The United States Supreme Court is taking another bite at the arbitration waiver apple. In addition to its landmark decision in Epic Systems Corp. v. Lewis, where the Supreme Court held that class and collective action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act, the Supreme Court has granted cert to review the Ninth Circuit’s decision in Varela v. Lamp Plus, Inc. and will decide whether workers can arbitrate on a class-wide basis where the agreement in question is silent on class arbitration.
The arbitration clause in Varela is silent on the issue of whether the workers who signed it can pursue their claims through class arbitration. The Ninth Circuit held that the agreement’s silence rendered it ambiguous on the issue, and thus the most reasonable reading of the broad contract language would allow employees to pursue their claims through class arbitration.
We will continue to monitor this case and provide you with updates. While Epic Systems has provided employers with a roadmap for crafting future arbitration agreements, the decision in Varela will affect the rights of employees and employers alike who have already entered into arbitration agreements that are silent on class arbitration.