In two closely watched cases, the Second Circuit has ruled that the Fair Labor Standards Act (“FLSA”) does not preclude the waiver of class action claims (known technically as “collective actions” under the FLSA). In decisions issued on August 9th and 12th, the Second Circuit reversed lower court rulings that had refused to enforce individual arbitration agreements signed by the plaintiffs.  Instead, the appeals court sent the cases back to the district courts with instructions to compel the plaintiffs to honor their agreements with their employers and to submit their FLSA overtime disputes to separate, individual arbitration proceedings.

Following the Supreme Court’s recent decision in American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013), the Second Circuit in Sutherland v. Ernst & Young, case no. 12-cv-304, rejected the plaintiff’s arguments that the FLSA contained a “contrary congressional command” barring waivers of class arbitration, and, further, that the plaintiff could not “effectively vindicate” her rights in an individual arbitration, inasmuch as such a proceeding would be “prohibitively expensive.”  In Raniere et al. v. Citigroup Inc. et al., case no. 11-cv-5213, the Second Circuit issued the same decision on the same basis.
Continue Reading Individual Arbitration Agreements Held to Preclude Class Actions under FLSA