Supreme Court Enforces Class Action Waivers in Employment Documents
In the recently decided Epic Systems Corp. V. Lewis, the Supreme Court analyzed the arbitration clauses in three different employers’ employment documents to determine whether or not the clause prevents an employee from bringing Fair Labor Standards Act and related state law claims through class actions in federal court. The employees argued that the savings clause of the Federal Arbitration Act negates the requirement to arbitrate if the agreement violates some other federal law, and that the individual proceedings requirement violated the National Labor Relations Act. The employers argued that the Federal Arbitration Act controls. The Court ruled that the Arbitration Act must be enforced, thus precluding an employee who has signed such a clause from participating in class action or other collective lawsuit. The ruling gives employers confidence that if they include an obligation to arbitrate disputes, it will be binding on their employees. Employees, on the other hand, will be precluded, if they are subject to an arbitration provision, from joining a class action or other collective suit in federal court.