Electronic health record vendor Epic Systems Corp. has asked the U.S. Supreme Court to weigh in on whether employer-employee arbitration agreements are enforceable.
In a petition for certiorari filed on Sept. 2, Epic called on the justices to overturn a Seventh Circuit decision that the company's so-called class waivers violate employees' rights by forcing them into individual arbitration actions rather than allowing them to collectively challenge workplace disputes.
So far, three federal appeals courts and two state high courts have upheld employer-employee arbitration agreements, while two other federal appeals courts and the National Labor Relations Board have rejected the policies. The circuit split makes it more likely that the Supreme Court will take up the case in order to provide guidance amid the growing confusion over class waivers.
Epic first introduced its arbitration agreements to employees in an April 2014 email, which asked them to review and consent to resolving workplace issues via binding arbitration. In February 2015, a former technical writer, Jacob Lewis, sued the EHR company in federal court and alleged it had denied technical communications employees their overtime pay.
Both the Wisconsin federal court and the Seventh Circuit refused to toss the putative class action, ruling that Epic's class waiver infringed on employees' rights. But Epic maintains that the courts' reasoning was too overarching.
“The court of appeals in this case interpreted the NLRA to render class or collective waivers in employment arbitration agreements illegal,” the petition said. “But that illegality-based defense – which arises only in some contracts, not 'any contract,' – can hardly be likened to classic universal defenses such as fraud and mistake.”
Epic claims the Supreme Court must weigh in on the subject because there is so much uncertainty for both employers and employees surrounding the agreements, which are common in the workforce.
“Employers need to know whether class waivers in arbitration provisions will actually be enforced,” Epic said. “Employees need to know whether they are actually bound by these provisions.”
In another arbitration case, the Ninth Circuit last month upheld genetic testing company 23andMe's arbitration agreements with its customers. The appellate court upheld the company's terms of service and refused to revive a putative class action alleging the Silicon Valley startup lied about its DNA test kit's health benefits and used unfair business practices. The Ninth Circuit has also ruled that employer-employee arbitration agreements aren't valid in a separate case.