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The United States Court of Appeals for the Eleventh Circuit became the latest federal appellate court to enforce an arbitration agreement with a class action waiver in a collective action under the Fair Labor Standards Act. In Walthour v. Chipio Windshield Repair, LLC, the court affirmed the district court’s order granting the employers’ motion to compel plaintiffs to arbitrate their FLSA claims on an individual basis.
The arbitration agreements at issue stated the employees could only bring claims in an “individual capacity” and not as a “plaintiff or class member in any purported class or representative proceeding.” Despite this clear class-waiver provision, the plaintiffs brought a putative collective action against defendants alleging minimum wage and overtime claims under the FLSA. They argued the class waiver was unenforceable because the right to a collective action under the FLSA could not be waived because the FLSA’s express statutory language, legislative history, and purpose override the Federal Arbitration Act (FAA).
The court acknowledged that the FAA’s requirement that arbitration agreements be enforced according to their terms may be overridden by a “contrary congressional command,” but found no such congressional command in the FLSA. The court held that there is no explicit language in the FLSA that precludes waiver of the right to a collective action. In addition, the court stated, the FLSA’s legislative history only supports a general congressional intent to “aid employees who lacked sufficient bargaining power to secure for themselves a ‘minimum subsistence wage.’” This, the court held, was insufficient to establish the “requisite contrary congressional command sufficient to override the FAA.”
With this decision, the Eleventh Circuit joins all the other federal appellate courts that have addressed the issue, concluding that arbitration agreements with class action waivers are enforceable in FLSA collective actions: Raniere v. Citigroup Inc. (2nd Cir.); Muriithi v. Shuttle Express, Inc. (4th Cir.); Carter v. Countrywide Credit Indust., Inc. (5th Cir.); and Owen v. Bristol Care, Inc. (8th Cir.). Together, these federal appellate decisions are a significant victory for employers seeking to enforce arbitration agreements with class action waivers. They reinforce the FAA’s mandate and Supreme Court precedent requiring courts to enforce arbitration agreements in accordance with their terms, including terms requiring employees to arbitrate claims against their employer on an individual, rather than class, basis.