Epic Wins In Supreme Court Decision Seen As Blow To Worker Rights

The nation’s highest court has ruled in a case that involves Wisconsin-based software giant Epic Systems. The decision, widely seen as a victory for employers over workers, is likely to have ripple effects beyond those employed by the electronic health records company which has its headquarters in Dane County.

The U.S. Supreme Court ruling determines how employees and employers settle disputes over pay, hours and other working conditions. The case was brought against three companies, including Epic, that prevented workers from using class-action litigation to settle disputes by requiring they sign arbitration agreements as a condition of employment. Workers at the companies sued for the right to choose where their disputes could be heard.

“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,” wrote Justice Neil Gorsuch for the majority in a 5-4 decision.

The justices looked at which of two federal laws — the Federal Arbitration Act of 1925 or the National Labor Relations Act of 1935 — applied in this case and whether they conflict. The former favors arbitration, while the latter states employees have the right to organize.

As NPR’s Nina Totenberg reports, the majority found, “the 1925 Federal Arbitration Act trumps the National Labor Relations Act and that employees who sign employment agreements to arbitrate claims must do so on an individual basis — and may not band together to enforce claims of wage and hour violations.”

Caitlin Madden is one of the attorneys who worked on the case brought by former Epic employee Jacob Lewis, who said he was denied overtime pay.

“As pointed out by Justice (Ruth Bader) Ginsberg in her dissent in her opinion, a lot of individual employment claims may not be worth a lot of money, making it challenging when they have to find an attorney when they have to bring these claims themselves on an individual basis,” said Madden after the decision was handed down Monday.

An estimated 25 million workers could be affected by the decision, according to University of Wisconsin-Madison Law School professor Steph Tai.

“About 50 percent of non-union, private sector employees have arbitration agreements in their contracts,” Tai said.

And the impact could go beyond that. Attorney Madden said it’s conceivable that sexual harassment plaintiffs might not be able to consolidate cases and consumers who feel they’ve been ripped off could not band together.

“Consumers may have a small dollar value claim that they are unable to vindicate individually because the arbitration process is expensive and cumbersome, but that may be better vindicated on a class basis where you can group people together who have a similar legal claim,” said Madden.

Epic officials said they are pleased the court sided with employers and said its system of dealing with workplace disputes is fair.

“It is important that employers protect an employee’s right to file complaints, while also providing for a fair forum in which those grievances are addressed. When it comes to grievances regarding wages and hours, we believe individual arbitration agreements strike that reasonable balance and are pleased with the court’s decision in support of this,” said Epic founder and CEO Judy Faulkner in a written statement.

Under Epic’s arbitration agreements, employees can’t jointly file complaints and must sign confidentiality agreements.

The court has taken similar approaches to other recent arbitration cases, according to Tai. Most of those cases, she said, have been in the consumer context so this is moving into the employment realm.

“A lot of this comes from the Supreme Court’s interpretation of the Federal Arbitration Act and that could be changed if the political climate changes,” said Tai. “Because Congress could amend the Federal Arbitration Act.”