1 00:00:00,080 --> 00:00:02,520 Speaker 1: It's the first Monday in October, which means the Supreme 2 00:00:02,520 --> 00:00:05,080 Speaker 1: Court is back in session, this time with a full 3 00:00:05,080 --> 00:00:07,760 Speaker 1: complement of nine justices, something they haven't had for a 4 00:00:07,760 --> 00:00:11,240 Speaker 1: while with the confirmation of Neil Gorcitch and the courts. 5 00:00:11,480 --> 00:00:14,400 Speaker 1: Day included a trio of cases that will have important 6 00:00:14,440 --> 00:00:18,280 Speaker 1: consequences for employers and employees. The cases involved the question 7 00:00:18,320 --> 00:00:22,080 Speaker 1: of whether an employment contract requiring employees to arbitrate disputes 8 00:00:22,400 --> 00:00:26,080 Speaker 1: can prohibit employees from filing class action lawsuits against the employer. 9 00:00:26,760 --> 00:00:29,600 Speaker 1: The cases split the federal government, with the Trump administration's 10 00:00:29,600 --> 00:00:33,600 Speaker 1: Solicitor General arguing yes, but the National Labor Relations Board 11 00:00:33,680 --> 00:00:36,280 Speaker 1: arguing no, and both of them appeared in the Supreme 12 00:00:36,280 --> 00:00:39,400 Speaker 1: Court today here to talk with us about this important 13 00:00:39,400 --> 00:00:43,239 Speaker 1: employment law case. Our Paul Salvatore, partner at Prostcauer, and 14 00:00:43,320 --> 00:00:47,519 Speaker 1: Mark Rifkin, a partner at Wolf Haldenstein. Mark, Let's start 15 00:00:47,560 --> 00:00:49,120 Speaker 1: with what the case is about. There there are two 16 00:00:49,120 --> 00:00:52,280 Speaker 1: statutes here that are kind of in conflict. What what 17 00:00:52,360 --> 00:00:54,800 Speaker 1: do the What does the court have to decide? Michael, 18 00:00:54,800 --> 00:00:57,240 Speaker 1: The Court is being asked to decide number one if 19 00:00:57,280 --> 00:00:59,640 Speaker 1: there really is a conflict between the two statutes. That 20 00:00:59,800 --> 00:01:04,480 Speaker 1: is the Federal Arbitration Act, which requires that arbitration agreements 21 00:01:04,520 --> 00:01:07,080 Speaker 1: be protected to the same extent as every every other 22 00:01:07,160 --> 00:01:10,440 Speaker 1: contract on the one hand, and then the National Labor 23 00:01:10,480 --> 00:01:16,520 Speaker 1: Relations Act, which protects employees rights to UH to collective actions, 24 00:01:17,200 --> 00:01:21,319 Speaker 1: and the effect of the arbitration waiver in all these 25 00:01:21,319 --> 00:01:25,840 Speaker 1: employment agreements is to prohibit employees from bringing either a 26 00:01:25,880 --> 00:01:28,920 Speaker 1: class action or a collective action under the Fair Labor 27 00:01:28,959 --> 00:01:32,440 Speaker 1: Standards Act or the National Labor Relations Act, which the 28 00:01:32,480 --> 00:01:38,040 Speaker 1: employees say is a substantive right they have under the statute. Paul, 29 00:01:38,800 --> 00:01:42,720 Speaker 1: there wasn't about faced by the Justice Department under President Obama. 30 00:01:42,800 --> 00:01:45,520 Speaker 1: The Justice Department, it's sided with the n l r B, 31 00:01:46,360 --> 00:01:51,440 Speaker 1: and then under President Trump they are on the opposite 32 00:01:51,480 --> 00:01:54,480 Speaker 1: side of the n l r B. Explain how that 33 00:01:54,840 --> 00:02:00,160 Speaker 1: worked today? Well, it it actually worked pretty smoothly today. 34 00:02:00,480 --> 00:02:03,560 Speaker 1: I didn't think it would. I thought that the Court 35 00:02:03,640 --> 00:02:10,400 Speaker 1: traditionally frowns on the government flipping positions when the administration's changed. 36 00:02:11,080 --> 00:02:14,720 Speaker 1: But today they got away with it. Uh. The Deputy 37 00:02:14,720 --> 00:02:20,320 Speaker 1: Solicitor who had been serving as acting solicitor for many months. UH, 38 00:02:20,360 --> 00:02:23,720 Speaker 1: the court started out with who I was there and 39 00:02:23,720 --> 00:02:27,240 Speaker 1: and watched as the Chief Justice congratulated him for his 40 00:02:27,320 --> 00:02:31,000 Speaker 1: service to the United States. Uh. And then a few 41 00:02:31,040 --> 00:02:33,800 Speaker 1: minutes later he got up and argued, so, um, that 42 00:02:33,880 --> 00:02:35,680 Speaker 1: might have had something to do with the fact that 43 00:02:35,720 --> 00:02:39,480 Speaker 1: no one uh, no one slammed them. Um. But his position, 44 00:02:39,960 --> 00:02:44,520 Speaker 1: the government's position was the same position that Paul Clement 45 00:02:44,760 --> 00:02:50,000 Speaker 1: was was arguing behalf of the employers. So, as I 46 00:02:50,080 --> 00:02:53,120 Speaker 1: understand it, marked the employers are arguing that the arbitration 47 00:02:53,120 --> 00:02:56,760 Speaker 1: at the Federal Arbitration Act says that, Um. Basically, the 48 00:02:57,280 --> 00:03:01,440 Speaker 1: arbitration provisions are always enforceable. If it exists, it's enforceable. 49 00:03:01,960 --> 00:03:05,080 Speaker 1: And these contracts do have arbitration provisions. So how is 50 00:03:05,120 --> 00:03:08,600 Speaker 1: it that the employee side of this argues around that 51 00:03:08,680 --> 00:03:11,919 Speaker 1: provision of the law. Well, the employees saying that the 52 00:03:12,080 --> 00:03:15,920 Speaker 1: f a A, the Federal Arbitration Act, only entitles arbitration 53 00:03:15,960 --> 00:03:18,359 Speaker 1: agreements to be enforced to the same extent as all 54 00:03:18,360 --> 00:03:21,239 Speaker 1: other contracts. It used to be historically in this country 55 00:03:21,280 --> 00:03:24,840 Speaker 1: that arbitration agreements were frowned upon, and the f a 56 00:03:24,840 --> 00:03:29,560 Speaker 1: A protects arbitration agreements, But that doesn't mean that an 57 00:03:29,680 --> 00:03:33,680 Speaker 1: unlawful agreement can be enforced in the federal courts. And 58 00:03:33,720 --> 00:03:37,520 Speaker 1: so the employees say, if this agreement takes away statutory 59 00:03:37,680 --> 00:03:40,800 Speaker 1: rights that the n l r A, the National Labor 60 00:03:40,800 --> 00:03:44,480 Speaker 1: Relations Act, gives us, then it's an unlawful agreement and 61 00:03:44,520 --> 00:03:47,960 Speaker 1: it can't be enforced, just like any other unlawful contract 62 00:03:48,200 --> 00:03:51,680 Speaker 1: could be enforced. Paul, you were there, tell us how 63 00:03:51,720 --> 00:03:58,080 Speaker 1: the justices reacted? Well, and they really split uh in 64 00:03:58,160 --> 00:04:02,920 Speaker 1: the liberal and conservative camps. Uh, with Justice Kennedy UH 65 00:04:03,000 --> 00:04:05,840 Speaker 1: in the middle, but but not I think that far 66 00:04:06,000 --> 00:04:09,080 Speaker 1: from the conservative camp where he usually ends up in 67 00:04:09,080 --> 00:04:12,200 Speaker 1: these arbitration cases, of which there have been many involving 68 00:04:12,240 --> 00:04:16,280 Speaker 1: many different statutes, including other workplace statutes over the last 69 00:04:16,680 --> 00:04:20,560 Speaker 1: twenty years or so, UM and and so Well, I 70 00:04:20,600 --> 00:04:24,320 Speaker 1: think that Justice Brier and Justice Kagan, so Mayor and 71 00:04:24,360 --> 00:04:28,680 Speaker 1: Ginsburg would have no trouble finding a substantive right that's 72 00:04:28,800 --> 00:04:33,320 Speaker 1: created uh in UH section seven of the National Labor 73 00:04:33,400 --> 00:04:38,760 Speaker 1: Relations Act. Um the the others Uh, uh would not 74 00:04:39,120 --> 00:04:43,920 Speaker 1: and Uh it's a majority that wins in about thirty seconds. 75 00:04:44,720 --> 00:04:48,000 Speaker 1: What do what are the implications here if in fact 76 00:04:48,080 --> 00:04:50,160 Speaker 1: the conservative you get a five four conservative vote for 77 00:04:50,200 --> 00:04:53,080 Speaker 1: the employers. Well, I think it's it's another major victory 78 00:04:53,160 --> 00:04:56,560 Speaker 1: for corporate America and I don't divide the court in 79 00:04:56,800 --> 00:05:00,760 Speaker 1: conservative liberal terms. I think that's useful in in UH 80 00:05:00,960 --> 00:05:03,880 Speaker 1: social issues, but in in business issues, I think it's 81 00:05:03,920 --> 00:05:06,840 Speaker 1: it's corporations versus individuals. In here, I think it would 82 00:05:06,839 --> 00:05:09,880 Speaker 1: be a big win for corporations and a big defeat 83 00:05:09,920 --> 00:05:15,960 Speaker 1: for individuals. I will note that a group of arbitrators 84 00:05:16,600 --> 00:05:19,400 Speaker 1: filed an amicus brief in which they said exactly that. 85 00:05:19,440 --> 00:05:22,800 Speaker 1: They said, the purpose of this is to discourage employees 86 00:05:22,800 --> 00:05:25,160 Speaker 1: from filing claims at all, because there's a practical matter 87 00:05:25,240 --> 00:05:28,600 Speaker 1: individual claims don't get litigated. We're talking with Paul Salvatore, 88 00:05:28,680 --> 00:05:31,720 Speaker 1: partner at Proskauer, and Mark Rifkin, a partner at Wolf Holdenstein, 89 00:05:31,720 --> 00:05:34,359 Speaker 1: about today's oral argument in the United States Supreme Court 90 00:05:34,839 --> 00:05:39,000 Speaker 1: about whether employee arbitration agreements can prevent employees from class 91 00:05:39,000 --> 00:05:41,800 Speaker 1: action lawsuits against their employers. Is a very important case 92 00:05:42,320 --> 00:05:46,080 Speaker 1: UM for both employers and for labor and UM. It 93 00:05:46,160 --> 00:05:50,160 Speaker 1: was apparently split between the conservatives and the liberals, as 94 00:05:50,200 --> 00:05:53,360 Speaker 1: many of these controversial cases are. Paul, you were mentioning 95 00:05:53,360 --> 00:05:57,160 Speaker 1: earlier about that UM Justice Kennedy seems to be siding 96 00:05:57,279 --> 00:05:59,560 Speaker 1: with the employer side of the argument on this. What 97 00:05:59,640 --> 00:06:03,600 Speaker 1: makes you say that, well, the questions he asked were 98 00:06:04,080 --> 00:06:09,080 Speaker 1: questions which which went to the fundamental premise that the 99 00:06:09,200 --> 00:06:13,640 Speaker 1: National Relations Board was asserting that there is a somehow 100 00:06:13,640 --> 00:06:17,440 Speaker 1: a substantive right uh in in the in the labor 101 00:06:17,520 --> 00:06:20,760 Speaker 1: law to be able to bring a class action. Uh 102 00:06:20,839 --> 00:06:23,680 Speaker 1: As Paul Clement, the former Solicitor General who was arguing 103 00:06:23,839 --> 00:06:27,040 Speaker 1: for the employers, pointed out, for seventy seven years the 104 00:06:27,160 --> 00:06:31,080 Speaker 1: n l RB didn't interpret the statute that way. Um. 105 00:06:31,200 --> 00:06:35,400 Speaker 1: And in indeed, when the Supreme Court was issuing other 106 00:06:35,720 --> 00:06:40,080 Speaker 1: arbitration rulings in the workplace, it it never never set 107 00:06:40,120 --> 00:06:43,600 Speaker 1: a peep, uh Clement said. The note dog barked at 108 00:06:43,640 --> 00:06:49,960 Speaker 1: that point. Um. And and so this seems a little disingenuous, mark. 109 00:06:50,000 --> 00:06:52,760 Speaker 1: Do you want to respond to that? Well, I don't 110 00:06:53,040 --> 00:06:56,840 Speaker 1: think it's disingenuous. I think the issue arose here squarely. 111 00:06:56,920 --> 00:07:00,120 Speaker 1: I think the the nl RB has consistently take in 112 00:07:00,120 --> 00:07:02,840 Speaker 1: the position that the statute protects, that is, the n 113 00:07:02,960 --> 00:07:07,480 Speaker 1: l r A protects the right to concerted action. The 114 00:07:07,600 --> 00:07:11,040 Speaker 1: question is whether this is protected concerted action. And the 115 00:07:11,080 --> 00:07:14,400 Speaker 1: real issue is whether you think that the class or 116 00:07:14,400 --> 00:07:17,560 Speaker 1: collective action is merely a procedural remedy is opposed to 117 00:07:17,640 --> 00:07:21,239 Speaker 1: a substantive right. The side of the government that changed 118 00:07:21,280 --> 00:07:24,920 Speaker 1: positions here. The Justice Department has has now sided with 119 00:07:25,240 --> 00:07:27,840 Speaker 1: the employers and said, no, it's not it's it's merely 120 00:07:27,880 --> 00:07:32,240 Speaker 1: a procedural remedy. I think the arbitrators disagree with that, 121 00:07:32,320 --> 00:07:34,880 Speaker 1: and they recognize how substantive it is, because they say, 122 00:07:34,920 --> 00:07:37,120 Speaker 1: if you take away the right to bring class actions 123 00:07:37,200 --> 00:07:40,200 Speaker 1: or collective actions, you effectively take away the right to 124 00:07:40,200 --> 00:07:43,560 Speaker 1: bring actions at all. Well, that was the very issue 125 00:07:43,640 --> 00:07:47,160 Speaker 1: that the court addressed in the antitrust context a couple 126 00:07:47,160 --> 00:07:50,640 Speaker 1: of years ago in a case called Italian Colors and Uh. 127 00:07:50,880 --> 00:07:54,560 Speaker 1: In that case, UH, they found that the class action 128 00:07:54,640 --> 00:07:59,160 Speaker 1: device was procedural. Uh. It'd be interesting to see whether 129 00:08:00,120 --> 00:08:04,480 Speaker 1: the same justices extend that rule to the workplace. Paul. 130 00:08:05,080 --> 00:08:07,680 Speaker 1: Let me let me follow up on extending rules here 131 00:08:07,800 --> 00:08:11,040 Speaker 1: and ask you this. If the this is these are 132 00:08:11,080 --> 00:08:13,520 Speaker 1: hour and wage cases about you know, when people work 133 00:08:13,520 --> 00:08:15,080 Speaker 1: and how much they get paid, how many hours they 134 00:08:15,080 --> 00:08:18,320 Speaker 1: have to work. If the if the employers win on 135 00:08:18,360 --> 00:08:20,880 Speaker 1: this is the principle going to extend into things like 136 00:08:20,960 --> 00:08:28,080 Speaker 1: anti discrimination lawsuits as well? Well? It certainly could. Uh, 137 00:08:28,120 --> 00:08:33,200 Speaker 1: and in some ways under arbitration agreements. Uh. Those types 138 00:08:33,240 --> 00:08:39,480 Speaker 1: of claims are already covered on an individual basis. Mark, 139 00:08:40,040 --> 00:08:42,760 Speaker 1: let's talk about the importance of this case. It's being 140 00:08:42,800 --> 00:08:45,920 Speaker 1: called one of the most or the most important business 141 00:08:46,120 --> 00:08:50,800 Speaker 1: case of the term. What are the implications here again, June, 142 00:08:50,840 --> 00:08:53,560 Speaker 1: I think the real question is whether we're going to 143 00:08:53,600 --> 00:08:59,720 Speaker 1: protect corporations from liability for violating the Fair Labor Standards Act, 144 00:09:00,120 --> 00:09:03,959 Speaker 1: national Aabor Relations Act, or we're going to insulate them 145 00:09:04,000 --> 00:09:06,960 Speaker 1: by taking away a very important right on the part 146 00:09:06,960 --> 00:09:10,560 Speaker 1: of employees or individuals to gather together and try to 147 00:09:10,600 --> 00:09:14,520 Speaker 1: balance the scales of justice. And that's where the ideological 148 00:09:14,520 --> 00:09:18,319 Speaker 1: differences between the sides in these cases. Paul, what about 149 00:09:18,360 --> 00:09:22,560 Speaker 1: Justice Gorcitch. He is generally expected to be a conservative 150 00:09:22,640 --> 00:09:25,520 Speaker 1: vote on most things, but was apparently silent today. Do 151 00:09:25,559 --> 00:09:28,800 Speaker 1: we have any idea, based on how he's ruled in 152 00:09:28,960 --> 00:09:32,520 Speaker 1: other cases, how he might approach a case like this. Well, 153 00:09:32,559 --> 00:09:37,560 Speaker 1: this is a a well trod path where you have 154 00:09:37,720 --> 00:09:43,040 Speaker 1: two statutes that are allegedly on a collision course. Uh 155 00:09:43,080 --> 00:09:47,880 Speaker 1: and Uh. This type of statutory interpretation is right up 156 00:09:47,920 --> 00:09:51,320 Speaker 1: justice course such as ali Uh. And so I wouldn't 157 00:09:51,320 --> 00:09:53,640 Speaker 1: be surprised if if we heard from him, even though 158 00:09:53,640 --> 00:09:56,520 Speaker 1: he was silent today at the argument when the opinion 159 00:09:56,559 --> 00:10:00,800 Speaker 1: comes out, Mark, over the past decade, Aid, the Supreme 160 00:10:00,840 --> 00:10:05,880 Speaker 1: Court has backed arbitration agreements between companies and consumers or 161 00:10:05,920 --> 00:10:09,840 Speaker 1: other businesses. Is there any reason to believe that they 162 00:10:09,880 --> 00:10:12,920 Speaker 1: would deviate from that in this case? Well, sadly, I 163 00:10:12,920 --> 00:10:14,840 Speaker 1: think the answer to that is no. That the Court 164 00:10:14,880 --> 00:10:20,599 Speaker 1: has moved even farther in in the direction of protecting corporations, 165 00:10:20,840 --> 00:10:24,079 Speaker 1: and and that means that they're more likely, not less likely, 166 00:10:24,120 --> 00:10:27,360 Speaker 1: to enforce the arbitration provision here. Paul, do you agree 167 00:10:27,400 --> 00:10:31,880 Speaker 1: with that? Yeah, I don't see it as protecting corporations. 168 00:10:31,920 --> 00:10:35,320 Speaker 1: I see it as forum selection and and a alternative 169 00:10:35,360 --> 00:10:39,800 Speaker 1: dispute resolution, uh, mechanism that's more suited for the types 170 00:10:39,840 --> 00:10:42,600 Speaker 1: of claims that come up in the workplace than the 171 00:10:42,640 --> 00:10:47,400 Speaker 1: federal or state courts. Well, why isn't Marked that employers 172 00:10:48,120 --> 00:10:51,760 Speaker 1: like arbitration so much more than court court has? But 173 00:10:51,880 --> 00:10:54,720 Speaker 1: they don't. They don't like arbitration more than court houses. 174 00:10:54,760 --> 00:10:58,199 Speaker 1: But this is the vehicle they've chosen for avoiding liability 175 00:10:58,440 --> 00:11:01,120 Speaker 1: in for example, in the Granddaddy of them All and 176 00:11:01,240 --> 00:11:04,640 Speaker 1: concepts Ione A T and T S arbitration provision says, 177 00:11:05,120 --> 00:11:07,360 Speaker 1: we want you to arbitrate your claims, and you can't 178 00:11:07,520 --> 00:11:10,360 Speaker 1: arbitrate as a collective or a class action. But oh, 179 00:11:10,440 --> 00:11:14,680 Speaker 1: by the way, if that class action waiver is invalidated, 180 00:11:14,920 --> 00:11:17,560 Speaker 1: then we want you to suice in court that that 181 00:11:17,640 --> 00:11:20,720 Speaker 1: juxtaposition tells you everything you need to know. This isn't 182 00:11:20,760 --> 00:11:23,920 Speaker 1: about arbitration as a forum versus the Federal Court as 183 00:11:23,960 --> 00:11:27,360 Speaker 1: a forum. This is about class actions versus individual actions. 184 00:11:27,559 --> 00:11:30,840 Speaker 1: And the arbitrators here who filed the amicus brief put 185 00:11:30,840 --> 00:11:34,240 Speaker 1: their finger right on it. Individual claims are too small 186 00:11:34,320 --> 00:11:37,200 Speaker 1: to being litigated efficiently, so they don't get litigated at all. 187 00:11:37,280 --> 00:11:39,520 Speaker 1: It's a free pass for wrong doors, that's all it is. 188 00:11:40,320 --> 00:11:44,040 Speaker 1: Well our thanks to Mark Rifkin of wolf Haldenstein and 189 00:11:44,080 --> 00:11:46,600 Speaker 1: Paul Salvataur of Proscouer for being with us here today 190 00:11:46,640 --> 00:11:49,520 Speaker 1: to talk about the Supreme Court's first day back litigating 191 00:11:49,520 --> 00:11:51,760 Speaker 1: an important employment case.