On May 22, In an important 5-4 decision, the U.S. Supreme Court held that class or collective action waivers, particularly in wage/hour cases, and contained in arbitration agreements between employers and employees are valid and enforceable.

Companies can use arbitration clauses in employment contracts to prohibit workers from banding together to take legal action over workplace issues. The vote was 5 to 4, with the court’s more conservative justices in the majority. The court’s decision in Epic Systems Corp v Lewis could affect some 25 million employment contracts.

And perhaps the first victory for an employer under this new case law involves an Uber driver who claims in a federal case pending in New York that the ride-hailing company illegally charged him and other drivers a workers’ compensation fee. On May 31, the United States District court ordered that he must pursue his argument in arbitration as an individual, not a class action.

Gustavo Camilo agreed to arbitrate any disputes with Uber Technologies Inc. on “an individual basis only,” Judge Alvin K. Hellerstein of the U.S. District Court for the Southern District of New York said. Camilo therefore can’t proceed with a class action alleging various theories against the company.

The drivers sue on three counts; breach of contract, unjust enrichment and unlawful wage deduction. The class action suit was filed in the Supreme Court of the State of New York, and was timely removed to federal court under the Class Action Fairness Act.They demanded a jury trial, and seek reimbursement and restitution.

Uber moved to compel arbitration of the claims alleged against the Uber Defendants, to strike Plaintiff’s class allegation, and to dismiss the Complaint, on the basis of the arbitration and class waiver clause contained in Plaintiffs agreement with Uber.

In first registering as an Uber driver, a prospective driver must agree to a technology services agreement with Uber. Plaintiff signed an agreement with Uber requiring that all disputes or issues, including the question of arbitrability, be resolved through binding arbitration.The arbitration provision contains a class waiver, preventing the arbitrator from considering claims on a class or representative basis

In ruling on the motion, the court referenced the new Supreme Court decision when it said “More recently, and subsequent to the briefing in this case, the Supreme Court held that waivers of class actions are valid and not precluded by Section 7 of the NLRA, 29 U.S.C. § 157. See Epic Sys. Corp. v. Lewis, No. 16-285, 2018 WL 2292444 (U.S. May 21, 2018).”

Accordingly the court ordered “Plaintiff is directed to arbitrate his claims on an individual basis and this action will be stayed pending the arbitration.”