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Do Employees Not Have 'True Liberty' in Their Dealings with Employers?

"There is no true liberty to contract on the part of the employee."

- Justice Ruth Bader Ginsburg


Free market principles dictate that people can enter into transactions with each other as they see fit. The "at will" concept - in which an employer can fire an employee without being required to explain why (and an employee can leave his or her job without reason or notice) - aligns with free market principles, those of unfettered supply and demand.

In general, this presumes that employers and workers enter into employment contracts with relatively equal bargaining power - but that is not always, perhaps not usually, true. And if the free market doesn't necessarily demand equal bargaining power between negotiating parties, at least it does require both parties' ability to freely contract, which arguably does not exist in the typical employer-employee relationship.

Case in point: At issue in front of the U.S. Supreme Court now is the right of employees to join class actions against their employers, and in this case, Justice Ginsburg said, "There is no true liberty to contract on the part of the employee."

What did she mean by true liberty?

As Greg Stohr reports for Bloomberg, Justice Ginsburg said that employees really don't have any other options - it's either sign the employer's paperwork, which in many cases means signing up for employer-backed arbitration agreements as the method for resolving disputes, or you don't get the job. In effect, this means workers give up their right to pursue legal actions in court.

And troublingly, as Stohr's report points out, some of these arbitration agreements not only force employees into arbitration, but preclude employees' ability to join together in class actions.

Read more:

Supreme Court Justices Suggest They'll Split on Workers' Class-Action Rights

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