Epic Systems users group meeting

A rapt audience of 11,000 filled the Deep Space auditorium at Epic System Corp. in Verona on Tuesday as founder Judy Faulkner — garbed in a red wizard's gown and hat — addressed the annual users group meeting. 

PHOTO BY JUDY NEWMAN — STATE JOURNAL

Epic Systems heads to the U.S. Supreme Court on Monday to defend the way it handles employee disputes.

The Verona-based electronic medical record company is part of a three-case consolidated oral argument set to be heard by the justices for one hour at 10 a.m.

Oral arguments in the case come on the heels of the company’s annual Users Group Meeting, a four-day themed conference for the company’s customers.

Epic’s case, Epic v. Lewis, is being joined with National Labor Relations Board v. Murphy Oil USA and Ernst & Young LLP v. Morris. Each case deals with questions over how corporations deal with employee disputes.

The Epic v. Lewis case is one of four class-action labor lawsuits Epic is facing. One was settled by a federal judge in February and the others are on hold pending a decision in the Lewis case.

Here are some questions and answers ahead of the hearing.

What is the case about?

The case deals with the wage complaint of Jacob Lewis, a former Epic technical writer. Lewis sued the company in federal court arguing Epic had violated federal and Wisconsin law by unlawfully depriving him and other technical writers of overtime pay. While the case is specifically answering the questions of whether Epic owes Lewis money, the Supreme Court will weigh in on a question of whether the case should be dismissed due to an “individual arbitration agreement.”

Lewis sued Epic after he, along with other writers, was forced to sign such an agreement which would bar him from taking any complaints over his pay or hours to court. Instead, the agreement mandated that Lewis and other employees settle disputes individually, in internal hearings with the company.

Epic moved to dismiss his suit, but it was upheld in federal district court and in the Seventh Circuit Court of Appeals last year. Both courts agreed that Epic’s arbitration policy violated federal law.

What is the legal conflict here?

The cases present a conflict between two federal laws: the National Labor Relations Act of 1935, which provides for and encourages employees to collectively bargain and sue over labor disputes, and the Federal Arbitration Act of 1925, which states that arbitration agreements “shall be valid, irrevocable, and enforceable.”

Justices will decide whether mandatory arbitration between employers and employees violates the National Labor Relations Act, or whether it is legal because of the Federal Arbitration Act.

The court will also look at whether employees have a right to have labor disputes heard in court and whether they have a right to band together to take those complaints to court.

Why does it matter?

The case will have widespread implications for employee recourse against employers. If the court rules in favor of Epic, Murphy Oil and Ernst & Young, it would affirm that companies are able to compel employees to sign individual arbitration agreements, barring them from settling disputes in court, and/or bringing those disputes to court in groups.

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In its petition asking the Supreme Court to take its case, Epic argued that the resolution of the arbitration issue “thus carries significant implications for the employer-employee relationship. Employers need to know whether class waivers in arbitration provisions will actually be enforced. Employees need to know whether they are actually bound by these provisions.”

Arbitration agreements required by employers have increased significantly over the last two decades, according to a report from the Economic Policy Institute, a nonpartisan nonprofit based in Washington, D.C.

Its report, based on a national survey of employers, found that more than 60 million Americans are now covered by arbitration agreements at work. It also found that since the early 2000s, the number of workers subject to mandatory arbitration has doubled, now exceeding 55 percent of the American workforce.

What have the courts said about this issue in the past?

The Supreme Court is weighing in on the matter in large part because federal courts are split. The Seventh Circuit Court of Appeals out of Chicago, ruled last year that Epic’s arbitration deals are illegal. The Ninth Circuit out of San Francisco agreed in another case that employee arbitration was illegal.

But in the Murphy Oil case, the New Orleans-based Fifth Circuit ruled that the company was legally able to impose arbitration agreements on employees.

The U.S. Supreme Court affirmed a different kind of arbitration, between corporations and consumers, in 2011 and 2013. That kind of arbitration bars consumers from suing a company in court over a complaint about a product or service, if the consumer has signed an arbitration agreement. Instead, customers have to take complaints to the company where it is handled internally.

Where can I read more?

 

Katelyn Ferral is The Cap Times' public affairs and investigative reporter. She joined the paper in 2015 and previously covered the energy industry for the Pittsburgh Tribune Review. She's also covered state politics and government in North Carolina.