Supreme Court and Congress act in the same week to undercut the rule of law
In Epic Systems Corp. v. Lewis, the United States Supreme Court recently declared that employees can be forced to give up their rights to participate in class actions or collective actions when they face wage theft, retaliation, discrimination, harassment, or other violations of the Fair Labor Standards Act, 29 U.S.C. §§ 201, et seq., Title VII, 42 U.S.C. §§ 2000e, et seq., or other employment law or civil rights statutes. The swing vote in the 5-4 decision in Epic Systems as well as the author of the opinion was Justice Neil Gorsuch, who is on the Supreme Court because the Republican leadership in Congress refused to allow President Barack Obama’s nominee for a Supreme Court vacancy to be considered before the Electoral College selected Donald Trump as President. In Epic Systems, the majority opinion concluded that employers can require employees – as a condition of continued employment – to give up their ability to pursue their legal rights with other employees in court. In other words, 5 Supreme Court Justices favored the Federal Arbitration Act, 9. U.S.C. §§ 1, et seq., which establishes arbitration as a way to decide disputes, over the National Labor Relations Act, 29 U.S.C. §§ 151, et seq., which establishes the right of employees to join together to address working conditions and otherwise assert their rights in court or through other lawful means. Given that class actions and collective actions in court have been one of the main ways that employers and other corporations have been held accountable in the past, this is an unfortunate ruling. Importantly, however, the majority opinion did nothing else to limit protected activity under the law. Therefore, protected activity rights still apply to employees when they seek to address workplace issues together.
The same week that the Supreme Court decided Epic Systems, Congress significantly rolled back the law adopted in the wake of the Great Recession that Wall Street banks caused. This law, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), 12 U.S.C. §§ 5301, et seq., established protections to ensure fraud and other risky financial practices do not again jeopardize the economy. Consequently, Dodd-Frank originally created whistleblower protections, 15 U.S.C. § 78u-6(a)(6), that have encouraged whistleblowing as a vital means to ensure compliance. By reducing the reach of Dodd-Frank over big banks, however, Congress has made it more possible banks will resume the types of business tactics that triggered the worst financial crisis since the Great Depression. Indeed, taxpayers may have to bail out Wall Street banks again to save the economy in the future. The Congressional rollback of Dodd-Frank has also reduced loan data reporting requirements and, thus, transparency about, and accountability for, discriminatory lending by banks. Shortly before Congress engineered this roll back of Dodd-Frank, moreover, the Supreme Court weakened whistleblower protections under Dodd-Frank that makes it creates more opportunity for banks and other employers to retaliate against whistleblowers. In that case, Digital Realty Trust, Inc. v. Somers, the Supreme Court disregarded applicable regulatory authority and clearly established court precedent to declare protected activity only occurs when an employee reports fraud or another violation of Dodd-Frank to the Securities and Exchange Commission. In short, and to the detriment of the public interest, banks and other corporations have benefitted greatly from recent actions by both the Supreme Court and Congress.