Benefits Counselor June 2018

General Employee Benefits

U.S. Supreme Court Upholds Arbitration Agreements Barring Employee Class-Action Suits

On May 21, 2018, in three consolidated cases, the U.S. Supreme Court held that employers can enforce class action waivers in employee agreements. Epic Systems Corp. v. Lewis; Ernst & Young v. Morris; NLRB v. Murphy Oil USA. In each of the cases, the employer and employees had entered into employment contracts mandating individualized arbitration to resolve employment disputes. Nonetheless, the employees brought wage-and-hour claims under the Fair Labor Standards Act and related state law through class or collective actions in federal court. The Supreme Court ruled against the employees, concluding the Federal Arbitration Act ("FAA") requires that arbitration agreements be enforced by their terms, and neither the FAA's "savings clause" nor the National Labor Relations Act guaranteed workers' rights to class action lawsuits.