Supreme Court Says Tough Luck to Workers Whose Tax IDs Were Hacked in Employer’s Database

Split along conservative-liberal lines, the Supreme Court issued a stunning decision last week.

Meet Frank Varela, a Lamps Plus employee in California. A computer hacker got into his employer’s HR database. He was tricked into divulging current tax information. About 1,300 other employees bit on the bait.

The hacker filed a fraudulent tax return in Varela’s name. Varela wanted to sue his employer but could not. As an alternative, he wanted to pursue a class-action claim in arbitration.
His employer—like 54% of employers in the private sector— required Varela and his co-workers any right to sue in a federal or state court. They were compelled to arbitrate their claims.

The law in this area is simply awful for the little guys of the world. Not only are people forced to forego court: If their employers put in a class action waiver for the arbitration hearing, that, too, is allowed.

What this means is that employers can avoid legal liability by conditioning new or continuing employment on a person’s “voluntary” waiver. 
The laws that Congress and states pass to protect employees? Ordinary workers cannot vindicate their rights.

In this case, Lamps Plus did not put a class waiver into the arbitration agreement. 
That was probably a mistake on the part of the company’s attorneys (or failure to update their form agreement).  
The Ninth Circuit, therefore, allowed the arbitration claims to proceed as a class.

Last week, the Supreme Court cleaned up the employer's mistake. They voted 5-4 to “infer” that the company waived its class action limitation.

That is stunning. Conservative judges supposedly read laws and contracts strictly— they reject the very kind of “reading-in” terms as some liberal judges do.

Justice Kagan dissented. She said the “heart of the majority’s opinion” is a how-to guide for “cataloging of class arbitration’s many sins.” In her view, the majority engaged in a policy-driven determination.
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Soon, I hope to blog President Trump’s new regulation that protects health care workers who refuse to provide care on grounds of religion or “conscience.” 
Presumably, those workers are subject to forced arbitration. I can well imagine a pharmacist who refuses to dispense a morning-after prescription, or a nurse who refuses to care for gay man who has an STD (there are many other possibilities). Their employers will insist on following work orders or be fired.

The five conservative judges are extremely narrow in their view of protected liberties. 
They have had immense power in curbing employee rights since the late 1980s.

The day is coming, however, when they will have to choose between blindly protecting employers and blindly protecting evangelicals. That’s what happens when judicial power in the area of arbitration is unchecked and unbalanced for decades.