SCOTUS Arbitration Decision


Yesterday, the U.S. Supreme Court (5-4) upheld the right of employers and employees to agree to submit disputes to one-on-one arbitration. The decision is NLRB v. Murphy Oil USA, Inc. This is a great victory for the right of contract and opting out of the government courts in favor of private dispute resolving entities.

I really like Justice Gorsuch’s introduction to the opinion and his distinction between making policy and interpreting law. Here is a snippet:

Should employees and employers be allowed to agree that any disputes between them will be resolved through one-on-one arbitration? Or should employees always be permitted to bring their claims in class or collective actions, no matter what they agreed with their employers?

As a matter of policy these questions are surely debatable. But as a matter of law the answer is clear. In the Federal Arbitration Act, Congress has instructed federal courts to enforce arbitration agreements according to theirterms—including terms providing for individualized proceedings.

The New York Times sums up the decision as follows:

Writing for the majority, Justice Neil M. Gorsuch said the court’s conclusion was dictated by a federal law favoring arbitration and the court’s precedents. If workers were allowed to band together to press their claims, he wrote, “the virtues Congress originally saw in arbitration, its speed and simplicity and inexpensiveness, would be shorn away and arbitration would wind up looking like the litigation it was meant to displace.”

SCOTUS blog has this analysis of the ruling.

The Washington Post offers this summary.

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William J. Watkins, Jr. is a research fellow at the Independent Institute and the author of the award-winning Independent book, Crossroads for Liberty: Recovering the Anti-Federalist Values of America’s First Constitution.

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