Supreme Court Upholds Employer Clauses that Prevent Class Actions, but Is It Really so Great?

The Supreme Court has released its decision in the Epic Systems case. The case sought to decide if an employment agreement waiver of class action litigation and associated agreement to arbitration to resolve disputes between the employer and employee prevented employees from banding together to share the cost of such arbitration. The Court had been asked to decide what, if any, interaction there is between the Federal Arbitration Act (1925), which allows employers to settle by arbitration, and the National Labor Relations Act (NLRA), which provides employees with the right to self-organize for the purpose of mutual aid or protection. The Supreme Court majority held that the NLRA does not evidence Congressional intent to preclude the enforcement of the waivers to class action litigation in lieu of individual arbitration. The case is being hailed as a victory for employers who expect to see fewer wage and hour claims and other federal employment law requirements since the cost of arbitration of a single claim is often cost prohibitive for a single employee. However, it isn’t so clear that this is a victory for small business.

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