Epic Systems v. Lewi

138 S.Ct. 1612 (2018)

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Nature of the Case

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Facts

Ernst & Young and one of its junior accountants, Stephen Morris, entered into an agreement providing that they would arbitrate any disputes that might arise between them. The agreement stated that the employee could choose the arbitration provider and that the arbitrator could “grant any relief that could be granted by . . . a court” in the relevant jurisdiction. The agreement also specified individualized arbitration, with claims “pertaining to different employees [to] be heard in separate proceedings.” After his employment ended, Morris sued Ernst & Young in federal court. He alleged that the firm had misclassified its junior accountants as professional employees and violated the federal Fair Labor Standards Act (FLSA) and California law by paying them salaries without overtime pay. Morris sought to litigate the federal claim on behalf of a nationwide class under the FLSA’s collective action provision, 29 U. S. C. §216(b). He sought to pursue the state law claim as a class action under Federal Rule of Civil Procedure 23. Ernst & Young moved to compel arbitration. The district court granted the request, and the Ninth Circuit reversed. The Ninth Circuit reasoned that the statute’s “saving clause,” see 9 U. S. C. §2, removes this obligation if an arbitration agreement violates some other federal law. The court concluded that an agreement requiring individualized arbitration proceedings violates the NLRA by barring employees from engaging in the “concerted activity,” 29 U. S. C. §157, of pursuing claims as a class or collective action. Three such cases were consolidated, and the Supreme Court granted certiorari.