Last year in its Concepcion decision, the U.S. Supreme Court upheld the validity of waivers of class action rights contained in a commercial mandatory arbitration agreement. Earlier this month, the Fourth Circuit Court of Appeals (which includes North Carolina and South Carolina) used Concepcion to reject similar challenges to a collective action waiver in a FLSA wage claim.
Muriithi v. Shuttle Express involved a claim by airport shuttle service drivers that they had been misclassified as contractors, and were entitled to overtime pay under the FLSA. The defendant moved to compel mandatory arbitration based on an agreement signed with the drivers. Among other reasons, the plaintiffs sought to invalidate the arbitration agreement based on its prohibition of class or collective arbitrations. The Fourth Circuit disagreed, reversing the district court and remanding the case for arbitration.
The plaintiff attempted to limit Concepcion to the California law at issue in that case. The court disagreed, finding broader application of that case, declaring that state law unconscionability defenses cannot be used to invalidate class or collective action waiver provisions in arbitration agreements.
The Fourth Circuit also rejected the plaintiff's claims that fee splitting and limitations period in the arbitration agreement rendered it invalid. The plaintiff in this case did not raise an argument that the collective action waiver violated NLRA rights to concerted employee activity. That issue is the subject of litigation in other appellate circuits and will likely be addressed by the Fourth Circuit in the near future.