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US Supreme Court divided over key employment dispute

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(Reuters) — Liberal U.S. Supreme Court justices on Monday defended the right of workers to bring class action lawsuits against companies but their conservative counterparts who are in the majority sounded skeptical in the biggest business case of the court's new term.

The case focused on whether employers can require workers to sign arbitration agreements that curb their ability to bring class action claims. Republican President Donald Trump's appointee to the court, Justice Neil Gorsuch, did not speak during the one-hour argument but could provide the deciding vote.

Liberal Justice Stephen Breyer said he was worried that a ruling against the workers would imperil "the entire heart of the New Deal," a reference to laws and programs enacted in the 1930s under President Franklin Roosevelt to help workers during the Great Depression.

Fellow liberal Justice Ruth Bader Ginsburg made similar remarks, saying that the ability of workers to join together to bring claims against their employer was the "driving force" behind a key federal law enacted to regulate labor disputes.

Class action litigation can result in large damages awards by juries and is harder for businesses to fight than cases brought by individual plaintiffs.

At stake is the future of so-called class action waivers, which employers have increasingly required employees to sign to guard against a rising tide of worker lawsuits seeking unpaid wages.

The court has had a 5-4 conservative majority since Justice Gorsuch was confirmed by the Senate in April, but two of the five conservative justices were silent: Justice Gorsuch as well as Justice Clarence Thomas, who typically does not speak during oral arguments.

Justice Anthony Kennedy, often the swing vote in major cases, asked questions that appeared to favor employers, as did two fellow conservatives, Chief Justice John Roberts and Justice Samuel Alito.

Justice Kennedy indicated that a loss for workers would not prevent them from acting in concert because they would still be able to join together to hire the same lawyer to bring claims, even though the claims would be arbitrated individually. That would provide "many of the advantages" of collective action, Justice Kennedy said.

Hearing roughly an hour of arguments in the case, the nine justices opened their new nine-month term after a three-month break with a series of major cases lined up in the coming months regarding voting rights, religious liberty, union funding and other issues.

The Trump administration sided with companies that contend that agreements requiring workers to arbitrate disputes with their employers individually, rather than bringing class action lawsuits collectively with their co-workers, are valid.

The three consolidated cases that came before the justices involved professional services firm Ernst & Young L.L.P., gas station operator Murphy Oil USA Inc. and health care software company Epic Systems Corp.

In an unusual twist, the administration faced off against an independent agency of the federal government, the National Labor Relations Board, in the justices' ornate courtroom.

The Justice Department in June reversed the government's previous position taken in the case under Democratic President Barack Obama, deciding not to defend the NLRB's stance that employment agreements requiring workers to waive their rights to bring class action claims are invalid.

The NLRB argues that those agreements violate federal labor law and let companies evade their responsibilities under workplace statutes.

Many attorneys representing businesses say that resolving workplace disputes through arbitration with individual employees is a speedy and cost-effective alternative to class action litigation.

About one in four private-sector nonunion employees — nearly 25 million workers — have signed arbitration agreements with class action waivers, according to a study by the left-leaning Economic Policy Institute think tank.

Workers have fought back against the waivers, arguing that the cost of pursuing their cases individually in arbitration is prohibitively expensive. The prospect of winning a large damages award in a class action can be the only way for workers to find lawyers to take their cases, they argue.

The NLRB has invalidated dozens of class action waivers for violating workers' legal right to band together to improve the workplace.