Systems (CRS Report for Congress)
| Release Date |
June 13, 2018 |
| Report Number |
LSB10148 |
| Report Type |
Legal Sidebar |
| Authors |
Jon O. Shimabukuro |
| Source Agency |
Congressional Research Service |
Summary:
The Supreme Court’s recent decision in Epic Systems Corp. v. Lewis upheld the use of mandatory
arbitration agreements limiting an employee’s ability to participate in employment-related collective
action (including class action lawsuits). (A related CRS Legal Sidebar on Epic Systems is available here.)
Justice Gorsuch, writing for a majority of the Court, concluded that Section 7 of the National Labor
Relations Act (NLRA), which recognizes an employee’s right to engage in “concerted activities” related
to employment, did not displace the application of the Federal Arbitration Act (FAA), a law enacted to
ensure the validity and enforceability of arbitration agreements. While Epic Systems may prompt greater
use of arbitration provisions in employment contracts, the decision also highlights disagreement by the
Justices regarding the proper method for interpreting Section 7 of the NLRA. A similar disagreement
arose in Encino Motorcars, LLC v. Navarro, the Court’s April 2018 decision involving the Fair Labor
Standards Act (FLSA) and overtime pay for car dealership service advisors. The Justices in Epic Systems
and Encino Motorcars were divided along the same 5-4 lines, with the majority eschewing consideration
of the legislative histories of the relevant labor and employment laws when deciding how these statutes
applied. Taken together, these cases illustrate a division in the Justices’ analytical approach to interpreting
federal labor and employment laws; a division that may have implications for future administrative and
judicial decisions concerning the protective scope of these laws.
