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U.S. Supreme Court makes it harder to combat wage theft

This week, the Supreme Court held in the Epic Systems case that corporations may legally force employees to choose between their jobs and their right to bring class or collective actions for wage theft—which really is not a choice at all. The vast majority of employees cannot refuse their employers’ demands to relinquish their rights to bring class or collective actions  because they cannot afford to lose their jobs.

The Supreme Court Justices split 5-4 in this controversial decision. Justice Gorsuch wrote the Court’s opinion and Justice Ginsburg wrote a dissenting opinion that Justices Breyer, Kagan, and Sotomayor joined. Justice Ginsburg’s dissent described the horrible injustices that will occur due to this wrongly decided case. Because of the Court’s decision, many employees will have no choice but to pursue wage theft claims against their employers on an individual basis, which, as Justice Ginsburg explained, will allow an increasing number of corporations to get away with wage theft.

Justice Ginsburg’s description of the events likely to unfold as result of this decision was spot on:

“The inevitable result of today’s decision will be the underenforcement of federal and state statutes designed to advance the well-being of vulnerable workers…Expenses entailed in mounting individual [wage theft] claims will often far outweigh potential recoveries…Fear of retaliation may also deter potential claimants from seeking redress alone…The upshot: Employers, aware that employees will be disinclined to pursue small-value claims when confined to proceeding one-by-one, will no doubt perceive that the cost-benefit balance of underpaying workers tips heavily in favor of skirting legal obligations.”

To illustrate, take for example a large corporation that decides to refuse to pay employees for the few minutes that they spend putting tools away at the end of their shifts. The corporation knows that it has to pay its workers for this time but just decides, to keep labor costs down, that it is not going to pay them. In a large corporation, this decision can lead to thousands of dollars being stolen from employees every week. If the corporation has forced employees to give up their right to bring a class or collective action, most likely none of these employees will do anything about the wage theft. Employees will not want to spend time or incur the expense of retaining a lawyer to pursue such a small claim. They also will not want to risk the potential of retaliation that they could experience if they sue their employer. As a result, this corporation will just get away with stealing from its employees.

Workers need to rise up and fight back against this abusive practice. Wage theft is a widespread problem and it is about to get a lot worse. Justice Ginsburg recommended that Congress fix the law to prevent injustices like the hypothetical example described above. Workers can also band together in unions or other ways and collectively refuse to relinquish their rights to bring class and collective actions. They can also put political pressure on legislatures and government agencies to devote more resources to fighting wage theft. It is going to take a lot of effort to undo the damage that the Supreme Court has done in this case.  In the meantime, workers will have to suffer the consequences.