Can My Employer Stop Me from Joining a Class Action Lawsuit?

A class-action lawsuit is one that entails a single plaintiff (or small group) bringing the claim on behalf of a larger group. Class actions serve to make the legal process more efficient in cases involving more than one plaintiff against a shared defendant. Employment claims often take the form of a class action against a single company or business owner. In a recent decision by the Supreme Court, however, millions of employees might not get their day in court – or arbitration, that is. The Court ruled 5 to 4 that employers can block employees from joining class action lawsuits.

About Class Action Lawsuits Against Employers

Arbitrating against an employer has always been a difficult task, but for many employees it’s never even been an option. Federal laws have long-since permitted employers to include arbitration clauses in employment contracts, which prohibit employees from starting or joining class actions. “Arbitration” can refer to any legal proceeding that occurs outside of the courtroom, under the jurisdiction of a neutral third party. It is an alternative form of dispute resolution that is popular with employment cases.

Employers might include arbitration clauses in employment agreements to protect the company from legal action in the event of issues such as discrimination, sexual harassment, or breaches of contract. An arbitration clause might have language banning an employee from joining a class action or other type of arbitration. Such has been the case at many Fortune 500 companies, including Amazon, Wells Fargo, and Uber. Uber recently changed its employment agreements to lift the arbitration ban. This means Uber drivers now have the opportunity to file sexual harassment lawsuits.

Unfortunately for millions of other employees, a Supreme Court ruling will continue to allow employers to keep arbitration clauses banning class actions in their employment agreements. Had the Court ruled the other direction, a new rule would have existed in which employers could no longer ban employees from joining class actions. Employers could still use arbitration clauses, but not to prevent employees from joining class action lawsuits. The final decision on May 21, 2018, held that employers may still enforce the class action ban.

How Does the Recent Ruling Change Things?

Now that anti-class-action language can legally remain in employment arbitration clauses for the foreseeable future, employees may expect to have to sign their rights away as a condition of employment. The majority of employers who prevent employees from joining lawsuits make signing the arbitration clause a mandatory requirement if the employee wants the job. Many workers sign away their rights to join lawsuits in the pile of paperwork they receive at the start of a new job without even realizing it. It’s important to read the fine print of a contract before signing.

The ruling didn’t change any previous laws, per se. Instead, it prevented a suggested change that would have taken away employers’ right to prevent employees from joining class actions. After the Supreme Court decision, employers will continue to prevent employees from joining class actions, if they so desire. Note that not all employers include such clauses in their agreements. Check with your employer or prospective employer to see if it will prevent you from arbitration as a term of your employment.

Note that just because you cannot join a class action against your employer does not mean you lose all of your rights as a worker. You still have the same rights to a safe, fair workplace. You may only lose your right to arbitration, in which your employer pays the legal fees, as well as to joining class actions. Speak to a California employment lawyer for more information about your remaining legal options if you experience employment issues.