Siding with corporate power, Supreme Court supports company that sought to block class action lawsuit

This is a developing story and may be updated.


The U.S. Supreme Court on Wednesday sided with corporate interests by ruling against a worker who had sought to band together with other employees to bring forth a class action lawsuit against a company.

It was a 5-4 decision (pdf), with conservatives in the majority.

The case, Lamps Plus, Inc. v. Varela, "hinged on whether courts can allow arbitration as a group even if an agreement does not explicitly provide for the collective arbitration of claims," Reuters reported.

The company argued that the ambiguous arbitration agreement in Frank Varela's employment contract meant he could not file a class action suit on behalf of employees whose personal information was exposed in a data breach.

The court "has held that courts may not infer consent to participate in class arbitration absent an affirmative 'contractual basis for concluding that the party agreed to do so,'" wrote Chief Justice John Roberts for the majority. "Silence is not enough."

"That reasoning controls here," Roberts added. "Like silence, ambiguity does not provide a sufficient basis to conclude that parties to an arbitration agreement agreed to 'sacrifice the principal advantage of arbitration.”

Justice Ruth Bader Ginsburg authored a dissent "to emphasize once again how treacherously the court has strayed from the principle that 'arbitration is a matter of consent, not coercion.'”

Referring to Lamps Plus worker at the heart of the lawsuit, Ginsburg wrote that the "widely experienced neglect he identified cries out for collective treatment."

"Today's decision underscores the irony of invoking 'the first principle' that arbitration is strictly a matter of consent.. to justify imposing individual arbitration on employees who surely would not choose to proceed solo," said Ginsburg.

"Employees and consumers forced to arbitrate solo," Ginsburg added, "face severe impediments to the 'vindication of their rights.'"

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