May 23, 2018
The U.S. Supreme Court ruled on Monday that class action waivers in arbitration agreements do not violate the National Labor Relations Act (NLRA) and are enforceable under the Federal Arbitration Act (FAA). The Court’s 5-to-4 decision in Epic Systems Corp. v. Lewis resolved one of the most hotly-contested workplace issues in recent years, and is a significant win for employers. The decision also is yet another reason why every employer should consider requiring that their nonunion employees sign arbitration agreements, and include a class action waiver in those agreements.Background
The Supreme Court’s decisionIn Monday’s decision, the Supreme Court concluded that the ability to bring a class/collective action is not a concerted activity that is protected under the NLRA. In reaching this conclusion, the Court ruled the NLRB’s position to the contrary was not entitled to any deference. The Court also noted that the FAA (which was enacted 10 years before the NLRA) established a liberal policy in favor of enforcing the agreed-upon terms in arbitration agreements, and that an exception to enforceability found in the FAA’s so-called “savings clause” did not require a different result.
What this Decision Means for EmployersThe Court’s decision in Epic Systems reaffirms that every nonunion employer should consider taking advantage of the benefits of requiring their employees to sign arbitration agreements that include class/collective action waivers. For employers that already have arbitration agreements in place but they do not include a class/collective action waiver, those employers should consider adopting new arbitration agreements that include that waiver.
Michael G. McClory joined Bullard Law in 1997. He likes talking about employment law, debating it, proposing revisions to it and even complaining about it. Perhaps so they could get some work done, his colleagues at Bullard Law suggested that he start a blog about employment law issues (broaden the conversation). And that is how this blog came to be.
The blog is a forum for discussion about employment, labor and benefits law - new laws, proposed laws, case decisions and social events. Mike will share his views and invites you to respond. Reader feedback is valuable and will be featured from time to time. Join the discussion with Mike and sign up for the Bullard Law Blog today.