Liz Watson, Senior Counsel

Here’s a little story about an inspiring group of workers to help jumpstart your week after the long Labor Day weekend.

Last week I spoke with folks from the Coalition of Immokalee Workers (CIW) – an awe-inspiring group making extraordinary progress on behalf of tomato pickers in Florida. Here is what I learned:

The Coalition of Immokalee Workers (CIW) have brought together 11 of the major food retailers that buy tomatoes to agree that they will only buy from growers who sign a Fair Food Code of Conduct that includes complying with health & safety, wage and hour, sexual harassment and other labor and employment laws, and in many cases that they will adhere to standards beyond what the law requires. This put pressure on the growers to sign the Fair Food Agreement, and in 2010, 90% of Florida’s tomato growers joined the program. Participating tomato growers show a video to tomato pickers when they are hired that explains their rights under the agreement, and workers can call a 24-hour complaint hotline when their rights are violated!

In yesterday’s 5-3 Supreme Court decision in American Express Company v. Italian Colors Restaurant, the Court held that it was just fine to enforce a contract requiring merchants to arbitrate their claims and waiving their rights to come together to challenge the contract’s terms in federal court. Never mind that as a result of the Court’s decision, the merchants’ legal claims against Amex under the federal antitrust laws are dead on arrival, without any determination of their merits ever being made. This is because the expense of proving their claims is totally unaffordable for the individual merchant, and only becomes affordable when spread across the class of those who were allegedly harmed. 

While this case arose in the consumer context, no doubt some will argue that it gives courts free rein to enforce arbitration clauses with class-action waivers in employment contracts as well, despite the recent holding by the National Labor Relations Board (more on this below) to the contrary. 

Here’s what happened: Italian Colors, a small restaurant, brought a class action on behalf of itself and other merchants alleging that behemoth Amex used its monopoly power in the corporate charge card market to force merchants to agree to pay 30% higher fees than they pay for accepting other credit cards. The total damages a merchant might have recovered in this case were a significant amount: $38K. But the total cost to that same plaintiff of presenting the economic analysis (central to practically every antitrust case) to establish a violation of the antitrust laws would have run from a few hundred thousand to one million dollars. That’s roughly 10 to 25 times more than the potential recovery to an individual merchant. 

Taking on this expense would be, as Justice Kagan noted in her dissent, “a fool’s errand” for an individual business.