The U.S. Supreme Court in Epic Systems Corporation v. Lewis upheld the enforceability of pre-dispute agreements that require an employee to arbitrate employment claims on an individual basis, rather than as a collective or class action. The Court held that it is not a violation of federal labor law for employees, as a condition of employment, to waive their right to participate in a class or collective action. Rather, under the Federal Arbitration Act, class and collective action waivers are enforceable.
Multi-plaintiff wage and hour lawsuits continue to outpace all other types of employment-related class claims, and class action harassment cases represent enormous risk for even the most diligent companies. Wage and hour disputes have increased over 400 percent in the past decade. Consequently, employers susceptible to large class claims should consider adding these waivers in their arbitration agreements and/or removing opt-out clauses, which allow employees to opt-out of arbitration. Additionally, to guarantee enforceability of pre-dispute arbitration agreements, employers need to draft the provisions carefully, as courts can still invalidate agreements in a variety of circumstances. Arbitration agreements, including class or collective action waivers, are not one-size-fits-all. Some employers, based on their size, location and overall risk management objectives, may find that court or administrative venues are more effective dispute resolution options. We can help you make the right choice.
Young Basile has experienced employment litigation attorneys who can advise you on all employment-related issues and answer your questions about how the Court’s Epic Systems decision impacts your organization. Learn more about Young Basile’s litigation group.
Jeffrey D. Wilson
Litigation Department Director