In Epic Systems v. Lewis, 138 S.Ct. 1612, 1624 (2018), the Supreme Court held that, absent “a clear and manifest congressional command to displace” the Federal Arbitration Act’s (FAA) requirement that arbitration agreements be enforced as written, class action waivers in employment agreements are generally enforceable. One effect of the ruling is to spur possible legislative change, as evidenced by proposed legislation in California and the House of Representatives’ passage, on Sept. 20, 2019, of the so-called Forced Arbitration Injustice Repeal (FAIR) Act), H.R. 1423, which would render unenforceable pre-dispute arbitration agreements for employment and consumer disputes. State laws are likely to fall on the shoals of FAA preemption; the House bill has no chance of becoming law until a change in the composition of the Senate occurs. Another effect has been the attempt by employee representatives, now presumably closed from a class or collective action, to metastasize their case into a welter of individual arbitrations in the hope that employers will see the wisdom of a class-wide resolution.
The proliferation of single employment claims poses a serious challenge for employment arbitration. Strong case management by the arbitrator is critical. Borrowing a leaf from the experience of courts handling mass tort claims, the arbitrator should convene an early conference where counsel for claimants would inform the arbitrator and counsel for employers of the number and range of cases filed involving the same employer and the same general factual setting. Counsel for both sides would then explore with the arbitrator the possibility of using a “test case” or series of test cases that would act as exemplars of the issues likely to arise in all of the cases. The results in these cases, which would be tried first, would be used to help the parties and the arbitrator narrow the relevant issues and evaluate probability of outcomes. In some situations, it would be appropriate to allow one-way intervention by claimants outside of the test cases, as occurred, for example, in Katz v. Carte Blanche, 496 F.2d 747 (3d Cir. 1974) (en banc)—preclusion to spare employees from having to separately relitigate against their employer an issue that has already been resolved in favor of other employees of the same employer in previous arbitrations.
