The legal victory of former Epic Systems technical writer Emily Harris could be the beginning of a protracted legal battle involving the individual cases of hundreds of former and current employees over the software giant’s refusal to pay overtime to groups of employees who entered mandatory arbitration agreements, according to an attorney representing Harris.
Jason Knutson, a shareholder in Habush Habush & Rottier, says Epic could choose to appeal this first ruling, but there is no guarantee that an appellate court would agree to hear the case.
“Appeals for arbitration are fairly unusual because the arbitrator has to basically make a very egregious error for an appellate court to look at it,” Knutson states. “The courts of appeal tend to not want to get involved in arbitration.”
By signing mandatory arbitration agreements, the employees are effectively barred from filing class-actions lawsuits and must try to resolve pay disputes in private arbitration, which was backed up by a prior U.S. Supreme Court decision.
Harris is the first individual in a large group of Epic employees with ongoing overtime claims who took the firm to arbitration and won. The arbitrator issued an award that ordered Epic to pay an undisclosed amount of overtime wages Harris had earned, along with additional liquidated damages. These are not punitive damages per se, but they are enhanced damages.
Epic had argued that it did not have to pay Harris overtime because she was a “computer professional” or “administrative professional,” which are terms used in employment regulations. The arbitrator disagreed and ruled that neither of those exemptions applied to Harris, and therefore Epic was legally required to pay Harris the overtime pay.
On the Harris arbitration, Epic declined to comment at length but released the following statement: “We believe that this decision was simply wrong on the facts of this case. Epic hires smart, capable people and compensates them well to do the challenging work of improving health care around the world.
“We stand behind the quality and complexity of the work our staff does and will continue to do the things that make Epic one of Madison’s Best Places to Work.”
Harris was represented by Knutson and by attorney Caitlin Madden of Hawks Quindel. According to Harris’ legal team, an estimated 300 technical writers and up to 2,000 quality-assurance employees could have individual arbitration cases for unpaid overtime work, and that’s not all. “What’s interesting is that if Epic never changes this pay practice, and the laws never change, theoretically these cases could just go on forever because every new employee has an overtime claim,” Knutson states.
Knutson says one way to solve the problem “is to take these two groups of employees and pay them overtime when they work overtime.” From a business standpoint, he says another solution would be to just hire some more employees [in the areas of technical writing and quality assurance] so that none of them have to work overtime, but that might be easier said than done in an era of workforce shortages.
Knutson also notes that two opposite outcomes are possible — either the Harris case has set a precedent, or different arbitrators could view these cases differently and apply the law differently in other cases. “Arbitrators are made aware of other arbitration decisions, so in that way, we would expect that different arbitrators would try to be consistent,” he states. “The law is supposed to be the same, regardless. The facts might be a little different based on each claimant but theoretically, an arbitrator could rule differently, just like a judge could rule differently than another judge.”
Pay now or pay more later?
According to Knutson, unless the practice of forced arbitration is banned, or unless employers voluntarily stop the practice on their own accord, law firms will take these cases to arbitration on an individual basis. He notes that some large businesses have stopped forcing arbitration provisions on employees.
“We’ve seen lots of large companies adopt these arbitration clauses and force employees into arbitration,” he says. “I assume the goal was to avoid litigation, but it looks like lawyers all around the country, including us, are just going to bring these individual arbitrations instead of dropping these valid claims. So, businesses will have to think about what makes the most sense for them. Is it to potentially have unhappy employees who don’t want to be in arbitration and face hundreds of thousands of these individual claims? Or is it better to not push an arbitration agreement and let these cases happen as one class action, where you can get them resolved all at once?
“Or better yet, just change your pay practice so you’re not facing litigation at all.”
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