Supreme Court Hands Employers Win on Arbitration Clauses

In Epic Systems Corp v. Lewis, court holds that NLRA rights don’t interfere with federal arbitration law

Employers that require workers’ claims against them go to arbitration received big news last week.

The Supreme Court held May 21 that an employer’s right to enforce arbitration agreements under the Federal Arbitration Act doesn’t conflict with workers’ rights under the National Labor Relations Act. The decision in Epic Systems Corp v. Lewis, and the consolidated cases, extends the long-running streak of Supreme Court decisions supporting mandatory arbitration clauses, this time addressing employment arbitration specifically. While employer-side attorneys call the decision significant, they say employers should still be mindful of how they draft and enforce arbitration provisions for workplace issues.

The court decided Epic Systems in a 5-4 majority, which also applied to the consolidated cases of Ernst & Young LLP, et al v. Morris et al and NLRB v. Murphy Oil. In each of the cases before the court, workers sought to have their Fair Labor Standards Act wage-and-hour claims litigated as class or collective actions. In each case, the employer had employees sign agreements to arbitrate those claims.

But the plaintiffs argued that the National Labor Relations Act protects workers’ rights to class or collective actions, and that conflict makes the arbitration agreements null under the Federal Arbitration Act’s “saving clause.”

To read this story and other complete articles featured in the May 28, 2017 print edition of Law Week Colorado, copies are available for purchase online.