Epic Wins Labor Dispute in Closely Divided Supreme Court Decision

May 21, 2018
Epic Systems Corporation won a major labor-law ruling in the Supreme Court on Monday, centering around the extent of corporations’ right to force employees to sign arbitration agreements, and with a 5-4 ruling in its favor

The Verona, Wisconsin-based Epic Systems Corporation prevailed on Monday in a major labor-law ruling in the United States Supreme Court. As Katelyn Ferral wrote in The Capital Times, the main daily newspaper in Madison, Wisconsin (Epic’s headquarters are located in a suburb of Madison) wrote, “The U.S. Supreme Court on Monday affirmed that corporations have the right to force employees to sign agreements barring them from settling workplace disputes in court, both individually and in groups. The case, at which Verona’s Epic Systems is one of several companies at the center, was decided by 5-4 with Justice Neil Gorsuch authoring the majority opinion. Justices John Roberts, Anthony Kennedy, Samuel Alito and Clarence Thomas concurred.”

The Capital Times article quoted Justice Gorsuch as stating in the majority’s ruling that “The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written.” Meanwhile, The Cap Times noted, “Justice Ruth Bader Ginsburg authored the dissenting opinion and delivered it from the bench, calling the majority opinion ‘egregiously wrong.’ She was joined by Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan.” Justice Ginsburg wrote that “The inevitable result of today’s decision will be the underenforcement of federal and state statutes designed to advance the well-being of vulnerable workers.”

Further, The Capital Times article noted, “The majority opinion drew strong rebukes from labor leaders who said it rolls back workers' rights, significantly limiting workers' recourse in workplace disputes and fortifies the power of corporations over their employees. In addition, they said the ruling is an affirmation for thousands of companies that require employees to sign agreements that force them to settle disputes outside of court.”

Meanwhile, Adam Liptak wrote in The New York Times that “Brian T. Fitzpatrick, a law professor at Vanderbilt University who studies arbitrations and class actions, said the ruling was unsurprising in light of earlier Supreme Court decisions. Justice Gorsuch, he added, ‘appears to have put his cards on the table as firmly in favor of allowing class actions to be stamped out through arbitration agreements.’ As a result, Professor Fitzpatrick said ‘it is only a matter of time until the most powerful device to hold corporations accountable for their misdeeds is lost altogether.’ But Gregory F. Jacob, a lawyer with O’Melveny & Myers in Washington, said the decision would have a limited impact, as many employers already use the contested arbitration clauses. ‘This decision thus will not see a huge increase in the use of such provisions,’ he said, ‘but it does protect employers’ settled expectations and avoids placing our nation’s job providers under the threat of additional burdensome litigation drain.’”

Liptak wrote that “The case was the court’s latest attempt to determine how far companies can go in insisting that disputes be resolved in individual arbitrations rather than in court. The Supreme Court ruled in earlier cases that companies doing business with consumers may require arbitration and forbid class actions in their contracts, which are often of the take-it-or-leave-it variety. The question for the justices in the new cases is whether the same principles apply to employment contracts. In both settings, the challenged contracts require that disputes be raised through the informal mechanism of arbitration rather than in court and that claims be brought one by one. That makes it hard to pursue minor claims that affect many people, whether in class actions or in mass arbitrations.”

As The Capital Times article noted, “The case deals with the wage complaint of Jacob Lewis, a former Epic technical writer. Lewis sued the company in federal court arguing Epic had violated federal and Wisconsin laws by unlawfully depriving him and other technical writers of overtime pay. Lewis sued Epic after he, along with other writers, was forced to sign such an agreement which would bar him from taking any complaints over his pay or hours to court. Instead, the agreement mandated that Lewis and other employees settle disputes individually, in internal hearings with the company. The case was brought before the court with cases from two other corporations that dealt with the same legal issue: National Labor Relations Board v. Murphy Oil USA and Ernst & Young LLP v. Morris.”