Judge Vincent Briccetti of the U.S. District Court in White Plains, New York, recently dismissed a purported collective action filed by Tiffany Ryan, a former assistant branch manager at JPMorgan Chase. Ryan sued Chase in June 2012 claiming that she was misclassified as an exempt employee and denied overtime pay in violation of the Fair Labor Standards Act. The Court ruled that the binding arbitration agreement that Ryan had signed, which included a waiver of class or collective actions, required her to submit her claims to arbitration.
Ryan argued that the Court must defer to the National Labor Relations Board’s decision In re D.R. Horton. In that case, the NLRB held that waivers of class, collective, or joint actions in employment contracts violate the National Labor Relations Act. Accordingly, Ryan argued that the agreement between Chase and Ryan was unenforceable because of the collective action waiver. The Court disagreed, finding that the D.R. Horton decision and the NLRA were both non-persuasive and non-binding. Citing the Supreme Court’s 2011 decision AT&T Mobility LLC v. Concepcion, and subsequent lower-court rulings based upon that decision, the Court held that the collective action waiver contained in Ryan’s arbitration agreement was valid and enforceable.
“At bottom, the Court finds the class waiver is fair, permits [Ryan] to vindicate her statutory rights under the FLSA, does not hinder her ability to recover attorney’s fees or costs, and comports with public policy favoring arbitration and honoring private contracts,” Judge Briccetti wrote.
The Court’s decision represents an important and much sought after expansion of the Supreme Court’s ruling in Concepcion, which held that companies can employ class action waivers in consumer contracts. In the two years since the Concepcion decision, employers have sought to apply the Supreme Court’s reasoning to analogous class action waivers in employment contracts. Thus, the decision is likely to be cited frequently by employers in defending against class and collective actions in support of similar arbitration agreements.