Supreme Court Holds Class and Collective Action Waivers are Enforceable
On May 21, 2018, the Supreme Court issued its long-awaited decision addressing the enforceability of class or collective action waivers in employment arbitration agreements.
In Epic Systems Corp. v. Lewis, a 5-4 decision authored by Justice Neil Gorsuch, the Court confronted a major dispute in labor and employment law. The Court resolved a circuit split through the review of three cases concerning mandatory individualized arbitration proceedings to resolve employment disputes. The Court held these class and collective action waivers to be enforceable in arbitration agreements.
Previously, it had been argued and held in two circuits that class and collective action waivers violated the National Labor Relations Act. These circuits argued that the waivers violated Section 7 of the Act, which guarantees workers' rights to bargain collectively and to engage in other concerted activities for the purpose of mutual aid or protection.
In deciding Epic Systems, the Supreme Court clarifies that class and collective action waivers do not violate the National Labor Relations Act. The Court highlights the fact that the Act speaks to the rights of employees to exercise their free association in the workplace, not of their rights to class litigation in the courtroom.
This decision will likely have far-reaching impacts outside the arena of traditional labor law. One currently significant implication of this decision is its effect on the "Me Too" movement. This decision makes it clear that employees with mandatory arbitration agreements seeking to litigate claims of sexual harassment in the workplace will have to do so individually.
As may be apparent, this decision is widely considered a win for employers, as it is likely that this will lead to a reduction in costly and time-consuming litigation, particularly in regards to wage and hour disputes.
Employers are advised to take advantage of the ability to avoid class action liability as soon as possible by implementing appropriate waivers with respect to all new hires and current employees.
Mark C. Knoth has over 20 years of experience representing employers in a wide range of employment and labor law matters. Mark chairs the firm’s Labor, Employment, Employee Benefits & ERISA Practice Group.
On a daily basis, Mark counsels and advises business owners, managers and human resources professionals on workplace issues including civil rights and anti-discrimination laws; employee discipline; wage and hour; overtime; employee leaves; reasonable accommodations; veterans issues; picketing; secondary boycotts; reductions in force; drug testing; unemployment compensation; affirmative action; and union organizing campaigns, among other matters. He additionally drafts employee policies, handbooks, contracts, and covenants not to compete, and investigates threats of violence, allegations of harassment, and other employee misconduct.
Mark has successfully represented employers in hearings, trials, and appeals in federal and state courts on a variety of employment law claims including, race, sex and national origin cases alleging discrimination, retaliation and harassment under Title VII; disability and failure to accommodate claims under the ADA; age discrimination claims under the ADEA; retaliation and failure to reinstate claims under the FMLA; claims alleging failure to pay wages and overtime under the FLSA; employee benefit claims under ERISA; breach of covenants not to compete claims; wrongful termination claims and numerous other State and Federal claims. A number of cases Mark has successfully handled have become published cases. Mark represents employers in investigations conducted by the Equal Employment Opportunity Commission (EEOC), the Michigan Department of Civil Rights, the Michigan and US Departments of Labor, and the Office of Federal Contract Compliance Programs. As a special mediator for the EEOC, Mark facilitates the resolution of charges of discrimination brought against employers.
Mark’s broad range of experience also includes traditional labor relations matters such as negotiating collective bargaining agreements, trying discharge and contract interpretation grievances in labor arbitration and he appears before the National Labor Relations Board (NLRB) and the Michigan Employment Relations Commission at unit clarification hearings and union certification elections, and unfair labor practice proceedings
Mark frequently speaks to employer groups, and trains human resources managers on a variety of employment related legal topics. He also writes on subjects related to his practice and is a contributing editor to a nationally recognized publication. Mark is conversational in German.
Mark was named to The Best Lawyers in America®, by Woodward/White, Inc. in the area of management side employment law. He also has been awarded and maintains the Martindale-Hubbell AV rating, reflecting preeminence in his legal ability and ethical standards. Mark has also received an Excellent rating through Avvo.com. Mark was also selected by dBusiness Magazine as one of Detroit's Top Lawyers in Metro Detroit for Labor and Employment Law for 2015.
Katherine F. Cser focuses her practice on labor and employment issues. She counsels and advises business owners, managers and human resources professionals on workplace issues including discrimination, retaliation, wage and hour laws, medical leave laws, among other concerns.
She has also practiced as a commercial litigator on a wide variety of commercial disputes in federal and state courts and arbitral proceedings. Katherine has experience in commercial transactions litigation, as well as restrictive covenants and intellectual property and related tort claims.
Before joining Kerr Russell, Katherine was an attorney in the New York City office of a national law firm. In 2014 and 2015, she was named to the New York Metro Super Lawyers’ Rising Stars list. In 2016 and 2017, Katherine was named to the Michigan Super Lawyers' Rising Stars list.
- Katherine's article "The Real Estate Industry Must Be Cautious with Social Media" was published by the American Bar Association and can be reviewed here.
- Katherine's article “Proposed Tip-Pooling Regulation: Impact on Restaurateurs” was published by the American Bar Association Section of Litigation, Employment and Labor Relations Law and can be viewed here.
- VIDEO (here): Kerr Russell attorneys Kate McCarroll and Katherine Cser discuss the top five issues today in immigration, labor and employment law: Sexual Harrassment, Transgender Employees, Employment Manuals (NLRB's Boeing Decision), Department of Homeland Security Oversight, Immigration Challenges
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