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Supreme Court Ruling Allows Employers to Steal from Employees

Published June 4, 2018 by Employment and Consumer Law Group
Supreme Court Ruling Allows Employers to Steal from Employees

Last month the Supreme Court severely limited workers’ rights to fight employers who commit “wage theft” from their employees. It didn’t get the fanfare it should have since it didn’t involve any celebrities or the latest must-see video. However it’s one that is going to have long lasting effects on American working people for generations.

There is concern this ruling will erode our country’s reputation as putting the American working people first. Congress needs to take care of the people it is supposed to represent and fix this law.

The Fair Labor Standards Act (FLSA) was adopted in 1938 as part of FDR’s “New Deal” to combat worker abuses and extreme poverty. It was not uncommon back in those days for workers, as young as 5 years old, to be required to work 6 or 7 days a week, up to 18 hours a day, for less than $1 per day. ($1 a day in 1938 would be about $17 per day in 2018). The FLSA was put into place so that a person who was working 40 hours a week would make at least a “living wage”, an amount that allows a family to meet its basic needs, and provides it with some ability to deal with emergencies, without resorting to welfare or other public assistance.

To combat employers taking advantage of poor working folks by forcing employees to work around the clock just so they could afford to house and feed their family- the FLSA also required employers to pay overtime for hours worked over 40 in a workweek.

These wages, both minimum wage and overtime, are monies owed to an employee by law. When employers fail to pay employees their money, it is wage theft. The extent of wage theft often goes unnoticed. The total amount of money stolen by employers who commit wage theft is almost three times as much as money stolen from Americans in robberies.

One of the most important ways the FLSA allows workers to fight wage theft is to band together to bring their case in court. Bringing a lawsuit is expensive, sometimes tens of thousands of dollars. If a worker is owed hundreds of dollars- it would cost them more to file a lawsuit than they would be awarded by the court. The FLSA allowed Workers to band together to pool resources to pay litigation costs, attorney fees, etc. Employers were not able to just steal a “little bit from everyone” with no threat of suffering any recourse. Most of the time the victims of “wage theft” are poor and cannot afford protracted litigation against their employer.

By law, an employer cannot terminate an employee for inquiring about or attempting to enforce their rights under the FLSA. However when just one employee raises the issue rather than a group, retaliation is much more likely. It is easier for an employer to get away with illegally firing one person than it would be to illegally fire an entire group of employees. The National Labor Relations Act (NLRA) also states that employees have an absolute right to engage in “concerted activity”.

However the court’s decision allows employers to have workers sign away their right to band together to recover monies stolen from them. This is allowed through the use of “arbitration agreements” signed by the employee when they start their job.

The Court ruled these arbitration agreements are legal under the Federal Arbitration Act (FAA) even if they allow employers to take guaranteed rights away from employees. The court even acknowledged that the policy of no longer allowing workers to band together to bring these cases was “debatable”- but the language contained in the FAA was clear and it was to be enforced as written. In other words, the only way to change this decision the court seems to somewhat disagree with, is through Congress.

We rely on the legislature to take the side of citizens against thieves. We need them to say no matter who is committing the crime, they will be held accountable under the law. This includes employers who steal from their employees.

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