On March 21, the 11th Circuit joined the 2nd, 4th, 5th and 8th Circuits in enforcing class action waivers in arbitration agreements when claims are made under the FLSA. In Walthour v. Chipio Windshield Repair, LLC, the arbitration agreement in question stated that the employees could bring claims only in an “individual capacity”, and not as a ‘plaintiff or class member in any purported class or representative proceeding.” Pursuant to the FLSA, the Walthour plaintiffs filed a collective action in federal court alleging minimum wage and overtime violations. Chipio and the other defendants filed a motion to compel arbitration. In affirming the trial courts’ order compelling arbitration, the 11th Circuit held that the Federal Arbitration Act “embodies a liberal federal policy favoring arbitration agreements” and seeks “to relieve congestion in the courts and to provide parties with an alternative method for dispute resolution that is speedier and less costly than litigation.” In a detailed opinion, the Court found that the FLSA did not prohibit such a waiver, there was no Congressional intent to prohibit such waivers, and various Supreme Court decisions that would preclude the enforcement of the class action waiver.
Practice pointer. Employers who have arbitration agreements with their employees may want to examine their agreements to determine if there is class action waiver language, and if such language is not present, whether or not they want to add it. Due to the complex nature of arbitration agreements and waivers of class actions, employers should consult their legal counsel to insure that the agreements are enforceable.