The Supreme Court of the United States (SCOTUS) issued a decision on May 21, 2018 in the case of “Epic Systems v. Lewis” (commonly referred to as “Epic”) which will have a profound impact on arbitration agreements for California employers. The case concerns the Federal Arbitration Act (FAA) and the enforcement of arbitration agreements. How will Epic Systems v Lewis affect arbitration for San Diego employers and provide a new layer of defense against the impact of the new Dynamex opinion?
The Epic case addresses the consolidated three Fair Labor Standards Act (FLSA) cases which involved employer-employee agreements which required bilateral or “individual” arbitration. The SCOTUS found the FAA requires courts across the country to enforce employer-employee arbitration agreements according to the specific terms contained within those agreements. This is true when the underlying contracts specify “individualized proceedings” versus the consolidation of arbitration procedures as a class.
How will Epic Systems v Lewis affect arbitration and you as a San Diego employer? The Epic decision provides San Diego employers with more certainty that decisions reached in bilateral arbitration will be upheld and enforced by California courts. There are still several important challenges within the US court systems regarding arbitration agreements.
How Will Epic Influence California Cases and PAGA Claims
Will Epic Systems v Lewis affect arbitration for San Diego employers and soften the genuine risks associated with Dynamex? Epic may have serious implications regarding the ability to seek arbitration for claims which arise out of California’s Labor Code Private Attorneys General Act or PAGA. The questions seem to center on the California Supreme Court’s findings regarding PAGA claims in Iskanian v. CLS Transportation Los Angeles LLC (Commonly referred to as Iskanian).
Generally speaking, the Iskanian decision focused on a finding that a contractual provision which completely waives PAGA claims is not enforceable. The Iskanian decision actually concluded the FAA does not preempt its “rule against PAGA waivers” as “the FAA aims to ensure an efficient forum for the resolution of private disputes, whereas a PAGA action is a dispute between an employer and the state.” The decision did not specifically address the ability to arbitrate PAGA claims. Presently, claims brought under PAGA (generally wage and hour claims) cannot be contractually forced into arbitration.
What does this really mean?
Presently, San Diego employers may enforce binding arbitration agreements as they apply to class action cases, but PAGA cases cannot be individually arbitrated. Many believe the Epic decision will embolden California employers to ensure arbitration agreements are mandatory for all employees.
The SCOTUS Epic decision may provide some desperately needed good news after the recent California Supreme Court Dynamex opinion. Epic helps to provide relief from some of the financial penalties and risks of Dynamex by allowing arbitration agreements which preclude class actions as a strategy to soften the impact of Dynamex.
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Contact The Watkins Firm for Solutions to Dynamex and Advice Regarding Epic
How will Epic Systems v Lewis affect arbitration in San Diego and impact those who face misclassification actions? The Watkins Firm has served the San Diego business community for decades and has established a strong reputation and a successful track record at trial defending San Diego employers and business entities. Our proven general business counsel and employer defense attorneys will help your entity to come into immediate compliance with Dynamex while working to protect you against past, present and future financial liabilities.
We help to develop strategies, such as arbitration agreements with class action wavers supported by Epic to reduce the impact and risk associated with Dynamex for San Diego businesses and non-profit organizations.
Our work will save your business or organization a substantial amount of money and in many cases prevent the genuine potential of bankruptcy or the closing of your company.
We invite you to review the recommendations of our clients and the legal industry and contact the Watkins Firm or call 858-535-1511 for a free consultation and to schedule an appointment with one of our experienced attorneys. The Dynamex opinion is certainly not good news for most California businesses. It is, however, a genuine reality and the risks associated with misclassification cannot be overstated. The SCOTUS Epic decision is one ingredient in the Watkins Firm strategy to reduce the exposures created by Dynamex. Learn more and take action today to protect your business and save a substantial amount of money, time and hassle.