Originally from Alternatives to the High Cost of Litigation

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A Seventh U.S. Circuit of Appeals decision in late May potentially changes the prospects for the future of employment arbitration practice.

The decision is the first appellate court opinion that eliminates class action waivers in employment agreements that mandate individualized arbitrations for workplace conflict.

The opinion, in Lewis v. Epic Systems, No, 15-2997 (7th Cir May 26) (available at http:// bit.ly/1U8lhTW), is the first circuit court that backs the view of the National Labor Relations Board, which said in 2012 that class waivers are incompatible with U.S. labor law.

That four-year-old NLRB decision was reversed in the Fifth Circuit. It also has met opposition elsewhere, with federal courts using U.S. Supreme Court jurisprudence on consumer arbitrations permitting class waivers to guide their views. See D.R. Horton— 357 NLRB No. 184, 2012 WL 36274 (Jan. 3, 2012) (PDF download link at http://1. usa.gov/1IMkHn8), enforcement denied in relevant part, 737 F.3d 344 (5th Cir. 2013) (Graves, J., dissenting)(PDF download link at http://bit.ly/1XRvjrM), reh’g denied, No. 12-60031 (Apr. 16, 2014).