Supreme Court Upheld Employment Agreements That Force Individuals to Arbitrate Wage & Hour Claims

Recently, in Epic Systems v.Lewis, the Supreme Court upheld employment agreements that force individuals to arbitrate wage and hour claims.

Employment contracts requiring individual arbitration proceedings for the resolution of employee disputes are common and often mandated by employers. This decision reduces the opportunity for employees to proceed as a group in class actions on wage claims and, thus, may reduce enforcement of employees’ disputes, as individual employee claims may not be strong or valuable enough to warrant the expense of a separate arbitration proceeding. The dissent written by Justice Ruth Bader Ginsburg expressed the view that this decision may result in an “under-enforcement of federal and state statutes designed to advance the well-being of vulnerable workers.”

Both sides of the aisle have, in our opinion, overreacted somewhat to this decision and its implications going forward. It may prove to be part of a continuing trend, however, and we are closely following such rulings. We encourage you to take a few minutes to read through the article for a more thorough analysis of the Court’s decision.