## Facts

- Several employers required employees, as a condition of employment, to sign arbitration agreements mandating individualized arbitration and waiving class or collective proceedings.
- Employees nevertheless filed class or collective wage-and-hour suits in federal court under the Fair Labor Standards Act and related state laws.
- Employers moved to compel individual arbitration under the Federal Arbitration Act (FAA).
- The Seventh and Ninth Circuits held the class-waiver provisions violated employees’ rights under § 7 of the National Labor Relations Act (NLRA) and were unenforceable under the FAA.
- The Fifth Circuit rejected the National Labor Relations Board’s (NLRB) position and enforced the agreements.
- The Supreme Court consolidated the cases to resolve whether the NLRA bars enforcement of individualized arbitration agreements under the FAA.

## Issues

1. Whether the NLRA’s protection of employees’ “concerted activities” creates a right to pursue class or collective legal proceedings that renders class-waiver arbitration agreements unlawful.
2. Whether the FAA’s saving clause permits courts to refuse enforcement of arbitration agreements requiring individualized proceedings based on the NLRA.
3. Whether any “contrary congressional command” in the NLRA displaces the FAA’s directive to enforce arbitration agreements as written.

## Decision

- The Court (5–4, Justice Gorsuch) held the FAA requires enforcement of arbitration agreements providing for individualized proceedings, including class- and collective-action waivers.
- The Court rejected the argument that the NLRA creates a substantive right to class or collective litigation or arbitration procedures.
- The Court concluded the FAA’s saving clause preserves only generally applicable contract defenses and does not allow rules that target arbitration or its individualized-proceeding terms.
- The Court declined to defer to the NLRB’s interpretation where it would effectively override the FAA without a clear statement from Congress.
- The Court affirmed the judgment enforcing the agreements in the Fifth Circuit case and reversed and remanded the Seventh and Ninth Circuit cases.

## Legal Principles

- The FAA directs courts to enforce arbitration agreements according to their terms, including provisions requiring individualized arbitration.
- The FAA saving clause permits nonenforcement only on generally applicable contract grounds (e.g., fraud, duress, unconscionability), not defenses aimed at arbitration features such as class waivers.
- The NLRA’s § 7 protection of “concerted activities” does not establish a right to use class or collective action procedures in court or arbitration.
- A later federal statute displaces the FAA only with a clear and manifest congressional command; silence about arbitration or class procedures is insufficient.
- Agency interpretations are not controlling where they purport to reorder the operation of a federal statute the agency does not administer and would imply displacement of another statute without clear authorization.

## Conclusion

The Court held that employment agreements requiring employees to arbitrate disputes individually and waiving class or collective proceedings must be enforced under the FAA, and that the NLRA does not invalidate such agreements absent an explicit congressional directive.


Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018)