The Impact of Epic Systems in the Labor and Employment Context

Abstract

In Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), the Supreme Court ruled that an employer did not violate the National Labor Relations Act (NLRA) when it required employees to agree to arbitrate all claims against the employer and also waive their rights to bring a class or collective action against the employer. The Court reasoned that class or collective actions were not the type of “concerted activities for the purpose of collective bargaining or other mutual aid or protection” that Section 7 of the NLRA protects. This comment, part of a three-part discussion on the impact of Epic Systems, discusses the impact of the decision on federal labor and employment policy. The Epic Systems case, like many of the Supreme Court’s recent arbitration decisions, highlights the sometimes dissonant interplay between two previously separate bodies of law that have converged in the last 27 years: 1) the legal doctrine developed under the Federal Arbitration Act (FAA), which Congress passed in 1925 to allow for federal court enforcement of arbitration agreements; and 2) legal doctrines arising from federal labor, employment discrimination, and worker protection laws that include the National Labor Relations Act (NLRA), the Labor Management Relations Act (LMRA), Title VII of the Civil Rights Act of 1964, and the Fair Labor Standards Act.

The comment concludes that the most immediate and direct impact of the Epic Systems ruling falls largely on non-unionized non-transportation workers who have been required to waive their right to bring a class or collective action against their employers. It is now clear that those workers cannot rely on NLRA § 7 to void their waivers. The ruling also narrowed the breadth of the rights protected by the NLRA. In addition, because it is based on the FAA, Epic Systems carries forward the differing treatment of transportation workers and all other workers under the FAA that the Supreme Court announced in the Circuit City case. Since Circuit City established that contracts of employment of transportation workers were exempt from the FAA, Epic Systems and all the other Supreme Court decisions concerning the enforceability of arbitration agreements and class action waivers under the FAA do not apply to them. However, all other workers are subject to the FAA jurisprudence that allows for enforcement of almost any agreement having to do with arbitration. This is not consistent with federal labor and employment policy embodied in anti-discrimination, worker protection, and collective bargaining laws, which do not treat transportation workers differently from non-transportation workers. The Epic Systems case only heightens that inconsistency.