The Supreme Court also expressly rejected the argument that prohibiting class action participation violates the right created by the National Labor Relations Act to engage in collective and/or concerted activity. The Supreme Court concluded that the right to engage in collective activity under the National Labor Relations Act is limited to organizing or unionizing activity rather than litigation of employee disputes.
The Supreme Court then held that enforceable arbitration provisions may exclude participation in class actions, whether in court or as a collective arbitration. The Court reasoned that the procedures necessary for a class action are inherently inconsistent with the fundamental attributes of arbitration. The Court identified some of the defining attributes of “bilateral” arbitration as including stream-lined procedures, efficiency, procedures tailored to specific disputes, confidentiality, etc. Lewis, decided May 21, 2018, that federal law and policy strongly favor arbitration as an alternative dispute resolution procedure. The Federal Arbitration Act, in particular, provides that arbitration provisions in contracts should be enforced, according to their terms, just as any other contract provision would be enforced. Agreements to arbitrate, according to Section Two of the Act, are “valid, irrevocable, and enforceable, save upon such terms as exist at law or in equity for the revocation of any contract.” Under this standard, the only recognized exceptions to enforcement have involved arbitration provisions procured by impermissible means, such as fraud, duress, unconscionability, etc. The Supreme Court recognized as a starting point in Epic Systems Corp.
The United States Supreme Court has just resolved an important dispute among lower federal courts involving mandatory arbitration provisions in employment contracts. In a case involving Epic Systems Corp., the Court (in a 5 – 4 decision with a vehement dissenting opinion) held that contract provisions that require employees to resolve employment disputes individually or through one-on-one arbitration (as opposed to class action lawsuits) are enforceable. Lower federal courts had reached inconsistent decisions on this issue, including the Seventh Circuit Court of Appeals, which previously held such arbitration provisions to be unenforceable. The Seventh Circuit is significant because appeals from Wisconsin federal trial courts are decided there. Supreme Court Approves Arbitration Agreements that Preclude Participation In Class Action Lawsuits Richard L.
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