Another term of the US Supreme Court has come and gone. Of course it hasn't really ended for you, my devoted readers, until you've had a chance to see what Christopher Faille thinks of it. So here we are.
There are many decisions this term that involve very important and topical matters that won't be discussed here or that (as in the case of state taxation of online sales) will only be glancingly mentioned. When that happens, it may be for no reason better than that they have been much covered and I have nothing in particular to add about them.
I was tempted, when I first started outlining this material, to spend a fair amount of space on LAGOS v. US, an interpretation of the criminal restitution statute, that is, a statute aimed at getting the guilty to pay for the costs of enforcing the law against them. But I have overcome that temptation. Here, instead, is a very summary statement. In a unanimous opinion by Justice Stephen Breyer the Court adopted a narrow view of that statute, excluding from its scope the costs that the victim of a crime incurs in a private investigation of the offense.
The best pragmatic justification of LAGOS I've seen is that the court recognizes that most of the prison population in the US is drawn from the indigent, not from folks who can be made to cough up significant sums, so financial rewards of this sort constitute an utterly ineffective sort of remedy.
Coming Attractions
So, what will I discuss this year? I'll spend most of the rest of this post on Epic Systems v. Lewis, the big collective-action-limiting decision of this term. Tomorrow, I'll turn to other non-constitutional cases (that is, cases that turn on the interpretation of statutes). In particular, tomorrow's portfolio will involve Wisconsin Central v. US, the SAS Institute case, and Chavez-Meza v. US. These deal, respectively, with the definition of "compensation" for tax purposes, patent law administrative challenges, and the use of the sentencing guidelines.
On Saturday we'll discuss some of the big constitutional cases of this term. There was: one on the assistance of counsel in the capital punishment context; unconstitutional vagueness on the term "violent felony;" compelled speech on the matter of abortions; and of course the much-anticipated wedding cake dispute out of Colorado.
Finally on Sunday we'll discuss gerrymandering. This was the "dog that didn't bark" of the October 2017 term. It was certainly reasonable to expect some broad landmark pronouncement from SCOTUS this time around, but the Justices managed to avoid it, leaving us to discuss THAT.
Collective FLSA Actions versus Individualized Arbitration
Without further ado then....
When employers break the law in their dealings with employees, it is often the case that they affect many employees, but that the damage to any individual employee is small (small as appellate courts see the world -- perhaps a few hundred dollars in each case -- not insignificant to the individuals in each case, but small enough to make litigation for it a 'bridge too far.') It may also be the case, though, that the collective harm is worth millions. This is precisely why the Fair Labor Standards Act (FLSA) provides for "collective actions" in such cases -- similar to, though in principle distinct from, "class actions"
That is also why large firms nowadays often put individualized arbitration clauses into their employment contracts. The language of such clauses prohibits employees from combining these grievances in the way FLSA had contemplated. They say that if the employee has a dispute with the employer, the employee will, as an individual, take it to an arbitrator.
So: two private parties agree with each other to ignore the law in a certain respect. Normally, that would have no effect on the law at all. If Epic Systems wronged Lewis in some way, if Lewis believed that the wrong was one he shared with a lot of other people, then why should Lewis not repent of his rash decision to stick to individual arbitration? Why is that any more binding that a 'pinkie swear' in the face of a clear provision for collective action in the FLSA?
Employers answer: because of the Federal Arbitration Act (FAA) of 1925.
The FAA provides that a "written provision in ... a contract ... involving commerce to settle by arbitration a controversy ... shall be valid, irrevocable, and enforceable, save upon such ground as exist at law."
Employees answer by pointing to the "savings" clause in that language. The FLSA is a "ground" that exists "at law" as to why a specific class of such provisions should not be enforceable, and the FAA itself provides that such grounds will be respected.
Employers respond to that by pointing to various limited meanings that the savings language might be taken to possess. For example, it might refer only to old common law arguments voiding the force of contracts such as fraud and duress. If the employer held a gun to employees head and said, "Sign here!" or put the relevant language in fine print in Latin, then the employer might have had a ground that existed at law IN THE SENSE INTENDED HERE to ignore the arbitration clause later. Otherwise ... not.
So in the weeds of statutory interpretation this was a case about a narrow versus a broad reading of the savings clause in the FAA, which in turn could lead respectively to an unwaiveable versus a waiveable understanding of the collective action provision in the FLSA.
Yet nobody believes that the weeds of statutory interpretation are where this decision is to be understood. It was a raw fight over power. Marxists would describe the battle lines as capital versus labor. I would not, because I don't know if capital (as represented, say, by the stock price of the companies on the winning side) actually benefits from one reading over the other. This is a fight between some very well-paid employees engaged in managerial labor on the one hand and some not so well paid employees engaged, often, in old fashioned physical labor on the other.
The judicial practice of picking away at collective actions, using the FAA to this end, is an old one. Back in 1995, in the ALLIED-BRUCE TERMINIX case, Justice O'Connor said (in a concurring opinion), "The Court has abandoned any pretense of ascertaining congressional intent with respect to the Federal Arbitration Act, building instead, case by case, an edifice of its own creation."
Why has this happened? Why this trend? The answer has to be something more than that those managerial laborers are greedy. Haven't they always been greedy? What is constant does not explain what has changed.
But I'll leave matters there. See you tomorrow, for more adventures in statutory interpretation!
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