The Supreme Court settled a disputed question regarding arbitration clauses as they apply to class and collective actions in Epic Systems v. Lewis, 584 U.S. ___, (2018). The matter before the court included three disputes that raised the same issue, but the court focused on the facts of Ernst & Young v. Morris, a collective action under the Fair Labor Standards Act (FLSA), in its opinion. Justice Neil Gorsuch’s opinion for the 5-4 majority professes to focus only on the law, and the opinion chides Justice Ruth Bader Ginsberg, writing for the minority, for a focus on policy over precedent. However, both the majority and dissenting opinions reflect a policy dispute: the preference in the law to enforce arbitration clauses versus the historic view of certain employment-related statutes as remedial in nature. One need only reflect that this court, in Encino Motorcars v. Navarro, rejected the notion that remedial statutes such as the FLSA are subject to any special treatment to know where the court would land on this particular policy dispute. The court’s holding that arbitration clauses in employment agreements are enforceable even if they result in a waiver of the right to bring a class or collective action is a blow to employee’s rights under the FLSA. The case also provides a drafting lesson for practitioners.

Morris was an employee of Ernst & Young, and entered into an employment agreement that included an arbitration provision. The arbitration provision stated that it applied to any disputes that might arise between employer and employee; that the arbitrator, chosen by the employee, could grant any relief that could be granted by a court; and that disputes pertaining to different employees would be heard in separate arbitration proceedings.