New Battles and Battlegrounds for Mandatory Arbitration After Epic Systems, New Prime, and Lamps Plus

Abstract

The Supreme Court's recent decisions interpreting the Federal Arbitration Act (FAA) in the employment context generally prioritize arbitration over workers’ labor law rights. The majority in Epic Systems Corporation v. Lewis upheld mandatory individual employment arbitration agreements despite their conflict with the labor law right to act in concert. The same majority in Lamps Plus, Inc. v. Varela rejected a state law interpretation of a contract provision to find that parties to an employment contract intend individual arbitration absent reference to group arbitration. A unanimous Court in New Prime v. Oliveira interpreted the FAA to include independent contractors under the transportation worker exemption, reinvigorating the battle over what it means to be engaged in interstate commerce to qualify for the exemption. These decisions resolved some disputes about the breadth of the FAA, but other questions remain. In the wake of Epic Systems and Lamps Plus, state courts and legislatures are testing the boundaries of the FAA's saving clause, with limited success. Confidentiality provisions, frequently associated with arbitration agreements, may unlawfully interfere with employees’ federal labor law rights. This article recommends that Congress amend the FAA to address these issues by excluding all workers engaged in interstate commerce, not just transportation workers, because the Court has strayed far from the original intent of the Act—to enforce commercial agreements in which the parties had equal bargaining power. State legislation also should provide guidance on what makes arbitration voluntary and fair, and provide a choice to employees on collective action, forum, and confidentiality.