Arbitration -- 2018

Epic Systems Corp. v. Lewis   (U.S. Supreme Court)

Permissibility of class-action waivers and mandatory arbitration provisions

This case asks the Supreme Court of the United States to resolve a lower court split regarding the permissibility of class-action waivers and mandatory arbitration provisions in employment contracts. The class-action waiver allows employers to resolve disputes with individual employees on particular issues without having to address an entire class of plaintiffs in a given case. The mandatory arbitration provision allows informal and efficient dispute resolution.

One circuit court (the Fifth) found that class-action waiver and arbitration provisions are permissible under the Federal Arbitration Act (FAA) and the National Labor Relations Act (NLRA) as long as the agreement explains that employees can file grievance claims to the National Labor Relations Board (NLRB), whereas others (the Seventh and Ninth) found that the two provisions violate employees’ rights under the NLRA.

The NAM filed two amicus briefs in this appeal, which was combined with the similar Ernst & Young, LLP v. Morris case, arguing that the provisions are valuable to employment and are not governed by the NLRA. They encourage efficient employment practices by providing lower costs to the parties and faster results in a dispute, thus avoiding drawn-out and costly litigation. Additionally, our briefs argued that these agreements are governed under the FAA and the courts should not defer to interpretations of that law by the NLRB.

Oral arguments were held Oct. 2, 2017. On May 21, 2018, the U.S. Supreme Court upheld the enforceability of arbitration agreements that waive an employee’s right to participate in class action lawsuits against the employer.

Related Documents:
NAM amicus brief on the merits  (June 16, 2017)
NAM amicus brief supporting review  (October 3, 2016)


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