U.S. Supreme Court Upholds Class Action Waivers in Arbitration Agreements

The high financial cost of defending class action employment lawsuits causes many employers to settle the claims, even meritless.  In a recent decision, the U.S. Supreme Court upheld employers’ right to avoid costly lawsuits through arbitration agreements that require individualized arbitration of employment disputes.

In Epic Systems Corp. v. Lewis, 2018 WL 2292444 (S. Ct. May 21, 2018), the Court reviewed three lower court cases involving employees who had agreed to bring wage and other employment claims only through individualized arbitration.  The Court held that arbitration agreements waiving collective action and class action procedures in employment cases are enforceable under the Federal Arbitration Act.

Employers must still use caution when drafting an arbitration agreement with a class action waiver.  Washington courts will still look carefully and invalidate an arbitration agreement that is unfair, such as an agreement that unreasonably limits the amount of time for an employee to assert a claim or shifts the cost of arbitration to the employee.

If you have any questions about how this new Supreme Court decision or any other employment law affects you or your business, please contact Kevin Hansen at Livengood Alskog, PLLC.

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