It’s the moment you dread: A document marked LAWSUIT arrives at your desk. An employee has sued the company in court claiming sexual harassment or maybe failure to pay overtime wages. The lawsuit even includes threats of class action.

The U.S. Supreme Court has now issued a business-friendly ruling that gives employers the freedom to work out problems privately. It ruled that companies may include in their employment contracts provisions that limit aggressive and costly lawsuits—including class action lawsuits.

Savvy companies, including big-time accounting firm Ernst & Young, use simple arbitration agreements in their employment contracts. These arbitration agreements prohibit employees from banding together and running to court to assert federal labor law violations. Rather, the agreements require that employees—current and former—engage in a private, low-cost arbitration process on an individual basis.