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The K & B Blog

Seventh Circuit Rules on Individual Arbitration Clauses in Employment Contracts

Seventh Circuit Rules on Individual Arbitration Clauses in Employment Contracts

The Wisconsin-based software giant Epic Systems was recently involved in a federal lawsuit concerning an email sent to its employees mandating arbitration of all individual wage and hour claims, thereby prohibiting collective suits. The email further indicated that continued employment with Epic Systems constituted knowledge and acceptance of these new contractual terms.

In Lewis v. Epic Systems Corp. (2016), a three-judge panel for the Seventh Circuit Court of Appeals upheld an earlier ruling by the U.S. District Court for the Western District of Wisconsin which held that Epic’s arbitration clause was in violation of the National Labor Relations Act (NLRA). The NLRA provides employees with the right to self-organization, unionization, and collective bargaining. The Court ruled that by mandating individual rather than collective dispute resolution, Epic’s arbitration provision ran afoul of the Act.

For a more detailed account of the case against Epic Systems and its impact on arbitration clauses in employment contracts, read this May 31, 2016 piece by Joe Forward of the State Bar of Wisconsin:


As with any other legally binding contract, contracts for employment may have a dramatic impact on your life. Employment contracts may dictate the recourse you have if a dispute arises, the type of work you may pursue and where you may pursue it upon termination of employment, as well as prohibited activities during the course of your employment. For this reason, it is important to consult with an experienced attorney prior to signing a contract with legal consequences. With over 42 years of employment law experience, John M. Kelly, Attorney at Law, LLC can help guide you through the hiring process to ensure that your employment contract contains terms and conditions that are fair and compliant with Wisconsin law.