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Employers May Prohibit Employees From Opting In To Class Actions

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Last year, in Epic Systems Corp v. Lewis, the Supreme Court held that employers act lawfully when they require employees, as a condition of employment, to enter into agreements with the employer waiving their rights to pursue employment claims through class or collective actions and stipulating that any such disputes would be resolved by individualized arbitration. [1]

In a recent case, the National Labor Relations Board (Board) confronted issues related to that decision. The employer had agreements with employees, whereby the employees had waived their right to pursue their employment disputes through class actions. However, some employees opted in an on-going class action involving employment claims (minimum wage and overtime claims). In response, the employer revised the agreements to prohibit employees from opting in such actions. The employer required employees, as a condition of employment, to sign those revisions to their arbitration agreements.

The Board held that the employer acted lawfully when it  required the employees to accept and sign said revisions. [2] The Board reasoned that since, under Epic, employers may require employees to waive their right to pursue employment claims through class or collective actions, it followed that agreements waiving their right to opt-in to such actions were also lawful.

Employers may consider reviewing their dispute resolution/arbitration agreements to ascertain that the agreements prohibit employees from pursuing employment disputes through class or collective actions AND from opting in any such actions.

[1] 584 U.S. __ (2018).

[2] Cordua Restaurants 368 NLRB No. 43 (August 14, 2019).