The U.S. Supreme Court issued a long-awaited decision in Epic Systems Corp. v. Lewis on May 21, 2018, holding that class action waivers in arbitration provisions are enforceable under the Federal Arbitration Act. The court rejected the National Labor Relations Board's position that class action waivers violate federal labor laws. Before the Supreme Court released its opinion, a circuit split had prevailed, with the U.S. Courts of Appeal for the Seventh, Ninth and Sixth Circuits ruling that mandatory class-waiver arbitration provisions were not enforceable, and the Fifth, Second and Eighth Circuits finding that such provisions were enforceable.
In light of the ruling, if an employer has a dispute resolution provision in their agreements with employees requiring individualized arbitrations to resolve employment disputes, the courts must enforce the provisions and send each employee's dispute to be arbitrated individually, instead of to be litigated as a class or collective action in federal court. The court also held that employers can require at-will employees to sign mandatory arbitration agreements with class action waivers as a condition of continued employment. Employers that do not currently have arbitration agreements prohibiting class treatment of employee claims should consider including them in future agreements.