Submitted by Ali Law Group PC on
The U.S. Court of Appeals for the Seventh Circuit’s recent decision in Lewis v. Epic Systems Corporation turns up the pressure on the U.S. Supreme Court to address the issue of the enforceability of class action waivers in mandatory arbitration agreements. The court in Lewis ruled that the arbitration clause barring class action lawsuits violated the National Labor Relations Act by preventing employees from engaging in a collective action and forcing them to battle the employer individually in arbitration, outside of court.
In its decision, the circuit court determined that the Federal Arbitration Act did not protect the arbitration clause at issue. As employees were required to agree to the employer-imposed arbitration clause and its class action waiver, the court found the clause to be unreasonable and thus illegal. Over the last decade, the use of arbitration clauses has exploded. Mandatory arbitration agreements are now commonplace in contracts and can be found in millions of consumer contracts for products and services. Thus, this decision marks a major victory for the American workforce. However, it is certainly controversial because it conflicts with earlier decisions by other federal appeals courts. The circuit split will likely prompt the Supreme Court to weigh in on the enforceability of these proliferating provisions mandating individual arbitration.