Many employers elect to utilize mandatory arbitration provisions in employment agreements, confidentiality & non-solicitation agreements and onboarding documents.
Generally, arbitration agreements create a contractual agreement and obligation between the employee and employer to arbitrate claims arising out of the employment relationship.
But following the U.S. Supreme Court’s decision in Epic Systems Corporation v. Lewis; Ernst & Young, LLP v. Morris; and NLRB v. Murphy Oil USA, Inc., 138 S.Ct. 1612, in May of 2018, your company’s arbitration agreement likely needs to be updated.
In Epic Systems, the U.S. Supreme Court ruled that class action and collective action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA).
This is a game changer for employers based on the current landscape of employment litigation in U.S. This is particularly true in light of the increased efforts by employees (and plaintiff’s lawyers) to seek class or collective actions in claims arising out of the Fair Labor Standards Act (FLSA).
Since Epic Systems in May of 2018, there have been three 11th Circuit (U.S. Court of Appeals for District Courts in Florida, Georgia and Alabama) opinions further confirming the U.S. Supreme Court’s decision upholding a bar to group-based litigation through arbitration agreements. Everglades Coll., Inc. v. Nat’l Labor Relations Bd., 893 F.3d 1290, 1292 (11th Cir. 2018); Franks v. Nat’l Labor Relations Bd., 742 F. App’x 463, 466 (11th Cir. 2018); Cowabunga, Inc. v. Nat’l Labor Relations Bd., 893 F.3d 1286, 1288 (11th Cir. 2018).
Is your company’s arbitration agreement abreast with the pro-employer decision in Epic Systems?
If not, you need to take action now.
The advice? Review, assess, revise and roll out a revised arbitration agreement—to current and new employees.
For a follow up discussion, or guidance on implementing an arbitration agreement or tweaking your company’s current agreement to better position it for future employment litigation, please feel free to contact me.
DISCLAIMER: The contents of this article are intended for informational purposes only. It is not intended as legal advice and should not be construed as such. Unauthorized use of the information and material contained herein is at the user’s own risk.