Supreme Court Sides with Epic Systems Corp. in Arbitration Case

The 5-4 decision upholds legality of arbitration clauses in employment contracts.

The U.S. Supreme Court announced Monday morning that it has sided with electronic health records company Epic Systems Corp. in a dispute over arbitration clauses in employment contracts.

The 5-4 decision holds that federal labor laws do not prohibit employment contracts from banning class action litigation. The ruling sides not only with the EHR company but also with the Trump administration's Department of Justice.

"The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written," Justice Neil Gorsuch wrote for the majority, overturning the Seventh Circuit's prior decision in the Epic case.

• Significant impact: Many cases pending in courts around the country could be impacted by this decision. A recent memo from the National Labor Relations Board general counsel listed 152 such cases, 52 of which were placed on hold in appellate court proceedings, as The National Law Journal reported.
   
• What it means: This decision means employers are permitted to use arbitration clauses to bar employees from joining together in litigation over workplace complaints, as The New York Times reported.
   
• The dissent: Justice Ruth Bader Ginsburg decried the narrow majority's decision as "egregiously wrong," calling on Congress to change the law to protect workers' rights.

In addition to the Epic case, the decision applied also to cases involving Ernst & Young and Murphy Oil USA.