Eleventh Circuit Decides Arbitration Agreements Barring Class Actions Are Enforceable For FLSA Claims

In Walthour v. Chipio Windshield Repair, LLC, No. 13-11309 (Mar. 21, 2014), the Eleventh Circuit held that an arbitration agreement, which waives an employee’s ability to bring a collective action under the Fair Labor Standards Act (“FLSA”), is enforceable under the Federal Arbitration Act (“FAA”). A group of plaintiff employees were trying to bring a class action against their employer under FLSA §16(b), alleging they had been paid less than minimum wage and were not paid for overtime. The employees signed an arbitration agreement, which stated that all disputes would be arbitrated and that they had to pursue their claims individually, so the employer asked the court to uphold the arbitration agreement.

The Court considered whether the FLSA has a “contrary congressional command” that could override the terms of the arbitration agreement. The plaintiffs had the burden to show that Congress intended to preclude a collective action waiver in an arbitration agreement based on the legislative history of the FLSA. In following the Supreme Court’s decision in CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (2012), the Eleventh Circuit noted that when Congress had previously prohibited arbitration clauses, it had done so with clarity, and that courts should focus primarily on the statutory text of the FLSA to determine whether there was a sufficient contrary congressional command.

FLSA §16(b) provides that an employee may bring an action for FLSA violations on behalf of himself and other employees similarly situated. In Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (2011), the Supreme Court held that compelling arbitration was consistent with the Age Discrimination Employment Act, which expressly adopted the collective action language from FLSA §16(b). See 29 U.S.C. §626(b).

Based on Gilmer and the FLSA’s text and legislative history, the Eleventh Circuit found no contrary congressional command that precluded the enforcement of an arbitration agreement for claims under the FLSA. The FLSA had no explicit provision precluding arbitration or making the right to a collective action a non-waivable “right,” and  its legislative history did not show that Congress intended collective action to be essential to the vindication of rights under the FLSA. The district court’s order compelling arbitration and dismissing the plaintiffs’ complaint was thus affirmed.

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