Class Action Waivers in Employment Agreements: What You Need to Know
In recent years, many employers are including class action waivers in their employment agreements. While this may seem like a minor addition, it can have a significant impact on employees’ rights in the workplace.
What is a Class Action Waiver?
A class action waiver is a provision in an employment agreement that prohibits employees from participating in a class action lawsuit against their employer. Instead, it requires employees to pursue their claims individually, typically through arbitration rather than in court.
The Pros and Cons of Class Action Waivers
For employers, class action waivers have several advantages. They can reduce the likelihood of costly class action lawsuits, limit damage awards, and keep disputes out of the public eye. Additionally, arbitration is often less expensive and quicker than courtroom litigation.
However, for employees, class action waivers can limit their ability to seek justice for workplace violations. It can be more difficult and expensive for individuals to pursue claims on their own, and they may not have the same bargaining power as a collective group. Additionally, arbitration proceedings are often confidential, which can make it challenging to identify and address systemic issues.
Are Class Action Waivers Legal?
The legality of class action waivers in employment agreements has been a subject of debate in recent years. In 2018, the U.S. Supreme Court ruled in Epic Systems Corp. v. Lewis that employers can include class action waivers in arbitration agreements, even if it violates federal labor laws. This decision has been criticized by labor advocates who argue that it undermines workers’ rights.
However, several states, including California, New York, and Illinois, have passed laws that prohibit employers from including class action waivers in employment agreements. These laws are aimed at protecting workers’ ability to pursue collective action against their employers.
What Should Employees Do?
If you are presented with an employment agreement that includes a class action waiver, it is important to understand the implications of that clause. Consider consulting with an employment lawyer to ensure that you fully understand your rights and options.
If you are already bound by an employment agreement that includes a class action waiver, you may still be able to pursue individual claims through arbitration. However, it is important to understand the limitations of arbitration and the potential costs involved.
Ultimately, the decision of whether or not to sign an employment agreement that includes a class action waiver is up to the individual employee. However, it is important to be aware of the potential implications of such a provision and to make an informed decision.