Slim Supreme Court majority again uses arbitration clauses to thwart robust enforcement of workplace rights

Five Justices of the Supreme Court reversed both the District Court and the Court of Appeals in Lamps Plus, Inc. v. Varela to rule that the right to pursue class action claims through arbitration must be clear. In Lamps Plus, an employee (Mr. Frank Varela) filed class action claims against his employer (Lamps Plus) for improperly disclosing his tax information and that of approximately 1,300 other employees. Although the employment agreement prepared by Lamps Plus and signed by Mr. Varela contained an arbitration clause requiring employment-related disputes to be resolved via arbitration rather than in court, that clause is unclear about whether Mr. Varela waived his right to pursue class action claims through arbitration. A longstanding legal principle, known as contra proferentum, generally compels any ambiguity in an employment agreement to be resolved against the party that drafted the agreement – in this case, Lamps Plus. Nonetheless, five Justices of the Supreme Court disregarded that established legal doctrine and other applicable legal authority, resolving the ambiguity in favor of the party that drafted employment agreement.

Unfortunately, such judicial activism by the Supreme Court in favor of corporations is not new. In that regard, the American Constitutional Society (“ACS”) recently published an analysis of decisions by the “Roberts Five,” currently consisting of Chief Justice John Roberts, Justice Clarence Thomas, Justice Samuel Alito, Justice Neil Gorsuch, and Justice Brett Kavanaugh. ACS’s report shows that the Roberts Five – by the narrowest of margins – has repeatedly ruled in favor of corporate interests over the public interest. In particular, opinions like Lamps Plus make it more difficult to hold corporations responsible for their violations of employment law or civil rights statutes, whether involving wage theft, retaliation, harassment, or other misconduct.