Jenner & Block

Client Alert: The Supreme Court Reaffirms The Reach And Force Of The Federal Arbitration Act, This Time In Employment Cases

On May 21, 2018, the Supreme Court issued its long-awaited decision in the consolidated cases Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP v. Morris, No. 16-300; and NLRB v. Murphy Oil USA, No. 16-307.  In a 5-4 opinion by Justice Gorsuch, the Court held that courts must enforce arbitration agreements requiring employees to bring employment-related claims in individualized arbitration proceedings, and barring them from pursuing those claims as a collective or class action.[1]  The Court explained that absent a contrary congressional directive, arbitration clauses are “valid, irrevocable, and enforceable” under the Federal Arbitration Act (FAA), which reflects “‘a liberal federal policy favoring arbitration agreements.’”[2]  The Court held that such arbitration agreements do not violate employees’ statutory right under the National Labor Relations Act (NLRA) to “engage in other concerted activities for the purpose of … mutual aid or protection.”[3]  It concluded that the National Labor Relations Board (NLRB)’s contrary conclusion was not entitled to Chevron deference.[4] Therefore, the Court held that the provisions requiring individual arbitration of employment disputes were enforceable under the FAA.

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