Supreme Court Holds Class Action Waivers in Arbitration Agreements Are Enforceable

In Epic Systems Corp. v. Lewis the United States Supreme Court reviewed three circuit court cases involving employer-employee arbitration agreements.[1] In each case, the main issue was whether employees and employers should be allowed to agree that any dispute between them will be resolved through arbitration, or whether employees should be permitted to bring class actions no matter what they agreed to with their employers.

The Court held that the law was clear, and the Federal Arbitration Act required courts to enforce arbitration agreements – including the terms of an agreement that provides for individualized arbitration proceeding. The Epic Systems holding expands the scope of terms parties may include in arbitration agreements, and confirms that these agreements will be enforced according to their terms.

Mortgage Bankers can expect to see the decision in Epic Systems significantly affect wage and hour class actions filed by loan officers and underwriters. Wise employers should contact their counsel to ensure employment arbitration agreements are properly drafted to limit their exposure and subject class action claims to dismissal.

[1] Lewis v. Epic Sys. Corp., 823 F.3d 1147, 1151 (7th Cir. 2016), cert. granted, 137 S. Ct. 809, 196 L. Ed. 2d 595 (2017) and rev’d, 138 S. Ct. 1612 (2018); Morris v. Ernst & Young, LLP, 834 F.3d 975, 979 (9th Cir. 2016), cert. granted, 137 S. Ct. 809, 196 L. Ed. 2d 595 (2017) and rev’d sub nom. Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018); Murphy Oil USA, Inc. v. N.L.R.B., 808 F.3d 1013, 1015 (5th Cir. 2015), aff’d sub nom. Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018).