Supreme Court Rules to Strengthen Arbitration Clauses


The Supreme Court votes in favor of employers in the case of Epic Systems Corp. v. Lewis. This 5-4 decision now allows employment contracts to prohibit employees from collectively arbitrating. Instead of multiple employees getting together and forming one class action, employees could be forced to arbitrate them separately and individually. Many believe that this could potentially deter employees from coming forward and ultimately make employers less accountable for their actions.

Arbitration agreements are contracts signed between employers and employees that bar the employees from taking their grievances to court. Alternatively they take the dispute to arbitration in which they bring in a neutral third party, the third party weighs all the evidence, then makes a binding legal decision. Arbitration can often settle disputes much faster and cheaper than going to court.

However, one of the major problems with arbitration is it lacks the same judicial oversight of the courts. Also employees are also silenced by non-disclosure agreements. Employees may feel powerless if they feel that their issue is only an isolated incident and would be less likely to come forward. A class action may prevent some of these issues by having employees with related issues working collectively.

The Epic Systems Corp. v. Lewis decision is viewed as very employer friendly. The effects of Donald Trump's appointment of Neil Gorsuch is starting to be felt. It would have been very likely that Obama's nominee, Merrick Garland, would have voted differently. This would have been the swing vote that could have reversed the decision.


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