Posted June 15, 2022
Nationwide—Today, the Supreme Court of the United States thwarted yet another avenue for workers to come together for better pay and working conditions. Its decision today in Viking River Cruises v. Moriana permits companies to force workers to give up the right to collectively challenge workplace-wide lawbreaking by imposing forced arbitration clauses in employment contracts—something that prior to this decision was not permitted under California law. Instead, individual employees can be forced into private, secret arbitration, and can only pursue their individual claim. The effect of this decision will be to exacerbate workplace-wide violations while further eroding corporate accountability.
With this ruling, the Court has stooped to a new low in its march to dismantle every mechanism that working people have used to protect themselves from wage theft, workplace discrimination, and abuse by employers. In 2018, the Court ruled that employers can strip their employees of the right to participate in class actions. Now, it gives employers another way to limit workers’ ability to challenge workplace-wide lawbreaking under California’s Private Attorneys General Act (PAGA).
PAGA allows workers to enforce labor rights on behalf of the state and recover civil penalties for violations of the California Labor Code, and to do so with respect to all violations that occur in their workplace—not just those that individually affect them. It is based on a centuries-old qui tam mechanism that allows the state to enlist whistleblowers to hold bad actors accountable. PAGA has demonstrably enhanced Labor Code compliance among employers, collected millions of dollars in penalties to fund the work of California’s labor agency, and ensured that violations of the law have a meaningful remedy.
By severely limiting PAGA, the Court gives a green light to employers to disregard workers’ rights and further expand their use of forced arbitration, which already covers more than 60 million workers in the non-union private sector, including 59.1% of Black workers and 57.6% of women workers. With this ruling, corporations have even less reason to fear any consequence for violating laws intended to ensure workers fair pay, safe working conditions, and equal opportunities to advance. A recent report found that forced arbitration helped employers who committed wage theft pocket $9.2 billion in wages stolen from low-paid workers in 2019.
The policy response we need is clear: Congress must immediately pass the FAIR Act to restore workers’ access to justice and hold lawbreaking corporations accountable. States still have the prerogative to enforce workplace laws and must recommit to detecting and punishing wage theft, harassment, and workplace hazards.
National Employment Law Project
Center for Popular Democracy
Economic Policy Institute
National Legal Advocacy Network
People’s Parity Project
Public Rights Project