U.S. Supreme Court Upholds Arbitration Agreements

On May 21, 2018, the Supreme Court of the United States settled the contentious class action waiver issue that has riled courts for the past six years. In a 5-4 opinion, the Court upheld class action waivers in arbitration agreements. Relying heavily on the text of the Federal Arbitration Act (FAA) and “a congressional command requiring us to enforce, not override, the terms of the arbitration agreements before us,” the Court ruled that the FAA instructs “federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized proceedings.” The Court also reasoned that neither the FAA’s savings clause nor the National Labor Relations Act (NLRA) contravenes this conclusion. Epic Systems Corporation v. Lewis, Supreme Court of the United States, Nos. 16–285, 16–300, 16–307 (May 21, 2018).

This is great news for employers but it is not a panacea.  Employers should focus on paying employees in accordance with the law and allowing breaks, rest periods, leaves of absence, compliance with ADA and worker’s compensation issues.  All State and Federal labor laws remain in play.  This decision only opens the door to require the  use of Arbitration to settle legal disputes (at your expense).  It also reduces the use of class action law suits started by a dispute with an individual.

We will be discussing this with some of our customers in the near future.  An Arbitration Agreement is not for all employers and may actually create costs you are not ready to pay, so we must be careful in the application of this policy.  I am sure we will be hearing more about this judgement in the days and weeks ahead.


AB465 just passed the Senate Labor and Industrial Relations Committee on a 4-1 vote and is on to the Senate Judiciary Committee next.  This bill precludes mandatory employment arbitration agreements, which have already been authorized by the California and US Supreme Courts.

Although this regulation, if passed, could ultimately be overturned by the courts, it will take many years to work it’s way through the system.   Meanwhile, employers and employees will have to pay for lengthy lawyer and court proceedings with no resolution in sight.  The only people making money on this are the lawyers of California and they are, as usual, silent on the issue.

If you have or are thinking of adding a arbitration agreement to your employment package, you may want to reconsider and instead impose good payroll, time recording and proper training as a low cost alternative to this expensive process.  If you have the correct tools in place, the chances of trouble diminishes considerably.  Your loss prevention specialist from HR Mobile Services, Inc. can help you stay in compliance.

IN ALL CASES, if you are a full service customer of ours, and OSHA shows up on your property, ask them to wait off the property for one hour and call our office immediately so we can get out there and represent you.