Epic's Arbitration Agreement Found Illegal by Seventh Circuit Court of Appeals

MILWAUKEE, May 27, 2016 /PRNewswire/ -- In a stunning victory for workers' rights, the Seventh Circuit Court of Appeals has ruled that Epic Systems Corporation cannot ban class actions by forcing its employees to individually arbitrate their claims for unpaid wages. This decision affirmed a September 2015 ruling by U.S. District Court Judge Barbara Crabb, who denied Epic's motion to dismiss a class action for overtime wages brought by current and former Technical Writers.

Hawks Quindel and Habush Habush & Rottier filed a class action lawsuit against Epic on behalf of Jacob Lewis and a group of employees who are not paid overtime wages. These employees are Technical Writers who prepare the standard documents that accompany Epic's software. The lawsuit contends that Epic misclassified these employees as exempt from federal and state overtime requirements, and that they should be paid time and a half for all hours worked over forty per week as well as penalty damages.

In April 2014, Epic imposed an arbitration agreement that prevented certain employees, including Technical Writers, from bringing suit in court to recover unpaid wages. This agreement also blocked employees from joining together to bring a class action case – an important tool for workers asserting their rights.

In response to the Technical Writer class action filed by Hawks Quindel and Habush Habush & Rottier, Epic asked the Court to dismiss the case and require Mr. Lewis to arbitrate his case individually. The District Court denied that motion and Epic appealed to the Seventh Circuit.

The Seventh Circuit affirmed the lower court's decision in a powerful ruling that protects the right of millions of workers to act collectively for legal recourse against their employers. Because a provision in Epic's arbitration agreement bars its employees from bringing their claims on a class or collective basis, the Seventh Circuit determined that this provision violates the National Labor Relations Act (NLRA), and so is unenforceable and illegal. The Seventh Circuit declared that "[t]he protection for collective action found in the NLRA, moreover, extends far beyond collective litigation or arbitration; it is a general principle that affects countless aspects of the employer/employee relationship." The decision means the case will remain in court where the employees can pursue a class action for unpaid overtime.

Employees' ability to fight collectively for unpaid wages is an important right dating back to the passage of the NLRA in 1935. The Seventh Circuit recognized as much, noting that "[i]n enacting the NLRA, Congress's purpose was 'to equalize the bargaining power of the employee with that of his employer by allowing employees to band together in confronting an employer regarding the terms and conditions of their employment.'"

Mandatory arbitration agreements that strip workers of this right have proliferated in recent years. The Seventh Circuit broke from other circuits who have largely rubber-stamped these no-class provisions in favor of individual arbitration. Finding that "none [of these courts] engaged substantively with the relevant arguments" that it is illegal to force employees to waive their right to act together, the Seventh Circuit's ruling marks an important victory for employees. Unlike other circuits, the Seventh Circuit found that the NLRA and federal arbitration law "work hand in glove," because the NLRA "prohibits enforcement of contract provisions like Epic's, which strip employees' rights," while federal arbitration law declares such illegal contracts unenforceable.     

Had Epic succeeded on this motion, each individual employee would have been required to go through the arbitration process separately to determine whether Epic had compensated them properly, rather than allowing all employees with the same job classification to have this question decided in a single proceeding.

Hawks Quindel and Habush Habush & Rottier will continue to push back against this tide of individual arbitration and fight for the rights of employees.  Attorney Caitlin M. Madden stated, "This is a major victory not only for the Technical Writers at Epic, but all employees in the Seventh Circuit. The Seventh Circuit's decision makes clear that employees have the right to act together when an employer is not paying them correctly. Further, employers cannot take away employees' right to their day in court." Madden went on to say that, "this decision, in addition to the new overtime rules issued by the U.S. Department of Labor last week, are two big wins for employees nationwide."

About Hawks Quindel, S.C.: Hawks Quindel is a Wisconsin law firm representing individuals in employment matters. The firm also represents labor unions. Through our Madison, Milwaukee, and Appleton offices, we help organized labor and individuals statewide prevail in their legal challenges.

About Habush Habush & Rottier:   Habush Habush & Rottier has been assisting individuals injured by the conduct of others since 1930.  With 13 offices throughout Wisconsin, we are proud to represent workers and their families harmed by the carelessness and misconduct of corporations and individuals.

Contact:
Caitlin M. Madden, Attorney
[email protected]
608/843-9619 mobile 

Contact:
Jason J. Knutson, Shareholder
[email protected]
608/556-5401 mobile  

Backup Contact:
William E. Parsons, Shareholder
[email protected]
414/517-8612 mobile

SOURCE Habush Habush & Rottier