Epic Decision from the Supreme Court: the Supreme Court Rules Employee Class Action Waivers Are Enforceable [May 31, 2018] [open pdf - 570KB]
"Can agreements between employers and employees to arbitrate their disputes in lieu of class action lawsuits and other collective actions be enforced in court? In Epic Systems Corp. v. Lewis, decided on May 21, 2018, the Supreme Court answered in the affirmative, holding that the Federal Arbitration Act of 1925 (FAA) generally requires the enforcement of arbitration agreements between employers and employees, even when such agreements preclude actions brought collectively by employees against their employer. Epic Systems, although focused on employment contracts, implicates a broader debate about the efficacy of arbitration agreements, particularly in the class action context. The case is the latest in a series of 5-4 decisions from the Court applying the FAA to enforce the application of a bilateral arbitration clause waiving class or collective proceedings. Each of these cases turned on the Court's view that arbitration is fundamentally an informal, bilateral procedure, and that the FAA is generally not displaced by other federal statutes without explicit statutory language to the contrary. In this vein, Epic Systems has potentially important implications for Congress across many of the fields in which Congress legislates. As discussed in more detail below, the case's broad view of the FAA's reach, the Court's interpretation of how the 1925 statute interacts with other federal statutes, and the case's implications for how arbitration agreements can be used to limit the availability of collective legal action all underscore the significance of arbitration agreements that preclude litigation (including class litigation) in a court of law."
CRS Legal Sidebar, LSB10142
Federation of American Scientists: http://www.fas.org/sgp/crs/index.html