The employment attorneys at Nardone Limited regularly assist our clients with labor and employment issues, such as Department of Labor compliance, as well as guidance on preventing and responding to discrimination and harassment charges filed with the Equal Employment Opportunity Commission (“EEOC”) and the Ohio Civil Rights Commission (“OCRC”). Our employment attorneys also regularly update clients on news, events, and changes in law as it relates to labor and employment issues that may impact our clients.

Introduction

     One issue that Nardone Limited’s employment law attorneys have closely followed is whether courts will enforce employment contract provisions that make individual arbitration mandatory for employee disputes and ban class actions. Ultimately, this issue, which effects employment dispute rights across the country, made its way to the United States Supreme Court in Epic Systems v. Lewis and two companion cases that the Supreme Court accepted for review. Nardone Limited previously provided a detailed analysis regarding this group of cases and the circuit split that led to the Supreme Court’s acceptance of Epic Systems in a prior blog post. And now, after months of anticipation, the Supreme Court has issued a ruling in Epic Systems on Monday, May 21, 2018, entering a landmark pro-employer ruling that will likely shape the future of employment litigation for decades to come.

Supreme Court Ruling

     This post serves to provide an update to advise of the Court’s landmark ruling in Epic Systems regarding Epic Systems and its companion cases consolidation for appeal, National Labor Relations Board v. Murphy Oil, USA, Inc. and Ernst & Young LLP v. Morris. To put it simply, the Court ruled that employers can require their employees to bring all employment disputes in individual arbitration without violating Section 7 of the National Labor Relations Act, which grants employees the right to collectively engage in ‘concerted activity’ to improve working conditions.

     In the majority opinion authored by Justice Neil Gorsuch, the Supreme Court held that the Federal Arbitration Act prevented the National Labor Relations Board’s (“NLRB”) effort to use Section 7 of the National Labor Relations Act to suddenly invalidate arbitration agreements that require one-on-one arbitration. Epic Systems’ holding naturally follows from the Supreme Court’s prior precedents interpreting the Federal Arbitration Act. And, the Court acknowledged this in Epic Systems, by recognizing that the Federal Arbitration Act protects agreements to arbitrate under individual rather than class action or collective procedures to an almost absolute degree.

     In addition, the Epic Systems court correctly held that none of the delineated exceptions applied to the Federal Arbitration Act’s rule requiring strict enforcement of the terms of arbitration agreements. Further, the Court made clear that any argument that a contract is unenforceable simply because it requires bilateral arbitration would improperly disfavor arbitration and, thus, violate the Federal Arbitration Act.

     Moreover, the Court considered and rejected the argument that the National Labor Relations Act displaces the Federal Arbitration Act’s straightforward rules that require enforcement of arbitration agreements based on their plain terms. As Justice Gorsuch stated in the Epic Systems opinion:

“[National Labor Relations Act] does not even hint at a wish to displace the Arbitration Act.”

     Rather, Justice Gorsuch explained that Section 7 focuses on employees’ right to form unions and collectively bargain—not any type of fundamental right to bring class action litigation or class arbitrations.

Takeaways for Employers

     Despite likely seeing numerous headlines stating that Epic Systems is a huge victory for employers, many will be left asking “what does this ruling actually mean to my business for practical purposes?” First and foremost, the Court’s ruling in Epic Systems means that gradually, and increasingly, far fewer employment class actions will be brought, because many will be contractually barred. But, companies will need to review their employment contracts with counsel and modify those contracts to ensure your company is taking advantage of the tremendous decrease in liability exposure offered by the Epic Systems ruling.

Contact Nardone Limited

     The Nardone Limited employment attorneys handle a full spectrum of employment law issues, including business disputes and litigation, drafting of employment and restrictive covenants, and consultation on all types of employment law issues. If your business needs advice or representation on an employment dispute before the EEOC, the OCRC, or regarding potential employment litigation, contact one of our employment attorneys. Further, feel free to contact Nardone Limited if you would like more information or consultation regarding any employment law issue.