Rosen Harwood Blog

A Help to Employers

Supreme Court Holds Class Action Waiver in Arbitration Agreements Enforceable

Some good news for many employers came from the U.S. Supreme
Court last week. The Supreme Court ended a long-standing debate over
the enforceability of arbitration agreements with class action waivers in
the employment context, particularly as applied to the wage and hour
class action litigation. The Supreme Court has ruled that such waivers
are enforceable and do not violate the National Labor Relations Act.

On May 21, 2018, the United States Supreme Court decided in Epic Systems
Corp. v. Lewis that it is legal for employers to include class action waivers
in their employment and/or arbitration agreements. Furthermore, such
waivers are fully enforceable under the Federal Arbitration Act (“FAA”)
and the National Labor Relations Act (“NLRA”). Moving forward, unless
an affi rmative defense such as fraud or duress applies, arbitration
agreements with employees containing a class action waiver will likely
be enforceable.

What this could mean for you:
  • If you do not currently have arbitration clauses in your employment agreements, you may want to review such agreements and consider adding them.
  • If you already have arbitration clauses in your employment agreements, you may want to consider adding class action waiver provisions to the agreement.
The benefits of adding class action waivers:
  • The overall reduction of number of class or collective actions as well as the number of overall individual claims against your company.
  • Individual claims will have a lot lower dollar value and therefore less incentive for lawyers to pursue these claims.
  • Individual claims will be much easier to quantify which should ultimately expose the claim to pre-arbitration settlement.
Review your employment agreements.

Get with your attorney and have them review your employment
agreements and revise them, if needed. If you do not have an attorney
and would like assistance, please call me at 205.469.2368 or feel free to
email me at drains@rosenharwood.com.

David E. Rains

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