Monday, May 28, 2018


May 28, 2018

     A recent Supreme Court decision, in Epic Systems Corp. v. Lewis, dealt with employment agreements which contain arbitration clauses.  The statement of facts in the majority opinion is sketchy, so the description which follows is based in part on the dissenting opinion and in part on the opinions of the Seventh and Ninth Circuits, two of the three Courts of Appeal from which appeal was taken.

     The underlying issue is, as described in the dissent, that the "employees in these cases complain that their employers have underpaid them in violation of the wage and hours prescriptions of the Fair Labor Standards Act of 1938 (FLSA), 29 U. S. C. §201 et seq., and analogous state laws."

     The employees wished to arbitrate as a class, for practical, financial reasons.  Again quoting the dissent: "Individually, their claims are small, scarcely of a size warranting the expense of seeking redress alone. . . .  But by joining together with others similarly circumstanced, employees can gain effective redress for wage underpayment commonly experienced."  However, the arbitration contracts not only required arbitration, as opposed to trial in a court, but required that each employee present his case in a separate arbitration, rather than joining similar claims in a single proceeding.

     The employees contended that the requirement to present each claim separately was unenforceable. The issue was summarized by the Ninth Circuit: "whether an employer violates the National Labor Relations Act by requiring employees to sign an agreement precluding them from bringing, in any forum, a concerted legal claim regarding wages, hours, and terms and conditions of employment."

     The Court held, in an opinion by Justice Gorsuch, joined by Chief Justice Roberts and Justices Kennedy, Thomas and Alito, that the employees are bound by the contracts, a result which they held to be mandated by the Federal Arbitration Act (FAA) of 1925.     Here is the operative section of that statute:

§ 2.  A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising . . ., or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract . . ., shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

The statute also provides, in §1, that "[N]othing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce."  It might seem that §1 would exclude employment contracts of workers in companies engaged in commerce.  However, the Supreme Court, in an earlier decision, held that, although an employment agreement may be, under § 2, a "contract evidencing a transaction in commerce," an employee such as these is not part of "any other class of workers engaged in foreign or interstate commerce." Circuit City Stores, Inc. v. Adams 532 U.S. 105 (2001).  The rule applies; the exception does not, even though the language arguably is the same.  (The weakness in that conclusion was pointed out in the dissents in Circuit City, another 5-4 decision).

     The employees’ remaining basis for avoiding the individual-claim requirement was  its inconsistency with the National Labor Relations Act (NLRA).  The majority acknowledged that the National Labor Relations Board (NLRB) had held "that the NLRA effectively nullifies the Arbitration Act in cases like ours," but set those rulings aside by noting that "the Executive [read: Trump Administration] has disavowed" that interpretation. 

     The NLRA was passed ten years after the FAA, and declared a new and more liberal labor policy.  As the Seventh and Ninth Circuits had held in the cases under review, those policies, protecting joint action, should be held to have modified the FAA.

     The majority brushed the NLRA aside: it "secures to employees rights to organize unions and bargain collectively, but it says nothing about how judges and arbitrators must try legal disputes that leave the workplace and enter the courtroom or arbitral forum. . . .This Court has never read a right to class actions into the NLRA."  Again: the NLRA deals with "efforts by employees related to organizing and collective bargaining in the workplace, not the treatment of class or collective actions in court or arbitration proceedings."  The notion that collective action in arbitration might be protected by a statute protecting collective action in other aspects of labor relations seemed too subtle a notion for the majority to grasp.

     Although the Court recited that it has a duty "to interpret Congress's statutes as a harmonious whole," it drew a bright line between them: "[T]he Arbitration Act and the NLRA have long enjoyed separate spheres of influence and neither permits this Court to declare the parties' agreements unlawful."

     That would be regressive and repressive enough in any case, but two of  the "agreements" in question barely qualify as contracts; as noted by the dissent — oddly only in a footnote —  "Petitioner Epic Systems Corporation e-mailed its employees an arbitration agreement requiring resolution of wage and hours claims by individual arbitration. The agreement provided that if the employees ‘continue[d] to work at Epic,’ they would ‘be deemed to have accepted th[e] Agreement.’ . . . Ernst & Young similarly e-mailed its employees an arbitration agreement, which stated that the employees' continued employment would indicate their assent to the agreement's terms."  Take it or leave.  The majority opinion referred to only one of the three contracts, but selected as its example one of those created by e-mail; no issue there, apparently. 

     The majority cited AT&T Mobility LLC v. Concepcion 563 U. S. 333 (2011), as authority for denying class arbitration.  However, it’s not clear what the rationale was in that case.  Its majority opinion stated that "[r]equiring the availability of classwide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA."  However, in the preceding paragraph it had offered a different theory: "Although §2’s saving clause preserves generally applicable contract defenses, nothing in it suggests an intent to preserve state-law rules that stand as an obstacle to the accomplishment of the FAA’s objectives."  The latter would not include the NLRA, a federal statute.  More to the point, Concepcion was not an employment-contract case.

     The dissent in Epic, by Justice Ginsberg, joined by Justices Breyer, Sotomayor and Kagan, pointed out that the labor legislation relied on by the employees, although directed specifically to such matter as unionization and strikes, reflects a broad concern for the rights of employees.  The NLRA protects "the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection." (emphasis added by the dissent)

     Two other problems with separate arbitrations were noted by the dissent: "Fear of retaliation may also deter potential claimants from seeking redress alone."  There is strength in concerted action.  Also, "individual arbitration of employee complaints can give rise to anomalous results. Arbitration agreements often include provisions requiring that outcomes be kept confidential or barring arbitrators from giving prior proceedings precedential effect. . . . As a result, arbitrators may render conflicting awards in cases involving similarly situated employees — even employees working for the same employer."  The Epic Systems contract is an example: "The arbitrator’s authority shall be limited to deciding the case submitted by the parties to the arbitration. Therefore, no decision by any arbitrator shall serve as precedent in other arbitrations . . . ."

     The dissenting opinion countered various of the arguments put forth in the majority opinion, but its basic position is that the arbitration contracts are unenforceable: "Beyond genuine dispute, an employer ‘interfere[s] with’ and "restrain[s]’ employees in the exercise of their §7 rights by mandating that they prospectively renounce those rights in individual employment agreements. . . .. Properly assessed, then, the ‘waivers’ rank as unfair labor practices outlawed by the NLRA, and therefore unenforceable in court."

     The majority’s detailed argument was little more than window dressing.  Its refusal to admit any progress in labor relations was announced, and the case was decided, by a passage in the first two paragraphs of the Gorsuch opinion: "Should employees and employers be allowed to agree that any disputes between them will be resolved through one-on-one arbitration?"  That is straight out of nineteenth century labor law: the employee has a "right" to submit to a one-sided arrangement with his employer, who holds all the cards.

     The statement continued with this : "Or should employees always be permitted to bring their claims in class or collective actions, no matter what they agreed with their employers?

As a matter of policy these questions are surely debatable. But as a matter of law the answer is clear."  Actually, his view of the law is limited and mistaken but, unless one is mired in the past, the policy issue should be clear: the ability of an employee to join with others to enforce rights should not be canceled by an adhesion contract.

     The majority opinion complained that, in the dissent’s view, "today's decision ushers us back to the Lochner era when this Court regularly overrode legislative policy judgments. So it does. "But like most apocalyptic warnings, this one proves a false alarm." It doesn’t. Lochner,[43] decided in 1905, struck down a statute which prohibited employers from requiring employees to work more than sixty hours in one week.  The Court then  justified its action by referring to "the general right of an individual to be free . . . in his power to contract in relation to his own labor."  Compare that to the majority’s reference here to the right of an employee to give away collective action.  Freedom’s just another word for everything to lose.


________________________

43. Lochner v. New York, 198 U.S. 45



Saturday, May 5, 2018


May 4, 2018

     By various measures the country is in poor shape. The federal government is mired in corruption and moral failure.  We might reasonably look to religious leaders for answers and guidance; think of the civil rights crisis, in which pastors such as Martin Luther King led in spirit and in action.  Unfortunately, now the most visible religious figures are part of the problem.

     Support for Trump by conservative Christians is a continuing puzzle.  Why would they stand behind a man who embodies, in numerous ways, the opposite of their beliefs and standards?  The question swirls around the announcement in April that "evangelical leaders are organizing a sit-down with President Trump in June."[37] "We're very concerned" about the Clifford/Daniels affair, "said a leader of a faith-based ministry."  That might be expected; Trump’s behavior, alleged and known, should be offensive to them.  Although they are, as stated, "concerned," that is not, apparently, because of  moral or religious principles, at least not directly.  Their reason for the meeting seems to be anxiety that Democrats might prevail in the midterm election. 

     "The source said the combination of the Stormy Daniels sex-scandal allegations and Trump's continued reputation for divisive rhetoric could suppress evangelical turnout in the November midterm elections."  Granted, they do worry about some specific issues: " ‘It is a concern of ours that 2018 could be very detrimental to some of the other issues that we hold dear,’ like preserving religious liberty and restricting abortion rights, the source noted." In other words, a Republican Congress and conservative judges are their goals. Trump’s reputation might interfere.

     Abortion is a subject worthy of discussion, and of compromise, although the evangelicals may be no more inclined to compromise than liberals. "Religious liberty" likely is a euphemism for freedom to discriminate or to impose views on others, as in the Hobby Lobby case (which also involved hyper-conservative abortion views).  The religious leaders are willing to empower a man who is so incompetent and erratic as to endanger the country, in order to pursue a narrow agenda.   The same could be said of other Trump supporters, but it seems especially odd among people who claim the moral high ground.

     Although the unidentified spokesman said that "Trump's tone and personal life remain a concern for many evangelicals," others, including Penny Nance of Concerned Women for America ("your voice for Biblical values") were less concerned.  As to the Daniels storm, "I just honestly don't hear hand-wringing over the issue. They're not surprised," she said, apparently referring to Trump’s Christian supporters; "they made that decision a long time ago. This president is not Rick Santorum or Mike Huckabee; he doesn't pretend to be a Bible-banging evangelical." Support of Trump by any voice for Biblical values, especially the leader of a women’s group, is puzzling.

      "Ralph Reed, chairman of the Faith and Freedom Coalition, also said it's ‘highly dubious’ that the allegations will substantially erode support for the president or suppress midterm turnout."  Opportunism becomes a religious tenet.

     A month earlier, Pastor Robert Jeffress, a member of Trump’s evangelical advisory board, said: “Evangelicals know they’re not compromising their beliefs in order to support this great president. And let’s be clear, evangelicals still believe in the commandment ‘thou shalt not have sex with a porn star.’ However, whether this president violated that commandment or not is totally irrelevant to our support of him."  That sounds like compromising their beliefs.  Evangelicals knew they “weren’t voting for an altar boy, he said;” they support Trump for his “policies and strong leadership.”[38]

     One meeting of evangelicals, but without Trump, took place last month.  "Evangelical" is a term more often applied than defined; usually it seems to equate to conservative Christian, or white conservative Christian, and carries an implication more of politics than of religion.  A report of the gathering this month used the word in a more traditional, literal sense. 

     The article, by Katelyn Beaty, formerly managing editor of Christianity Today, began with a description of the memorial service for Billy Graham, who was an evangelist, that is a spreader of the Christian message, with the intent of conversion.  However, "[m]any evangelical leaders, including some in attendance at Graham’s funeral, were fearful that this association with Trump now threatened the focus on personal salvation that Graham spent a lifetime preaching."[39]  Accordingly, a meeting was arranged at Wheaton College, a Christian school in Illinois.  The invitation stated that "support of ‘eighty-one per cent of self-identifying white evangelicals’ for Donald Trump is a call to self-reflection on the current condition of Evangelicalism.”  Indeed.

     The meeting seems to have gone nowhere.  Some participants left in protest of comments critical of Trump.  Although a formal statement was contemplated, none was issued.  The author clearly was disappointed in the result: "Without a statement, and with the bewildering skittishness about getting political, my time at Wheaton left me feeling deeply unsettled about the moral and political fortitude of my spiritual community in the era of Trump and beyond."

     Ms.Beaty wanted evangelicals to take a stand, to do good. "Much of evangelicalism still functions with a spiritual-secular divide, as if the physical concerns of this world can be neatly fixed with worship and prayer. But worship and prayer are not the only things that this Trumpian moment demands of us. Rather, the moment calls for risk."  This calls to mind the formulistic call for prayer after each mass shooting, a substitute for action. 

     She named some who had taken a stand, who had risked, including King; they "stood against corruption with courage and grace. They hadn’t been afraid to get political, to challenge unjust systems and policies. The Church was made stronger for it."  The society was improved as well.  However, there is little sign now of such an effort.

     The spiritual-secular divide, the flight from dealing with urgent real-world problems, is exacerbated by the rejection, by many conservative Christians, of scientific facts.  Some, such as evolution, are opposed to traditional belief, or are thought to be. Others are politically inconvenient.  Senator James Inhofe, Republican of Oklahoma, cited Genesis to prove that global warming is a hoax.

     In an excellent article in The Atlantic, Michael Gerson, a graduate of Wheaton, described one of the sources of modern fact-aversion.  In the early twentieth century, "the religiously orthodox published a series of books called The Fundamentals. Hence the term fundamentalism, conceived in a spirit of desperate reaction."  It represented a break with older evangelicalism.  "In reacting against higher criticism, it became simplistic and over literal in its reading of scripture. In reacting against evolution, it became anti-scientific in its general orientation. In reacting against the Social Gospel, it came to regard the whole concept of social justice as a dangerous liberal idea.”[40]

     Now, as noted above, evangelicals have taken another step: establishing a hierarchy of virtues which relegates personal merit to a lower rank, and threatens to reduce religion to another, rather hypocritical, special interest.  In describing the fall of Alabama Governor Bentley, in a sex scandal, an article offered this summary:  "[I]t had become clear that for conservative Christians, the cultural and political issues that define modern conservative politics mattered at least as much as moral piety.  . . .’The idea that moral hypocrisy hurts you among evangelical voters is not true, if you’re sound on all of the fundamentals,’ said Wayne Flynt, an ordained Baptist minister and one of Alabama’s pre-eminent historians. . . .‘At this time, what is fundamental is hating liberals, hating Obama, hating abortion and hating same-sex marriage’.”[41]

     Many of the comments by evangelical leaders defy belief.  Here are several from Gerson’s article: Following news of Trump’s tryst with Stormy Daniels and the payment of hush money, Franklin Graham vouched for Trump’s “concern for Christian values.”  Somewhat more evasively, Tony Perkins urged forgiveness or, in his phrase, Trump should be given a "mulligan" for his fooling around.  "Pastor David Jeremiah has compared Jared Kushner and Ivanka Trump to Joseph and Mary: ‘It’s just like God to use a young Jewish couple to help Christians.’ According to Jerry Falwell Jr., evangelicals have ‘found their dream president,’ which says something about the current quality of evangelical dreams."

     Some have been driven from the fold.  Peter Weiner, a conservative writer, declared in a recent column that he no longer could call himself an evangelical.  During the Alabama special election, in which Roy Moore was the Republican candidate, Weiner wrote: "the support being given by many Republicans and white evangelicals to President Trump and now to Mr. Moore have caused me to rethink my identification with both groups. . . . I consider Mr. Trump’s Republican Party to be a threat to conservatism, and I have concluded that the term evangelical — despite its rich history of proclaiming the ‘good news’ of Christ to a broken world — has been so distorted that it is now undermining the Christian witness." [42] 

     Others have expressed similar views to him.  One said "the term evangelical “is now a tribal rather than a creedal description.”   Gerson summed the problem up in similar terms: "The moral convictions of many evangelical leaders have become a function of their partisan identification. This is not mere gullibility; it is utter corruption. Blinded by political tribalism and hatred for their political opponents, these leaders can’t see how they are undermining the causes to which they once dedicated their lives. Little remains of a distinctly Christian public witness."


_______________________

37. https://www.npr.org/2018/04/06/599972396/concerned-evangelicals-plan-to-meet-with- trump-as-sex-scandals-swirl?utm_source=The%20Muck%20Rack%20Daily&utm_campaign =068597c810-EMAIL_CAMPAIGN_2018_04_06&utm_medium=email&utm_term=0_ af2b2023a3-068597c810-20027577&via=newsletter&source=CSPMedition


38
http://thehill.com/homenews/media/377559-pro-trump-pastor-stormy-daniels-allegations-totally-irrelevant-to-evangelical  

39.
https://www.newyorker.com/news-desk/on-religion/at-a-private-meeting-in-illinois-a-group-of-evangelicals-tried-to-save-their-movement-from-trumpism

40.
https://www.theatlantic.com/magazine/archive/2018/04/the-last-temptation/554066/

41.
https://www.nytimes.com/2017/04/11/us/alabama-governor-robert-bentley-sex-scandal.html

42.
https://www.nytimes.com/2017/12/09/opinion/Sunday/wehner-evangelical-republicans.html?em_pos=small&emc=edit_ty_20171211&nl=opinion-today&nl_art=14&nlid=73688601&ref=headline&te=1&_r=0




 
Posts © 2011-2012 by Gerald G. Day