The justices ruled 5-4 in Epic Systems v. Lewis that class-action waivers that employers insert in employee arbitration contracts do not violate or interfere with workers' ability to defend their rights. Two months prior to the ruling, it seems one company had already taken action to limit employees' legal options.

Home improvement giant Lowe's now requires their salaried managers and assistant managers to enter binding arbitration agreements, agreeing not to take the retailer to court for any claims or that they won't join a class-action lawsuit, Huffington Post reports. Employees would instead have to take their grievances individually and in private to an arbitrator, which advocates say severely restricts their legal remedies.

A copy of the contract dated March, obtained by the Huffington Post, notes that Lowe's managers and assistant managers face serious consequences if they don't sign it. The contract states that "your participation in the 2018 Manager Bonus Program" hinges on the signature as well as "your continued employment at Lowe's," Huffington Post reports.

Years before the Supreme Court ruling, many employers already had adopted mandatory arbitration agreements. About 54% of non-union private-sector employers have such agreements in place, and for companies with 1,000 or more employees, 65.1% have mandatory arbitration arrangements, the Economic Policy Institute reported last year in a study it conducted.

For private-sector non-union employees, 56.2% are bound by these agreements. For the total workforce, that works out to 60.1 million workers who are not able to use the courts to defend their employment rights and who are restricted to arbitration.

While Huffington Post has no evidence of instances where Lowe's has followed through and fired managers for refusing to sign, internal emails viewed by its reporters "show a human resources officer instructing a manager to submit the signed contract if the manager wants a bonus this year."

Lowe's did not respond to Huffington Post's inquiries about why it introduced the arbitration contracts and if hourly employees would be bound by them as well.
The Supreme Court ruling also bodes well for fast-food chain Chipotle, Huffington Post reports in another article.

About 10,000 current and former Chipotle workers joined in a 2014 class action alleging the company systemically required that they work "off the clock" and they have sued for the loss of pay. But Chipotle has claimed that 2,814 of those workers had signed class- and collective-action waivers, and therefore have no standing to be part of the suit.

"What the ruling most likely means for the Chipotle lawsuit is that roughly 7,000 workers will be able to pursue their claims collectively, while nearly 3,000 other workers will not," Huffington Post reports. "If the judge grants Chipotle's request to exclude the latter, those workers would have to go individually and in private before an arbitrator. That is, if they happen to find a lawyer willing to take on a case with a claim that may be smaller than the cost of litigating it."

For Lowe's employees, these arbitration agreements have serious implications. Bonuses can run as high as several thousands of dollars in this industry and are important for managers who don't receive overtime pay.

Lowe's has faced lawsuits in the past for misclassifying workers as managers, which workers have claimed allowed the retailer to dodge the Fair Labor Standards Act that offers workers minimum wage and overtime protections.

"The bonus is why I work the 55-hour weeks," one manager speaking anonymously said. "I gain nothing with this," the manager added regarding the arbitration agreement.

In 2014, Lowe's agreed to pay out $9.5 million to human resources managers who joined in a class action lawsuit alleging that the retailer misclassified them as managers so it could avoid paying them overtime, Law360 reports.

On top of requiring their managers to sign arbitration agreements, Lowe's requires employees to fork over a $150 filing fee if they decide to go to arbitration.

"Such agreements are sometimes tucked into the onboarding materials that employees must sign to start a new position," Huffington Post reports. "If a worker does not sign it, she may not get the job. Many workers don't understand what rights they are giving up by agreeing to arbitration, if they bother to read the contract at all."

Clermont Ripley, workers' rights project staff lawyer for N.C. Justice Center, says changes will be swift, the Winston-Salem Journal reports. "The more sophisticated employer or corporation will act on the arbitration clause immediately since the Supreme Court decision removed the uncertainty about the ramifications of these agreements," Ripley says. "For the less sophisticated employer, those who have not depended on explicit employment contracts, it may take a while, but eventually they are likely to get on board as well."

Robin Shea, a partner at the Winston-Salem office of Constangy, Brooks, Smith & Prophete, expects many employers to amend the arbitration agreements they already had in place prior to the ruling. For "many employers who were already using arbitration agreements that did not contain class waivers, [they] will probably be amending their existing agreements to add those provisions," Shea notes.

But employers may want to hold back on imposing mandatory arbitration agreements, Andrew Melzer, partner and co-chair of Sanford Heisler Sharp's wage and hour practice, tells Human Resource Executive. Confidentiality and arbitration agreements imposed on employees may subject companies to a huge backlash amid the #MeToo movement.

"Accordingly, employers should think twice before imposing arbitration agreements on their workers," he says.