A Supreme Court decision this week could lead to a seismic shift in how class action suits are filed against employers.
In a trio of cases consolidated in Epic Systems Corp. v. Lewis, the U.S. Supreme Court held that arbitration agreements prohibiting class actions are enforceable. The decision overturns a 2012 National Labor Relations Board ruling striking down anti-class action provisions based on the National Labor Relations Act.
In Epic, the employee agreed that he would arbitrate any disputes that might arise between them. The agreement also specified that all claims pertaining to different employees would be heard in separate proceedings instead of in a collective action or class action. The Court noted that the Federal Arbitration Act generally requires courts to enforce arbitration agreements as written. The Court held, “Congress has instructed that arbitration agreements like those before us must be enforced as written. While Congress is of course always free to amend this judgment, we see nothing suggesting it did so in the NLRA – much less that it manifested a clear intention to displace the Arbitration Act.”
Attorneys representing employees have used class action to combine small employment claims into very large lawsuits. Today’s Supreme Court decision will put the brakes on attorneys filing class action lawsuits that were given the green light by the NLRB. Employers who had either removed their anti-class action provisions in their arbitration agreements or employers who did not bother to include these provisions in their arbitration agreements because of the NLRB’s decision should now seriously consider putting them in their arbitration agreements.