Seventh Circuit Finds Class Action Waiver Unenforceable, Creates Split Among Circuits

The Seventh Circuit Court of Appeals recently dealt a blow to employers when it held in Jacob Lewis v. Epic Systems Corporation that arbitration agreements that prohibit employees from seeking class, collective or representative remedies to wage-and-hour disputes are unenforceable.

The suit involved a privately held health care software company that required all employees to consent to an arbitration agreement as a condition of continued employment. The agreement mandated that any wage-and-hour disputes could be brought only through individual arbitration and that employees waived the right to participate in any class, representative or collective proceedings.

BACKGROUND

Plaintiff Jacob Lewis opted to sue Epic in federal court despite having endorsed the arbitration clause. When Epic moved to dismiss the case, pursuant to the arbitration agreement, Lewis argued that the provision was unenforceable under the National Labor Relations Act (NLRA). The district court