On Monday, May 21, 2018, in a 5-4 opinion, the United States Supreme Court issued a long-awaited decision in the case, Epic Systems Corp. v. Lewis, on the issue of the enforceability of class action waivers in arbitration agreements that bar employees from joining together in class action claims, holding such waivers to be enforceable. Employers now have the benefit of including class action waivers in arbitration agreements without the uncertainty of the last several years, when jurisdictions differed regarding their enforceability.
The challenge to enforceability in the case rested on the argument that the National Labor Relations Act (the “NLRA”) provides employees the right to seek relief on a class basis. The Supreme Court ultimately concluded that the NLRA does not override the Federal Arbitration Act, which requires courts to enforce agreements to arbitrate, including the terms of arbitration selected by the parties.
This decision consolidated three cases that represented a split among federal court circuits.
The three cases include Morris et al v. Ernst & Young, LLP, in which the U.S. Court of Appeals for the Ninth Circuit, which includes California, rendered a decision contrary to the current Supreme Court ruling.
The author would like to gratefully acknowledge the assistance of Joanne Warriner.
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