U.S. Supreme Court Ruling – Class Action Waiver in Arbitration Agreements

A recent U.S. Supreme court ruling, Epic Systems Corp v. Lewis upheld that class and collective action waivers within an Arbitration Agreement are enforceable under the Federal Arbitration Act. Further the court concluded that such stipulations within an Arbitration Agreement do not violate Section 7 of the National Labor Relations Act.

This decision sets a precedent to allow employers to require employees to sign an arbitration agreement as a condition of employment, and for the employer to enforce the arbitration process for resolution of most employment issues.

Employers should review their existing arbitration agreements to ensure that they contain the correct and adequate language to hold up under scrutiny in the event of a claim or cause of action where the matter can be bound to arbitration by a court of law. It is also important to review your existing arbitration agreement to make sure that the correct language is in place, and outlines that employees are specifically waiving their right to participate in a class action or collection action matter.

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