The Supreme Court of the United States today greatly enhanced employers' ability to restrict their employees' ability to bring class actions against them. In Epic Systems v. Lewis, the Court, in a 5-4 decision, combined three pending cases before it to announce that employers and employees may agree that any and all disputes between them will be resolved through one-on-one arbitration. The Court's ruling stated that under the Federal Arbitration Act, arbitration agreements are to be enforced according to their terms, including terms that provide for individualized proceedings only (in other words, terms that include a waiver of the right to bring a class action). In doing so, the Court reversed the position of the National Labor Relations Board that class action waivers in arbitration agreements were not allowed under federal law.
The impact on employers is clear. Employers who are susceptible to class action claims should consider instituting mandatory arbitration provisions--that include a class action waiver--in their onboarding documents. While there always have been sound reasons, such as cost, to favor mandatory arbitration over litigation, the ability to protect yourself from class action lawsuits is invaluable. Your Labor & Employment team at Spilman Thomas & Battle will be reviewing the case in more detail in the upcoming SuperVision Today newsletter.
