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May 21, 2018 • News

Supreme Court Rules Class Action Waivers Enforceable in Employment Agreements

On May 21, 2018, in a split 5-4 decision, the U.S. Supreme Court held that arbitration agreements providing for individualized proceedings, and waiving the right to participate in class or collective actions, are lawful and enforceable.

In a consolidated review of three cases (Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP v. Morris, No. 16-300; and NLRB v. Murphy Oil USA Inc., No. 16-307), the court rejected the 2012 ruling of the National Labor Relations Board (NLRB) that maintaining individual arbitration agreements containing class waivers violates the National Labor Relations Act (NLRA), which gives employees the right to engage in concerted activities.

The court concluded that nothing in the NLRA “manifested a clear intention to displace” the Federal Arbitration Act (FAA) of 1925 which made arbitration agreements legal.

See the Supreme Court opinion here. see the NLRB press release here.

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