SCOTUS Upholds Employer Arbitration Requirement

This month, in a 5-4 decision, the U.S. Supreme Court ruled that an employer can lawfully require employees to arbitrate as a condition of employment any related disputes on an individual basis and to waive their right to participate in a class action suit or class arbitration. The case involved an effort by workers to file a class action suit against an employer for violating the federal minimum wage law. The employer sought to dismiss the case because it insisted as a condition of employment that the employees waive their ability to go to court or be part of any class action. Rather, any dispute had to be resolved out of court in a private arbitration. The case, Epic Systems v. Lewis, arose from the U.S. Court of Appeals for the Seventh Circuit. Companion cases, Ernst & Young v. Morris, from the Ninth Circuit and National Labor Relations Board v. Murphy Oil, from the Fifth Circuit were argued as a trio before the Supreme Court which decided they differed only in detail, not substance. The Federal Arbitration Act (FAA) requires courts to enforce arbitration agreements between employers and employees according to their terms, even when the agreements provide only for arbitration through “individualized proceedings” rather than a class. In this holding, the Court refused to read the National Labor Relations Act (NLRA) to prohibit arbitration agreements requiring individualized arbitration as an impermissible restriction on employee rights under the NLRA to “engage in … concerted activities for the purpose of … mutual aid or protection,” 29 U.S.C. § 157, holding that Section 7 of the act “focuses on the right to organize unions and bargain collectively” and “does not even hint at a wish to displace" the FAA. The Court stated the FAA and the NLRA have long coexisted (since 1925 and 1935 respectively) and found the suggestion they might conflict something quite new. The Court reasoned that the employees’ theory ran “afoul of the usual rule that Congress does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions..." See more in article here-- https://bit.ly/2Jk3e04 and read full opinion here-- https://bit.ly/2rWzAE8