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Epic Systems Corp. v. Lewis

Supreme Court of the United States · 2018 · Civil Procedure

Civil ProcedureArbitrationClass actionsStatutory interpretationFederal Arbitration ActFAAsaving clauseNLRA

Facts

In each case, an employer and employee entered into an agreement requiring arbitration of employment disputes on an individualized basis rather than through class or collective proceedings. Despite those agreements, the employees filed wage-and-hour claims in federal court under the Fair Labor Standards Act and related state law, seeking class or collective treatment. The employers moved to compel arbitration according to the contracts. The employees argued that the FAA's saving clause and the NLRA made the individualized-arbitration provisions unlawful and unenforceable.

Issue

Whether the Federal Arbitration Act requires enforcement of employment agreements calling for individualized arbitration, or whether the FAA's saving clause or the National Labor Relations Act makes such agreements unlawful because they bar class or collective proceedings.

Rule

The FAA requires courts to enforce arbitration agreements according to their terms, including terms requiring individualized proceedings. The FAA's saving clause preserves only generally applicable contract defenses and does not permit defenses that target arbitration or interfere with its fundamental attributes. A different federal statute will displace the FAA only if Congress clearly and manifestly says so, and the NLRA contains no such command regarding class or collective procedures.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Riverton Clinical Services, a fictional healthcare staffing company in Phoenix, requires employees to sign agreements providing that any wage dispute must be resolved in one-on-one arbitration. Talia Moreno later files a federal overtime suit in Arizona seeking to proceed on behalf of herself and hundreds of coworkers as a collective action.

If Riverton moves to compel arbitration on an individualized basis, how should the court rule?

Explanation. The majority held that the FAA directs courts to enforce arbitration agreements as written, including provisions requiring individualized arbitration. An objection based solely on the absence of class or collective procedures attacks a fundamental attribute of arbitration and does not defeat enforcement. (Derived from Epic Systems Corp. v. Lewis (n.d.).)