Tuesday, May 22, 2018

SCOTUS Rules for Employee Arbitration Class Action Waivers

The Supreme Court has resolved a conflict amongst the U.S. Federal Circuit Courts, and once again the Ninth Circuit has been overruled. This time it was for SCOTUS to confirm that class action waivers in employee arbitration agreements are enforceable (if properly drafted). The Supreme Court had previously ruled these as enforceable in consumer arbitration agreements in 2011.

Despite the favorable ruling for employers that was opposed by the Obama Administration and supported by the Trump Administration, California employers need to ensure their arbitration clauses are carefully drafted and be aware of the trade-offs in selecting arbitration over litigation in the first place.

The cases are Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP et al. v. Morris et al., No. 16-300; and National Labor Relations Board v. Murphy Oil USA, Inc., et al., No. 16-307 (May 21, 2018).