A Wisconsin federal appeals court has ruled companies cannot require workers to sign arbitration agreements, in which employees and employers privately settle disputes instead of going to court, reports The New York Times.
The court was hearing a case between Epic Systems and Jacob Lewis, an Epic employee. In April 2014, Epic sent an email to employees with an arbitration agreement saying claims regarding wages and working hours could only be raised through individual arbitration, and employees waived the right to participate in any class, collective or representative proceeding, according to the court decision.
Additionally, the email said employees were "deemed to have accepted this Agreement" if they continued working at Epic, and did not offer employees an option to decline the arbitration agreement, according to the court decision.
Later, Mr. Lewis sued Epic in an overtime lawsuit, alleging the company had denied him and other employees overtime wages. Epic sought to dismiss the lawsuit and uphold the arbitration agreement, which a district court denied. Epic appealed the district court's decision.
The appeals court says Epic's arbitration agreement violates the National Labor Relations Act of 1935, which was passed to encourage collective bargaining and protect the general welfare of workers, and is unenforceable under the Federal Arbitration Act, as the act does not protect all arbitration clauses.
Epic is not the only health IT vendor to introduce arbitration clauses. In November, Cerner offered employees the choice to either give up their right to traditional litigation or give up merit-based pay raises. Cerner also currently faces several lawsuits regarding overtime pay.
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