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US Supreme Court: Employers can require workers to accept individual arbitration agreements

On Behalf of | May 21, 2018 | Work agreements and policies

Should employers be allowed to insist that disputes be handled in one-on-one arbitration, or should employees always be permitted to bring their claims in class or collective actions?  This issue was raised in the case titled Epic Systems Corp. v. Lewis (together with other cases which raised the same issue: Ernst & Young LLP et al. v. Morris et al., and National Labor Relations Board v. Murphy Oil USA, Inc. et al.).

The workers’ argument was that such arbitration agreements violate employees’ rights to act in concert and violates the NLRA  (National Labor Relations Act).  The Supreme Court ruled 5 to 4 today that companies may require workers to accept individual arbitration for wage and other workplace disputes rather than banding together in collective actions.  US Supreme Court Justice Gorsuch wrote that as a matter of policy these questions are surely debatable, but as a matter of law, the Federal Arbitration Act requires courts to enforce arbitration agreements according to their terms, including terms providing for individualized proceedings.

Justice Ginsburg objected to the majority’s opinion, stating that requiring employees to arbitrate wage and hour claims only one-on-one, as opposed to in a class action, will result in the violation of many rights because such claims are often too low in value to justify one-on-one litigation.  Such claims will also frequently result in retaliation.

There are still many ways to challenge the enforceability of an arbitration agreement.  This case only addressed a limited argument/challenge to arbitration agreements.

– Eric A. Boyajian, Esq., Law Offices of Eric A. Boyajian, APC.