Epic Systems Corp. v. Lewis

PETITIONER: Epic Systems Corporation
LOCATION: Madison, Wisconsin

DOCKET NO.: 16-285
LOWER COURT: United States Court of Appeals for the Seventh Circuit

GRANTED: Jan 13, 2017

Facts of the case

Epic Systems Corporation (Epic) is a Wisconsin-based healthcare data management software company. Epic has an arbitration agreement that requires its employees to resolve any employment-based disputes with Epic through individual arbitration and to waive their right to participate in or receive benefit from any class, collective, or representative proceedings. In February 2015, former Epic employee Jacob Lewis sued Epic in federal court individually and on behalf of similarly-situated employees and claimed that they had been denied overtime wages in violation of the Fair Labor Standards Act of 1938. Epic moved to dismiss the complaint and cited the waiver clause of its arbitration agreement. The district court denied Epic’s motion and held that the waiver was unenforceable because it violated the right of employees to engage in “concerted activities” under Section Seven of the National Labor Relations Act (NLRA). The U.S. Court of Appeals for the Seventh Circuit affirmed the lower court’s decision and added that the waiver was also unenforceable under the savings clause of the Federal Arbitration Act (FAA). That clause provides that arbitration agreements are to be enforced unless there legal or equitable grounds that would render a contract unenforceable. Finding the waiver of collective proceedings illegal under the NLRA, the appellate court held that the arbitration agreement was unenforceable under the FAA. This case was consolidated with Ernst & Young v. Morris  and National Labor Relations Board v. Murphy Oil USA, Inc., both cases that dealt with the relationship between the FAA and the NLRA.


Does the National Labor Relations Act prohibit enforcement an agreement requiring employees to resolve disputes with the employer through individual arbitration under the Federal Arbitration Act?