bans, even though the March 6 and September 24 decisions were made under the auspices of the president’s plenary power with regard to immigration and national security, and even though those two orders do not, on their face, indicate animus toward Muslims.

The animus is real and obvious. President Trump made numerous public statements from his campaign onward as to his interest in creating a “Muslim ban.” Many of those problematic statements led courts around the country to enjoin the president’s initial travel-related executive order of January 27, 2017, barring nationals of various Muslim-majority countries from entering the country.  While that Order was on appeal, President Trump issued the March 6 Order, which revoked the original January 27 Order upon taking effect.  Several days later, as litigation over the March 6 Order was underway, President Trump lamented that the March 6 Order was simply a “watered down” version of the January 27 Order, and suggested that he would rather have the original order in place.  Soon before issuing the September 24 proclamation, while the White House made clear that a new travel ban was in the works, President Trump lamented that he would like to make a new ban “larger, tougher and more specific,” but could not because doing so would not be “politically correct.”

If the Court is willing to put together these pieces—blatant animus and the lack of sound national security justifications for these travel bans—it can reinforce its own jurisprudence and hold that the plenary powers doctrine is limited at the point where it enables unconstitutional action or threatens the rule of law.

It is not entirely clear that the Court is willing do this.  It has sent mixed messages since the September 11, 2001 terrorist attacks as to how much it will defer to the executive branch regarding national security, particularly in light of Congress’s vague and overly broad grant of authority in its Authorization for the Use of Military Force. This statute has served as the legal justification for everything from late 2001 U.S. bombing in Afghanistan to the ongoing U.S. military involvement in Syria.  On one hand, the Court pushed back in its post-September 11 habeas corpus cases against Bush administration arguments that once national security is invoked, the courts cannot impose constitutional constraints with regard to non-U.S. persons.  On the other hand, the Court has not seen fit to protect the constitutional rights of non-citizens in many other cases where national security concerns have been invoked.

Yet, at the very least, several post-September 11 cases show the Court’s willingness to refuse to rubber stamp the government’s position of “trust us, this is necessary for national security.” The Court must, at some point soon, take the opportunity to make clear that judicial review is an important element in maintaining the rule of law and democratic values, particularly when broad presidential authorities under the plenary powers doctrine are deployed as the justification for irrational and animus-laden decision making.

 

Protecting Local Progress

 

 

by Nestor M. Davidson, Albert A. Walsh Professor of Real Estate, Land Use and Property Law, Fordham Law School
 
 
Something has gone seriously awry in state-local relations. 
 
On February 22, 2016, the Charlotte City Council adopted an ordinance extending municipal non-discrimination protections to gay, lesbian, bisexual and transgender people, as scores of local governments have done.  Within a month, the North Carolina legislature was called into an extraordinary special session and in the space of a single day passed legislation through both houses that blocked Charlotte’s ordinance. North Carolina’s move understandably generated significant national outrage, but was only emblematic of a wave of preemptive state legislation targeting local governments that is becoming all too common. 
 
Across the country, cities are innovating to meet a host of pressing challenges—enacting minimum wage and paid sick leave legislation, expanding civil rights, protecting the environment, revolutionizing public health, welcoming immigrants, and pursuing many other policies that advance critical goals.  In response, state legislatures—not surprisingly, most notably in states with conservative state governments that are home to progressive cities—have been repeatedly shutting down avenues of local policymaking, preempting municipal act after municipal act, and moving to limit local authority more broadly. 
 
States, moreover, have begun to pass measures that not only block local democracy, but also seek to punish local governments—and individual local officials—for policy disagreements.  This past May, for example, Texas Governor Greg Abbott signed anti-sanctuary city legislation that not only sought to force local governments in the state to cooperate with federal immigration enforcement against their better judgment, but also threatened individual fines of up to $25,000 a day, removal from office, and even incarceration for local officials.
 
Fortunately, cities, local officials, advocacy groups, and citizens are responding to this troubling preemptive assault.  Despite the quite limited formal authority that local governments often possess in the face of state commands, litigation asserting a range of state and federal constitutional protections is growing.  Although the record is mixed, some of these claims—such as state constitutional bans against unfairly targeting local governments, constitutional constraints on state legislative procedure, and a variety of federal concerns—have found a receptive hearing from courts faced with clear state overreach. 
 
Indeed, in Texas just this past August, the small community of El Cenizo, nestled along the Rio Grande border, with a population of roughly 3,300, secured a preliminary injunction against the state’s anti-sanctuary city law on the eve of the law’s effective date.  A federal District Court found several constitutional infirmities in the statute, including First Amendment, Fourth Amendment, Due Process, and federal supremacy concerns. 
 
Protecting local progress in the face of state preemption is an uphill battle.  But the growing number of conflicts arising from the states and the increasingly punitive nature of state preemption are spurring creative advocacy.  Because it now falls to cities to take a leading role in advancing equity, inclusion, sustainability, and other critical priorities, finding and replicating instances of successful local advocacy and thinking anew about how appropriately to protect local democracy could not be more urgent.

 

Supreme Court should uphold working people’s fundamental rights in Murphy Oil

 

*This piece originally appeared on the EPI blog.

by Celine McNicholas, Labor Counsel, Economic Policy Institute

Today, EPI released a new paper by Cornell professor Alexander J.S. Colvin, which shows that more than half of all private sector non-union workers are currently subject to mandatory arbitration agreements—denying them access to the court system to resolve workplace disputes. Colvin also found that 41 percent of employees subject to mandatory arbitration also have waived their right to pursue work-related claims on a collective or class basis. Next week, the Supreme Court will consider whether arbitration agreements that include class and collective action waivers of all work-related claims are prohibited by the National Labor Relations Act (NLRA). The Court is scheduled to hear argument in National Labor Relations Board v. Murphy Oil USA (along with two other cases Ernst & Young LLP v. Morris and Epic Systems v. Lewis) on October 2.

The NLRA guarantees workers the right to stand together for “mutual aid and protection” when seeking to improve their wages and working conditions. Employer interference with this right is prohibited. However, as Colvin’s report shows, employers are increasingly requiring workers to sign arbitration agreements that force them to waive their rights to collective actions and instead handle all workplace disputes as individuals. In practice, that means that even if many workers faced the same type of dispute at work, each individual employee must hire their own lawyer, and must resolve their disputes out of court, behind closed doors, with only their employer and a private arbitrator.

The National Labor Relations Board (NLRB) first reviewed arbitration agreements with class and collective action waivers in D.R. Horton, Inc. (357 NLRB No. 184 (2012)) and found that these forced arbitration agreements interfere with workers’ right to engage in concerted activity for their mutual aid and protection, in violation of the NLRA. Corporate interests and the Trump administration—in a stark departure from the position taken by the Obama administration Department of Justice—are fighting the NLRB. They are focusing their argument on the Federal Arbitration Act (FAA), which requires courts to enforce arbitration agreements, subject to contract defenses. However, the Supreme Court has never enforced an arbitration agreement that violates another federal statute—as the arbitration agreements here violate the NLRA by requiring workers waive their fundamental right to join together to address workplace disputes. Still, that is what corporate interests arguing against the NLRB are asking the Court to do in this case. If they succeed, they will, as the NLRB argues in its brief, be using “private contracts to eviscerate the public rights Congress protected in the NLRA.”

Murphy Oil is a significant case for working people. If the Court sides with the Trump administration, workers could be required to waive our right to pursue workplace disputes on a collective or class basis, and instead we will be forced to individually arbitrate work-related claims. This is troubling, considering that employees who arbitrate grievances against their employer are much less likely to win than workers who file in federal court. Employees in arbitration win only about a fifth of the time (21.4 percent), whereas they win more than a third (36.4 percent) of the time in federal courts. And, when workers do prevail in arbitration, they are awarded far less in damages.

Workers depend on collective and class actions to enforce many workplace rights. Employment class actions have helped to combat race and sex discrimination and are fundamental to the enforcement of wage and hour standards. Without the ability to aggregate claims, it would be very difficult, if not impossible, for workers to find legal representation in these matters. This is particularly true for low-wage workers, whose cases are unlikely to involve large enough awards to attract attorneys to invest time in the case. That is the power of class and collective action suits: they let workers pool their claims, making it possible for an attorney to earn enough to make the case worth pursuing. And with class and collective action waivers in arbitration agreements, the arbitration process can only compensate an individual worker—rather than remedy systemic labor and employment violations experienced by many workers. Class and collective actions also help to identify and redress systemic violations of labor and employment protection. Court filings, unlike arbitration procedures, are public. Class action suits have served to draw attention to employer practices that violate worker protections and help the officials tasked with enforcing these laws develop targeted enforcement strategies that benefit all workers. Public awareness of these practices is critical to making sure we have policies that adequately protect workers.

In 1935, Congress recognized the importance of giving workers a collective voice in the workplace when it enacted the NLRA. The Supreme Court has the opportunity to uphold this fundamental right in Murphy Oil. If, however, the Court sides with corporate interests and the Trump administration, workers will likely be forced to sign away the long-held right to join together with their coworkers to address workplace disputes.