In a closely watched – and closely decided – ruling, today the Supreme Court upheld the enforceability of class and collective action waivers in employment arbitration agreements. Epic Systems Corp. v. Lewis, 137 S. Ct. 809, 2018 U.S. LEXIS 3086 (May 21, 2018) (consolidated cases). The Court’s decision resolves the circuit split on whether such waivers violate the National Labor Relations Act (NLRA). In a 5-4 decision authored by Justice Neil Gorsuch, with Justice Kennedy reprising his oft-recurring role as the swing vote, the Court held that arbitration agreement provisions requiring only individualized proceedings are enforceable and neither the Federal Arbitration Act (FAA) nor the NLRA dictate otherwise.
Jackson Lewis was counsel in one of the consolidated cases, where it successfully argued to the Fifth Circuit Court of Appeals that such waiver provisions are enforceable, a ruling that was affirmed by the Supreme Court today. Conversely, the decisions of two other circuit courts (the Seventh and the Ninth), which recently had deemed the waiver provisions unenforceable, were reversed. Today’s ruling will be of particular benefit to employers with respect to wage and hour claims, where collective action lawsuits under the FLSA, and corresponding class actions under many state laws, have become prevalent (and exceedingly costly) in recent years. For a detailed discussion of today’s ruling, click here.
If you have any questions about today’s ruling, arbitration agreements or any other wage and hour issue, please contact the Jackson Lewis attorney(s) with whom you regularly work.