Finally, a victory for employers!
Earlier today, on May 21, 2018, the United States Supreme Court issued its opinion in Epic Systems Corporation v. Lewis, ruling that employers can require employees to waive their right to bring class action claims. Employers can therefore compel new employees to sign arbitration agreements that waive their right to bring class action claims. This means that employees must pursue claims on an individual basis through arbitration hearings. Employees who sign valid class action waivers are prohibited from filing class action lawsuits in court or seeking class arbitration. This right extends to a variety of disputes, including, but not limited to wage and hour claims. At the moment, it is unclear whether the Supreme Court’s ruling applies to other claims such as discrimination, harassment, etc.
Today’s ruling is a monumental win for employers. Class action litigation is tremendously expensive and burdensome to defend.
Justice Neil Gorsuch wrote the Court’s decision, stating, among other things: “As a matter of policy, these questions are surely debatable…But as a matter of law the answer is clear. In the Federal Arbitration Act, Congress has instructed federal courts to enforce arbitration agreements according to their terms.”
Employers who have already been utilizing class action waivers now have assurance that such waivers are enforceable. For employers who have not yet utilized an arbitration agreement with a class action waiver, we encourage you to consider doing so immediately. Please be advised that such agreements must be both procedurally and substantially conscionable; i.e. they include terms that are understandable and fair to the employee. If you need assistance preparing an arbitration agreement that includes a class action waiver, please contact our office for assistance.
The information provided above is to inform employers about the most significant new developments with regards to class action waivers and does not fully explore all the details. This information is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations. For more information on these issues, please contact an attorney at Sagaser, Watkins & Wieland PC at (559) 421-7000.