What Happened?
On May 21, 2018, the United States Supreme Court ruled in Epic Systems Corp. v. Lewis that employers can require employees to arbitrate disputes with the employer (including disputes arising under the Fair Labor Standards Act) individually and waive their right to pursue or participate in class or collective actions against their employer. This ruling resolved a split among circuit courts because some circuits (including the 9th Circuit) found such waivers were unenforceable as a matter of law. The Supreme Court concluded, “Congress has instructed federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized proceedings.”
What this Means?
This decision is a significant win for employers. Before Epic Systems, the wisdom of requiring employees to arbitrate employment disputes was debatable. That debate is over. The benefit of avoiding the oppressive expense and catastrophic legal exposure faced by employers in defending class and collective employment law actions far outweighs any arguable downside of arbitration.
What to Do?
Implement an employment dispute arbitration agreement (or amend your organization’s existing arbitration agreement) to include an explicit class and collective action waiver. We are available to assist your organization with this process.