With the policy behind arbitration embodied in the Federal Arbitration Act (FAA) reinforced by a series of Supreme Court decisions (Stolt-Nielsen (2010); Concepcion (2011) and Greenwood (2012)), employers continue to implement mandatory arbitration programs under the FAA. Among the many reasons to consider implementation of such a program is the utility of a class/collective action waiver provision. Such a provision can be used to compel arbitration of individual claims should an employee who signed such an agreement seek to bring class and collective action wage claims in court or the arbitral forum. Another New York federal judge now has joined “the vast majority of courts in holding that the right to proceed collectively under the FLSA can be waived in an arbitration agreement.” Dixon v. NBCUniversal Media, LLC, 2013 U.S. Dist. LEXIS 75313 (S.D.N.Y. May 28, 2013).
In Dixon, plaintiff asserted claims for overtime pay and sought to pursue a collective action under the FLSA, with notice to other similarly situated employees. However, she was a participant in Oxygen’s "Solutions" arbitration program, which required individualized arbitration of all her claims. The Court ruled that Dixon had agreed to arbitration on those terms.
Employee plaintiffs who are signatories to arbitration agreements, continue to mount a variety of challenges to their validity and enforceability. Employers seeking to craft arbitration agreements with the greatest likelihood of enforcement in a court proceeding (such as a wage lawsuit) must work with counsel to craft an appropriate arbitration agreement and/or program for the jurisdictions in which they operate.