Class Action Waivers, Class Actions

Class Arbitration Waivers Validated by the Eleventh Circuit in FLSA Actions

The Eleventh Circuit in Walthour v. Chipio Windshield Repair, LLC, No. 13-11309 (11th Cir. March 21, 2014) recently joined the Second, Fourth, Fifth, and Eighth Circuits in upholding class arbitration waivers in a Fair Labor Standards Act (“FLSA”) action.  Plaintiffs in Walthour argued that the statutory right to file a collective action under the FLSA cannot be waived, as it is a substantive right.  Plaintiffs pointed to the statute’s text, legislative history and purposes to support their position that the FLSA’s right to collective action trumps the Federal Arbitration Act’s (“FAA”) validation of class and collective action waivers.  Plaintiffs had relied, in part, on an old U.S. Supreme Court case, Brooklyn Savings Bank v. O’Neil, 324 U.S. 697, 65 S. Ct. 895, (1945), in which the Supreme Court “held that a plaintiff cannot waive her right to liquidated damages in a FLSA settlement when there is no genuine dispute about whether she is entitled to them.”  However, the Eleventh Circuit distinguished O’Neil by explaining “[t]hat case addressed the waiver of a substantive right, i.e., the individual employee’s right to recover liquidated damages for violations of the FLSA. In this case, we address only the waiver of a litigation mechanism, i.e., the right to bring a collective action on behalf of others.”  Relying on recent U.S. Supreme Court precedent, including Am. Express Co. v. Italian Colors Rest., 570 U.S. ___, ___, 133 S. Ct. 2304 (2013), AT&T Mobility LLC v. Concepcion, 563 U.S. ___, ___, 131 S. Ct. 1740 (2011), and CompuCredit Corp. v. Greenwood, 565 U.S. ___, ___, 132 S. Ct. 665 (2012), the Eleventh Circuit concluded that “[a]fter examining the FLSA’s text, legislative history, purposes, and these Supreme Court decisions, we discern no ‘contrary congressional command’ that precludes the enforcement of plaintiffs’ Arbitration Agreements and their collective action waivers.”

In drawing its conclusion, the Eleventh Circuit noted that “all of the circuits to address this issue have concluded that § 16(b) [of the FLSA] does not provide for a non-waivable, substantive right to bring a collective action.”  The Court summarized the other Circuit Court holdings as follows:

  • Sutherland v. Ernst & Young LLP, 726 F.3d 290, 296-97 & n.6 (2d Cir. 2013) (determining that the FLSA does not contain a “contrary congressional command” that prevents an employee from waiving his or her ability to proceed collectively and that the FLSA collective action right is a waivable procedural mechanism);
  • Owen v. Bristol Care, Inc., 1050, 1052-53 (8th Cir. 2013) (determining that the FLSA did not set forth a “contrary congressional command” showing “that a right to engage in class actions overrides the mandate of the FAA in favor of arbitration”);
  • Carter v. Countrywide Credit Indus., Inc., 362 F.3d 294, 298 (5th Cir. 2004) (rejecting the plaintiffs’ claim that their inability to proceed collectively deprived them of a substantive right to proceed under the FLSA because, in Gilmer, the Supreme Court rejected similar arguments regarding the ADEA);
  • Adkins v. Labor Ready, Inc., 303 F.3d 496, 503 (4th Cir. 2002) (determining that a plaintiff failed to point to any “suggestion in the text, legislative history, or purpose of the FLSA that Congress intended to confer a non-waivable right to a class action under that statute” and that the plaintiff’s “inability to bring a class action, therefore, cannot by itself suffice to defeat the strong congressional preference for an arbitral forum”);
  • cf.  D.R. Horton, Inc. v. NLRB, 737 F.3d 344, 362 (5th Cir. 2013) (determining that the National Labor Relations Act does not contain a contrary congressional command overriding the application of the FAA).
Tony Lathrop

About Tony Lathrop

Tony Lathrop brings experience and a high level of analytical ability, professional credibility and creativity to handling litigation matters. He rigorously represents his clients' interests in a diverse range of claims and actions. A certified mediator, Mr. Lathrop has extensive experience representing business clients in mediation. His service to the legal profession in North Carolina has allowed him to develop relationships across the state that benefit the firm's clients.

Discussion

No comments yet.

Leave a comment

Your email address will not be published. Required fields are marked *

Spam Protection by WP-SpamFree

Welcome to the MVA Litigation Blog!

In an increasingly globalized and regulated business environment, companies are faced with ever-changing and complicated litigation and regulatory challenges. The Moore & Van Allen Litigation Blog provides cutting-edge information regarding developments in federal, North Carolina State, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices.

Connect to Recent Authors

  • Tony Lathrop:  View Tony Lathrop's Bio View Tony Lathrop's LinkedIn profileFollow @TonyLathropLaw on Twitter

  • Subscribe to Blog Via Email

    Follow MVA

    Facebooktwitterlinkedinrss

    Blog Topics

    Archives


    Our Litigation Practice

    Headquartered in the banking and energy hub of Charlotte, North Carolina, Moore & Van Allen has assembled a team of litigators with the intellectual acuity, knowledge of complex commercial transactions, and breadth of experience necessary to successfully serve our clients in all aspects of sophisticated business litigation and white collar criminal defense.

    Guided by trial lawyers with years of substantial state, federal, and international experience, our team addresses the diverse challenges facing our clients, ranging from general commercial litigation and matters involving employment, antitrust, trust & estate, securities or corporate governance issues, to class actions, regulatory enforcement proceedings, and government & internal investigations.

    We represent large Fortune 500® corporations, as well as start-ups, in banking, securities, healthcare, manufacturing, construction, energy, and other industries. We work closely with our clients to develop strategies to meet their business needs, whether that includes taking a case to trial or appeal, arbitrating a case or finding an alternative means of resolution. Read More About Our Practice and Meet the MVA Litigation Team.

    Disclaimer

    No Attorney-Client Relationship Created by Use of this Website: Neither your receipt of information from this website, nor your use of this website to contact Moore & Van Allen or one of its attorneys creates an attorney-client relationship between you and Moore & Van Allen. As a matter of policy, Moore & Van Allen does not accept a new client without first investigating for possible conflicts of interests and obtaining a signed engagement letter. (Moore & Van Allen may, for example, already represent another party involved in your matter.) Accordingly, you should not use this website to provide confidential information about a legal matter of yours to Moore & Van Allen.


    No Legal Advice Intended: This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems. (Read All)