The arbitration agreement that Epic Systems imposed on workers, barring them from going to court to settle wage disputes, is valid and does not violate state and federal law, a federal judge ruled Friday, closing a 4-year-old case that had reached the U.S. Supreme Court, which last year issued a decision expected to have lasting impact on employer-worker relations.
In May, ruling in a case that involved a group of technical writers at the Verona-based medical software giant, the Supreme Court ruled 5-4 that employees can be forced to use arbitration, and not the courts, to settle disputes about wages and overtime. The high court sent the case back to U.S. District Court in Madison, where Judge Barbara Crabb had previously sided with the workers in voiding Epic’s arbitration agreement.
Lawyers for the workers, which had sought to pursue a class-action case against Epic, contended after the Supreme Court’s ruling that the agreement itself, which dictated the arbitration of claims involving wages, overtime and a host of other pay-related issues, was “unconscionable” as defined under state law because its terms did not offer workers a meaningful choice and heavily favored Epic.
In her decision Friday, Crabb wrote that lawyers for the Epic workers argued that the agreement was unconscionable because Epic “exploited its superior bargaining power by presenting the arbitration agreement on a take-it-or-leave-it basis,” without giving lead plaintiff Jacob Lewis an opportunity to reject it or ask questions before it became valid.
Crabb wrote, however, that the agreement, sent to workers by email, gave Lewis the option of having Epic contact him to answer questions, “but he failed to choose that option.”
Crabb also wrote that Lewis could have rejected the terms of the arbitration agreement and looked for another job. While it was suggested, she wrote, that many Epic workers are subject to non-compete agreements, no evidence was submitted that Lewis was subject to such an agreement.
Crabb also rejected the suggestion that Epic’s email to workers about ongoing litigation that prompted the arbitration agreement was misleading, rendering the agreement “unconscionable.” She added that claims that the agreement mischaracterized the arbitration process when it said arbitration could provide “the same remedies as if you were in court” did not cause confusion for Lewis about the arbitration process or his rights under the agreement.
There was no immediate comment Friday from Epic. Caitlin Madden, one of the lawyers representing Epic workers in the case, said that while they won’t continue to challenge the validity of the agreement in court, they will continue to pursue the wage claims of workers in arbitration.
“We’re disappointed that the employees won’t have their claims heard in a public forum,” she said.
The lawsuit was one of several filed against Epic over wage issues since 2013. The first, involving a group of then-current and former Epic quality assurance workers, was settled in 2014 for $5.4 million.
While that case was pending, Epic emailed arbitration agreements to its workers, writing that by continuing to work at Epic, they were deemed to have accepted the agreement.
Two more lawsuits, both involving technical writers, were filed in February 2015. One of the lawsuits, involving former technical writers not subjected to arbitration agreements, was settled for an undisclosed sum, while the other was the case that reached the Supreme Court.
Another case, which is pending, was filed on behalf of another group of quality assurance workers. That case was put on hold while the Supreme Court decided the case involving the technical writers, but since the high court’s ruling, U.S. District Judge William Conley hasn’t ruled yet on Epic’s motion to dismiss the case and compel arbitration.