Employer Narrows “Collective” Actions Thru Arbitration Agreement.

By: Beth Ann Lennon

Last term, in Epic the Supreme Court ruled the National Labor Relations Act (“NLRA”) is not a “get out of arbitration free” card. Individual employees who sign an appropriate arbitration agreement can be compelled to arbitrate even their “concerted” claims.

Now, according to the Sixth Circuit, that ruling also tells us employees cannot avoid arbitration when they bring collective claims under the Fair Labor Standards Act (“FLSA”). While acknowledging that the FLSA “gives employees the option to bring their claims” as a “collective” action, the court explained, nothing in the FLSA requires collective action. Without a “clear and manifest” statement of congressional intent to the contrary, the Federal Arbitration Act (“FAA”) applies and an employee can sign away the right to proceed collectively. Indeed, the Sixth Circuit reiterated that, under Epic, the “fundamental attributes of arbitration” cannot be attacked, and it explained that one “fundamental attribute” is its “historically individualize nature.” Gaffers v. Kelly Services, Inc.

The takeaway? There is nothing illegal about an employee contracting away his or her “collective action” rights under the FLSA. “Employees who do not sign individual arbitration agreements are free to sue collectively [under the FLSA], and those who do sign individual arbitration agreements are not.”