In a significant decision issued a few weeks ago, the U.S. Supreme Court ruled in the case of Epic Systems Corp. v. Lewis that the National Labor Relations Board (NLRB) was wrong in asserting that an employer could not bar an employee’s right to invoke class arbitration without unlawfully interfering with the employee’s protected rights under the National Labor Relations Act (NLRA). The Court held that under the Federal Arbitration Act (FAA), written agreements to arbitrate must be enforced according to their terms – even if those terms restrict or bar the availability of class-based procedures.
The Epic Systems ruling is premised on the fact that class-based procedures change the nature of arbitration proceedings so substantially as to interfere with many of arbitration’s fundamental attributes, such as allowing for efficient, streamlined procedures tailored to the particular type of dispute at issue. Importantly, the ruling does not change substantive law; it merely holds that class arbitration waivers contained in otherwise valid arbitration agreements are fully enforceable with respect to employment-based claims.
NT Lakis attorneys have prepared a guide that offers some context and practical tips for employers that may be thinking about implementing or updating existing arbitration programs in light of Epic Systems. It is not intended to constitute legal advice, however, and companies that are considering implementing Employment Dispute Resolution programs or making changes to their existing procedures should consult with legal counsel.
Members of the Center for Workplace Compliance (CWC) can read more here.