Last month on May 21, 2018, in a 5-4 decision, the United States Supreme Court issued a landmark decision in the case of Epic Systems Corp. v. Lewis in favor of the defendant. This case will have a far-reaching effect for many employers, workers and HR professionals regarding overtime pay and class action lawsuits brought against employers by workers.
According to an article appearing on the Workforce.com website, Richard Reice wrote that the case which actually covered three separate yet similar cases. The three cases involve Epic Systems, Ernst and Young, and Murphy Oil. For each of the defendants in the cases, the plaintiffs were made of a misclassified group of employees that were exempt from overtime pay.
What the Supreme Court ruling does is potentially apply the Federal Arbitration Act of 1925 to employer/worker contracts in a way that would make it more difficult for the worker to challenge fair wages, the number of hours work and overtime, status and working conditions, regardless of whether those workers belong to a union. Potentially, this latest ruling could affect millions of workers in all areas of the workforce.
Arbitration is less expensive than lawsuits and by going this route could potentially affect how all employment litigations are handled in the future. This ruling would disallow collective or class action lawsuits against employers and would require all workers to submit work-related disputes to arbitration if a company were to insist on such a clause being a condition of employment.
Up until last year, the federal government opposed such clauses being included in employment contracts. However, according to an article which appeared in the Atlantic, since Donald Trump took office the use of such clauses has dramatically increased.
The ruling also means that if an employee has to sign an arbitration clause before employment or as a condition of continued employment, if a worker should ever have a dispute with their employer, the decision of the arbitrator is legally binding and cannot be appealed.