In yet another decision highlighting the Roberts Court’s tendency to favor corporations over individual citizens, the Supreme Court on Monday made it more difficult for employees and consumers challenging their contracts to seek justice in court.
In Rent-A-Center v. Jackson, Antonio Jackson filed suit in a Nevada federal district court against his employer, Rent-A-Center, claiming that he had suffered racial discrimination and retaliation. Rent-A-Center tried to dismiss the lawsuit and force Jackson to move the dispute to arbitration, as was required by Jackson’s employment contract. The district court agreed with the company, but the Ninth Circuit court reversed, holding that when a person opposing arbitration claims that he or she could not have meaningfully consented to the agreement, the question of whether the original contract was fair must be decided by a court.
In a 5-4 opinion written by Justice Scalia, the Supreme Court overturned the Ninth Circuit’s ruling, saying that Mr. Jackson failed to specifically challenge the arbitration provision in the agreement that requires challenges to the validity of the entire agreement to also be decided by an arbitrator. Previously, if an employee challenged certain aspects of a contract that included a binding arbitration clause but not necessarily the arbitration clause itself, the dispute would go to the arbitrators. However, the Court’s decision expanded upon that to hold that even if an employee argues that the entire contract – including the arbitration clause – was unconscionable and therefore unenforceable, that person is still denied access to the courts unless he specifically and separately challenged the arbitration clause. In other words, arguing that the entire contract is illegitimate is not enough.
Treated as contracts, arbitration clauses waive one’s rights to go to court, meaning that any disputes must instead be settled through private arbitration. Often built into the fine print of a contract, these clauses are very common in the consumer context and usually there is little choice but to sign or not sign the contract. Most people at some point or another will become bound to an agreement with an arbitration clause, perhaps as part of a cell phone contract, a health insurance plan, or an employment contract. Although they are ostensibly for the benefit of both parties, they are primarily drafted to protect companies from litigation, as it is often too expensive for a claimant to even initiate the arbitration proceedings, much less pay the arbitrator’s hourly fees. In a telling signal of what a majority of the Court today thinks about these practical obstacles for ordinary Americans, Justice Scalia, in oral arguments, dismissed people who sign arbitration agreements as “stupid.”
Forced arbitration is an increasing problem as these clauses become standard parts of everyday contracts, but they are particularly troubling in civil rights cases such as this one. Mr. Jackson’s claim that his employer discriminated against him based on his race was brought under section 1981 of the Civil Rights Acts – legislation that was passed specifically to ensure that victims of such discrimination would have access to the federal courts. Instead, because Mr. Jackson signed an employment agreement – an agreement that he had little choice but to sign if he wanted the job – he is now precluded from asserting a violation of those rights and seeking justice in court.
As confirmed in Justice Stevens’ dissent, neither party even asked the Court for such a heightened standard of pleading, showing how once again, the Roberts Court is going out of its way to protect corporations and prevent real citizens – workers and consumers – from being able to access the federal courts.