Opinions: Arbitration Agreements in Employment Contracts and Sovereign Immunity for Indian Tribes

Justice Gorsuch wrote the two opinions announced earlier this week. The first, Epic Systems Corp. v. Lewis, was a 5-4 decision, and it upheld the ability of employers to require their workers to settle employment disputes through individual arbitration rather than by collective suits or arbitrations. This holding reversed the National Labor Relations Board’s determination that collective or class actions brought by employees are “concerted activity” protected by the National Labor Relations Act (NLRA) and that the NLRA’s protections precluded application of the Federal Arbitration Act, the statute that requires courts to honor arbitration agreements. Instead, as Robert Barnes of The Washington Post explains, the majority relied on what it called a “logical” reading of federal law and Congress’s preference for arbitration over litigation. The Court held that the intent of the Federal Arbitration Act is to enforce arbitration agreements as written and that the National Labor Relations Act’s right of collective action does not displace the FAA. Adam Liptak of The New York Times notes Justice Gorsuch 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 mean to displace” if all disputes were settled by class or collective arbitrations. Justice Gorsuch was joined by Chief Justice Roberts and Justices Kennedy, Thomas, and Alito.

Justice Ruth Bader Ginsburg, wearing her black and silver crystal accent “dissent jabot,” read part of her dissenting opinion from the bench highlighting her wholehearted opposition to the majority. Joan Biskupic of CNN notes that Justice Ginsburg said the majority was “egregiously wrong,” and that the decision was “destructive” — a step backwards in many decades of labor law passed to level the playing field between workers and their employers. She termed the challenged arbitration agreements as “arm-twisted, take-it-or-leave-it contracts,” and argued that the decision threatens the return of pre-New Deal “yellow dog” contracts forbidding workers from joining labor unions. (Justice Gorsuch replied, “like most apocalyptic warnings, this one is a false alarm.”) Justice Ginsburg was joined by Justices Breyer, Sotomayor, and Kagan.

Check out the SCOTUSblog Symposium, as well as The Atlantic,  The Wall Street Journal,  The Cato Institute, and The Washington Examiner, for more commentary on this decision.

Justice Gorsuch also wrote the opinion in Upper Skagit Indian Tribe v. Lundgren, addressing whether Indian tribes have sovereign immunity in “in rem” lawsuits absent Congressional appeal or tribal waiver. (An “in rem” lawsuit concerns a particular piece of property.) Upper Skagit Indian Tribe bought Washington property in 2013. Two years later, the Lundgrens, who owned adjacent property, filed a quiet title action alleging that they owned a strip of the Tribe’s land. The Washington Supreme Court rejected the Tribe’s claim of sovereign immunity, holding that it applies only when a judge attempts to exercise in personam jurisdiction over the Tribe itself, relying on a 1992 case, County of Yakima v. Confederated Tribes and Bands of Yakima Indian Nation. The Court rejected this reliance on Yakima, holding that it addressed a narrow and inapplicable statutory question, and it remanded the case back to the Washington Supreme Court to address the sovereign immunity under the common law.

Chief Justice Roberts, joined by Justice Kennedy, concurred, explaining that although he agreed with the result in this case, “[t]he correct answer cannot be that the tribe always wins no matter what; otherwise a tribe could wield sovereign immunity as a sword and seize property with impunity.” Chief Justice Roberts was similarly displeased with the Solicitor General’s proposed solution that the Lundgren’s go onto the property in question and take some type of action, like building a shed, that would induce Upper Skagit to file a quiet title action, which could result in the Tribe waiving its sovereign immunity: “At the very least, I hope the Lundgrens would carefully examine the full range of legal options [. . .] before crossing onto the disputed land and firing up their chainsaws.”

The dissent, written by Justice Thomas and joined by Justice Alito, criticized the majority not reaching the underlying sovereign immunity question, or as one article put it: “Justices Punt Decision on Land Dispute with Tribe,” and argued that because the immovable-property exception applies to both state and foreign sovereign immunity, it should also apply to tribal immunity. Gregory Ablavsky, a professor at Stanford Law School discusses Justice Thomas’ dissent. Ablavski notes that while he agrees that “the immovable property exception has deep roots in international law,” he ultimately, “question[s] his [Justice Thomas’] blithe assumption that the same principle did, or should, apply to tribes.” The Jurist and JD Supra also discuss Upper Skagit.

ISCOTUS Fellows Matthew Webber, Chicago-Kent Class of 2019, Zoe Arthurson-McColl, Chicago-Kent Class of 2020, contributed to this post, which was edited by ISCOTUS Editorial Coordinator Anna Jirschele, Chicago-Kent Class of 2018 and overseen by ISCOTUS co-director and Chicago-Kent faculty member Carolyn Shapiro.

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