Employment Litigation · Primary-source case analysis

Epic Systems: Individual-Arbitration Agreements Govern Collective Wage Claims

By Aneeta Mishra and Timothy Chan

Published April 16, 2026

Epic Systems resolved consolidated disputes over agreements requiring employees to arbitrate wage claims individually rather than through class or collective proceedings.

Employees pursued collective litigation

Employees who had agreed to individualized arbitration filed federal class or collective actions asserting Fair Labor Standards Act and related state-law claims. They argued that the FAA’s saving clause and the National Labor Relations Act permitted courts to refuse enforcement of the individualized-proceeding terms.

The FAA’s saving clause did not apply

The Court read the saving clause to preserve generally applicable contract defenses such as fraud, duress, or unconscionability. An objection aimed at the agreement precisely because it requires individualized arbitration attacks a fundamental attribute of arbitration rather than a ground applicable to contracts generally.

The NLRA did not displace the FAA

Section 7 of the NLRA protects organizing and collective bargaining but does not clearly create a right to class or collective litigation that overrides the FAA. The Court refused to infer a repeal by implication where Congress had not supplied a clear conflict between the statutes.

Disposition

The Court enforced the individualized-arbitration agreements, reversing the Seventh and Ninth Circuit judgments and affirming the Fifth Circuit. Contract formation, scope, waiver, and generally applicable defenses can still present separate issues in a particular case.

Key takeaways

• The FAA generally requires enforcement of individualized-arbitration terms.
• The saving clause preserves generally applicable contract defenses.
• The NLRA does not itself guarantee class or collective adjudication.
• The particular agreement and later arbitration authority still require case-specific review.