On May 21, in a win for employers, the U.S. Supreme Court upheld the right of employers to use mandatory arbitration clauses under the Federal Arbitration Act to block the filing of class-action lawsuits over workplace issues. In a 5-4 decision, the majority rejected arguments that forcing those cases into private, individual arbitration violated employees’ rights under the National Labor Relations Act (NLRA).
Justice Gorsuch delivered the opinion in Epic Systems Corp. v. Lewis and was joined by Chief Justice Roberts as well as Justices Kennedy, Thomas and Alito. Justice Ginsburg dissented and was joined by Justices Breyer, Sotomayor and Kagan. The court held that “Congress has instructed in the Arbitration Act that arbitration agreements providing for individualized proceedings must be enforced, and neither the Arbitration Act’s saving clause nor the NLRA suggests otherwise.”
The Court ruled on three consolidated cases that challenged National Labor Relations Board (NLRB) rulings against class action waivers beginning in 2012. The NLRB in a press release stated that dozens of businesses that had previously adopted arbitration agreements would be affected by the Supreme Court’s decision. Many more employers, including some in the construction industry, have been awaiting the outcome of the Supreme Court appeal before implementing similar arbitration agreements.
To learn more about this decision, see an analysis prepared by ABC’s general counsel, Littler Mendelson P.C.
This article is intended for informational purposes only and does not constitute legal advice or opinion.