Today, the U.S. Supreme Court cleared one of the final obstacles to class action waivers in arbitration agreements, casting aside what was likely the last major challenge to the popular provisions. Employers who do not use class action waivers would be well-served to reconsider that decision.
In Epic Systems Corp. v. Lewis, the Supreme Court held that the National Labor Relations Act (NLRA) did not prevent enforcement of arbitration agreements with class action waivers. That specific 5-4 holding was not terribly surprising given the number of 5-4 decisions issued in recent years upholding arbitration agreements, but the opinion signaled a potentially seismic shift in the law under the NLRA.
In 2011, the Supreme Court took the world of employment law by surprise by holding that class action waivers in arbitration agreements were enforceable. Since then, class action lawyers have tried a number of legal challenges to attempt to invalidate their use. This challenge under the NLRA was one of the last remaining.
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