In a big win for employees nationwide, the Supreme Court voted unanimously this week in favor of our plaintiff against Southwest Airlines. The ruling allows some workers to have their case heard before the Court and not with an arbitrator – regardless of a signed arbitration agreement.
In Saxon v. Southwest Airlines, Stephan Zouras, LLP is asserting claims on behalf of a collective group of transportation workers who load and unload cargo for the airline. In an opinion issued by Justice Thomas, the Court ruled that this class of workers is exempt from the Federal Arbitration Act of 1925 because they belong to a “class of workers engaged in foreign or interstate commerce.” This means these Southwest employees (and other improperly paid transportation workers) can collectively sue for wage theft and back pay.
For years, Stephan Zouras, LLP has fought against corporations and forced arbitration mainly because it strips employees and consumers of their Constitutional right to a jury trial. In arbitration, big business is much more likely to win because arbitration is private – no judge, no jury and limited oversight.
The Economic Policy Institute estimates that more than 60 million American workers are now subject to mandatory arbitration agreements. In 1992, only 2% of American workers were subject to forced arbitration. This exponential increase directly impacts workers in Illinois, with millions of Illinoisans – 60% of those employed by large private sector employers — now subject to forced arbitration.
How do arbitration agreements hurt workers?
Arbitration agreements are imposed, often against those with the least bargaining power (minorities, women, hourly-paid, low wage earning blue collar workers) as a mandatory condition of employment. In other words, the employee is forced, in exchange for employment or continued employment, to surrender their Constitutional right to access the court system. The employer, on the other hand, always retains its right to go to court against the employee.
Arbitration agreements are never individually negotiated; they are form agreements often hidden in “the fine print.” Usually, the employee does not even realize they have given up their Constitutional rights until the employer engages in illegal conduct against the employee and they consult with a lawyer. This includes claims for sexual harassment, discrimination based on race, sex or religion, claims for unpaid minimum or overtime wages, and more.
Employers have every reason to force employees into arbitration. At arbitration, employees do not have the same rights and protections as in court. There is no judge, no jury, no appeal, and only limited discovery and procedural rights. The entire proceeding takes place in secret behind closed doors with no public scrutiny or accountability. That helps ensure that the employer’s illegal practices and serious misconduct remain a secret, removing any incentive for it to change.
Even worse, arbitration proceedings are overseen by an arbitrator who is not elected, is not appointed by an elected official, is not required to follow legal precedent, may have limited or no experience, and may be biased, prejudiced or have interests which are in conflict with the employee.
Studies have shown that employees are far less likely to win at arbitration and even when they do win, the damages they are awarded are significantly less than in court. One study found that at arbitration, workers win just 21.4% of the time and the award amount was three times smaller than cases decided at trial.
This ruling is a huge victory for workers engaging in interstate commerce, preserving their Constitutional rights and access to the courts, and preventing corporations from avoiding accountability for engaging in misconduct against employees.
Forced or mandatory arbitration is unjust. We will continue to advocate for employees and those affected by deceptive business practices. The lawyers at Stephan Zouras, LLP have achieved countless victories in court and recovered over $250 million for victims of illegal wage practices and other corporate abuse.