Epic Systems Corp. v. Lewis: U.S. Supreme Court Holds That Class-Action Waivers in Employment Arbitration Agreements Are Enforceable Under Federal Law.

Sullivan & Cromwell LLP - May 23, 2018

In the consolidated cases of Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA, Inc., the U.S. Supreme Court held on Monday that arbitration agreements in which an employee agrees to arbitrate any claims against an employer on an individual—rather than on a class or collective—basis, are enforceable and do not violate the National Labor Relations Act (“NLRA”). In reaching its decision, the Court held that Congress, through the Federal Arbitration Act, “has instructed federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized proceedings,” and that nothing in the NLRA overcame this principle. The decision resolves a conflict in the courts of appeals and provides clarity to employers that have entered into arbitration agreements with employees that contain class- or collective-action waivers. The decision may lead to more employers considering the use of such agreements.