On May 21, 2018, the United States Supreme Court issued its much anticipated decision in Epic Systems Corp. v. Lewis.  In a 5-4 decision written by the newest jurist, Justice Gorsuch, the Court declares that employers can require employees to arbitrate their employment disputes individually and waive their rights to resolve those disputes through class or collective actions.

Background.

The case was a consolidation of three cases (Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA, Inc.).  In each case, the employees brought a class action under the federal Fair Labor Standards Act (“FLSA”) and related state law against their employer on behalf of themselves and similarly situated employees for wage and hour violations. However, in each of the cases, the employees had entered into an agreement with their employer providing for individualized arbitration proceedings to resolve employment disputes between the parties. Although the Federal Arbitration Act (“FAA”) generally requires courts to enforce arbitration agreements as written, the employees argued that the FAA’s “savings clause” removes this obligation if an arbitration agreement violates some other federal law and that, by requiring individualized proceedings, the agreements they signed violated the National Labor Relations Act (“NLRA”).
Continue Reading GOOD NEWS EMPLOYERS – The U.S. Supreme Court Says You Can Require Class Action Waivers In Your Arbitration Agreements