If your objective is to resolve employment disputes quickly and privately on an individual basis and to avoid expensive, time-consuming class and collective action litigation—as is the case with most employers—then the answer is almost certainly yes based on the U.S. Supreme Court opinion issued this week in Epic Systems Corp. v. Lewis, Ernst & Young v. Morris. Effectively, the decision allows employers to prevent their employees from suing them in collective and class actions by including a clause commonly referred to as a “class action waiver” in their arbitration agreements.

In a 5-4 opinion, the U.S. Supreme Court held that employers may enforce workplace agreements requiring arbitration for all work-related disputes with employees in which the employee has waived the right to pursue claims on behalf of fellow employees collectively or on a class-wide basis. The “class action waiver” holding is likely to affect two types of lawsuits that have been on the rise in the last five to ten years: collective actions brought under the Fair Labor Standards Act for violations of wage and hour laws and disparate impact class actions brought under civil rights laws.

Employers have seen a sharp upsurge in FLSA collective actions from the plaintiffs’ bar in recent years—so much so that plaintiffs’ counsel’s strategy has become cookie cutter. A plaintiff’s attorney typically identifies an employee subject to a wage policy that potentially violates the FLSA and files a collective action which gives other employees subject to the same wage policy the option to join in the lawsuit. The exposure difference between a single-employee suit and a collective suit gives the plaintiff’s attorney significant leverage to extract a settlement from the employer. Because the FLSA allows for recovery of attorneys’ fees, the settlement amounts often far exceed the actual exposure in the case. A properly drafted “class action waiver” can eliminate collective actions brought under the FLSA and allow the employer to resolve the dispute on an individual basis in private arbitration. In an individual, private arbitration, an employer also has the opportunity to address or correct its practices before lawsuits become widespread among other employees.

Employers also have increasingly confronted civil rights class actions arising from employment policies or practices that inadvertently have an adverse impact on employees according to their race, sex, ethnicity, or national origin. A properly drafted “class action waiver” also could eliminate class action suits brought in these types of class actions. Like in wage and hour disputes, an individual, private arbitration gives an employer an opportunity to address disparate impact issues before they become a publicized, widespread concern among employees and customers.

All that said, the Supreme Court’s green light on “class action waivers” should come with a word of caution to in-house counsel and human resource departments. The Court’s opinion still leaves open the possibility of attacking the validity of arbitration agreements—albeit under state contract principles, e.g. fraud, duress, and, unconscionability. Some states, like California, are particularly hostile to arbitration agreements, and drafting them requires certain techniques, such as opt-out clauses or state-by-state carve outs, that increase the chances of the agreement withstanding court scrutiny. State law and local counsel where the employer operates should be consulted on these issues to ensure that amended or new arbitration agreements are enforceable and consistent with the states’ public policies for employment agreements.