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Arbitration | Overtime Law Blog | FLSA Decisions

Overtime Law Blog | FLSA Decisions

Category Archives: Arbitration
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N.D.Ala.: Arbitration Agreements Obtained From Current Employees After Putative Collective Commenced Might Be Unenforceable
Billingsley v. Citi Trends, Inc. This case was before the court on the plaintiffs motion for conditional certification as well as the plaintiffs motion for corrective action regarding meetings the defendant acknowledged having with putative class members after learning of the lawsuit. The court had previously denied the plaintiffs motion to strike declarations obtained from such putative class members, but deferred on the motion for corrective action. As discussed here, after the plaintiffs had commenced their putative collective action, but prior to the time they filed their motion for conditional certification, the defendant required putative class members to attend meetings with its management where it had putative class members sign blank declarations and a mandatory arbitration agreement. The court held that the documents may not be enforceable, and that class members who felt they signed same under duress would not be bound by the documents they previously signed. Discussing the issue the court explained: The court deferred ruling on the plaintiffs request for a corrective letter or court supervised notice that was embedded in the motion to strike. (Doc. 51, at 1011). After the parties May 31, 2012 Status Conference and before the Plaintiffs deadline for filing their Motion for Conditional Certification and Notice, Citi Trends initiated company-wide in-person meetings between two corporate representatives and its SMs, who are potential collective class members in this case. At these meetings, with only a few exceptions, every SM completed a fillin-the-blank declaration about their job duties (doc. 407 and following) and signed an arbitration agreement that bound every SMs to arbitrate any claims he or she had against Citi Trends (doc. 476). The Human Resources Representative also presented every SM with a disclosure about this lawsuit and the effect of the arbitration agreement on his or her rights in the lawsuit. (Doc. 472). As the court expressed in its memorandum opinion on the motion to strike, the individualized meetings that occurred between SMs and Citi Trends Human Resources Representatives are cause for concern. At these meetings, SMs waived their rights to bring any claims against Citi Trends in court, including participation in this litigation. Especially when the employer-employee relationship is in play, the possibility of abuse is ripe in these type of unilateral communications. The Eleventh Circuit recognized the potential for coercion in such situations and held that the court had authority in Rule 23 class actions to invalidate opt-outs when they were procured through fraud, duress, or other improper conduct. Kleiner v. First Nat. Bank of Atl., 751 F.2d 1193, 1212 (11th Cir.1985). In cases such as this where Citi Trends has an obvious interest in diminishing the size of the potential class, a risk exists that these types of unsupervised communications will sabotage the employees independent decision-making regarding their involvement in the action. See id. at 1206. The court takes seriously its responsibility to see that an employer not engage in coercion or duress to decrease the size of a collective class and defeat the purpose of the collective action mechanism of the FLSA. Because of these concerns as more fully stated on the record, the court will GRANT IN PART AND DENY IN PART the Plaintiffs motion for courtsupervised notice. Any potential plaintiffs who felt they signed the mandatory arbitration agreement under duress will still be allowed to opt-in to this collective action; the language of the notice will reflect that right. Click Billingsley v. Citi Trends, Inc. to read the entire Memorandum Opinion and Order discussed here, and Memorandum Opinion to read the courts prior Memorandum Opinion on the Motion to Strike.
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8th Cir.: NLRBs Holding in D.R. Horton Does Not Preclude Enforcement of FLSA Class/Collective Action Waiver
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Owen v. Bristol Care, Inc. While district courts that have considered the issue since the NLRB handed down its decision in D.R. Horton last year have reached divergent opinions on its effect regarding the enforceability of class waivers, the first circuit to consider the issue has rejected D.R. Hortons applicability in the FLSA context. By way of background, last year the NLRB held that the existence of a collective action waiver in an employment agreement constituted an unfair labor practice, because it improperly restricted the concerted activity of employees who are subject to same. Following the decision, courts have reached different conclusions as to whether the NLRBs decision necessarily rendered such waivers unenforceable in the context of FLSA collective action waivers. In this case, the district court held that the parties arbitration agreement was unenforceable, because it contained such a waiver. However, on appeal, the Eight Circuit reversed, holding that the NLRBs decision in D.R. Horton did not render the arbitration agreement at issue unenforceable. Discussing this issue, the Eight Circuit opined that it was not obligated to defer to the National Labor Relations Boards interpretation of Supreme Court precedent, under Chevron or any other principle: Finally, in arguing that there is an inherent conflict between the FLSA and the FAA, Owen relies on the NLRBs recent decision in D.R. Horton, which held a class waiver unenforceable in a similar FLSA challenge based on the NLRBs conclusion that such a waiver conflicted with the rights protected by Section 7 of the NLRA. 2012 WL 36274, at *2. The NLRB stated that Section 7s protections of employees right to pursue workplace grievances through concerted action includes the right to proceed as a class. Id. However, D.R. Horton carries little persuasive authority in the circumstances presented here. First, the NLRB limited its holding to arbitration agreements barring all protected concerted action. Id. at *16. In contrast, the MAA does not preclude an employee from filing a complaint with an administrative agency such as the Department of Labor (which has jurisdiction over FLSA claims, see 29 U.S.C. 204), the Equal Employment Opportunity Commission, the NLRB, or any similar administrative body. Cf. Gilmer, 500 U.S. at 28, 111 S.Ct. 1647 (upholding an arbitration agreement that allowed Age Discrimination in Employment Act claimants to pursue their claims before the Equal Employment Opportunity Commission). Further, nothing in the MAA precludes any of these agencies from investigating and, if necessary, filing suit on behalf of a class of employees. Second, even if D.R. Horton addressed the more limited type of class waiver present here, we still would owe no deference to its reasoning. Delock v. Securitas Sec. Servs. USA, F.Supp.2d , , No. 4:11CV520DPM, 2012 WL 3150391 (E.D.Ark. Aug. 1, 2012), at *3 (The Boards construction of the [NLRA] is entitled to considerable deference and must be upheld if it is reasonable and consistent with the policies of the Act, the Board has no special competence or experience in interpreting the Federal Arbitration Act. (quoting St. Johns Mercy Health Sys. v. NLRB, 436 F.3d 843, 846 (8th Cir.2006))). The NLRB also attempted to distinguish its conclusion from pro-arbitration Supreme Court decisions such as Concepcion. D.R. Horton, 2012 WL 36274, at *16. This court, however, is not obligated to defer to [the Board's] interpretation of Supreme Court precedent under Chevron or any other principle. Delock, F.Supp.2d at , 2012 WL 3150391, at *3 (quoting N.Y. N.Y. LLC v. NLRB, 313 F.3d 585, 590 (D.C.Cir.2002)). Additionally, although no court of appeals has addressed D.R. Horton, nearly all of the district courts to consider the decision have declined to follow it. The court also opined that there is nothing inherently wrong with a collective action waiver in employment agreements. Click Owen v. Bristol Care, Inc. to read the entire Opinion.
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Recent Conditional Certification Decisions of Interest

Anyone who has ever moved for or opposed a motion for conditional certification (i.e. a Stage 1 motion) of a collective action is likely familiar with the common defense tactic whereby a defendant asserts that the named plaintiff and members of the putative class are not similarly situated. Typically a defendant argues that individualized issues pertaining to the claims of the named plaintiff(s) (and members within the putative class) render the case ill-suited for class/collective treatment. As discussed below, three recent decisions discuss three separate issues related to this analysis. In the first, a court held that a pro se plaintiff could not adequately serve the interests of the putative class and denied conditional certification. However, in the second and third cases discussed below, the courts rejected the defendants contentions that: (1) an undocumented (illegal) immigrant was ill-suited to serve as a representative plaintiff; and (2) issues regarding whether specific putative class members signed binding arbitration agreements relating to the issues raised by the named-plaintiff were not properly raised at stage 1. Pro Se Plaintiff Inadequate Representative for Collective Action
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Koch v. CHS Inc. In the first case, the pro se plaintiff (apparently fairly savvy) moved for conditional certification. Denying the motion, the court held that a pro se plaintiff cannot pursue their claims in a collective action for lack of adequacy of representation. Specifically, the court explained:
The issue of whether a pro se plaintiff can sue on behalf of other m em bers in a collectiv e action is one of adequacy of representation. Determ ining adequate representation is ty pically based on a two-part inquiry : First, the nam ed representativ es m ust appear able to prosecute the action v igorously through qualified counsel, and second, the representativ es m ust not hav e antagonistic or conflicting interests with the unnam ed m em bers of the class. Lerwill v . Inflight Motion Pictures, Inc., 582 F.2 d 507 , 51 2 (9 th Cir.1 9 7 8). Courts hav e generally concluded that a pro se plaintiff cannot pursue claim s on behalf of others in a representativ e capacity . See Sim on v . Hartford Life, Inc., 54 6 F.3 d 6 6 1 , 6 6 4 (9 th Cir.2 008); see also Johns v . County of San Diego, 1 1 4 F.3 d 87 4 , 87 6 (9 th Cir.1 9 9 7 ) (While a non-attorney m ay appear pro se on his ow n behalf, he has no authority to appear as an attorney for others than him self.); C.E. Pope Equity Trust v . United States, 81 8 F.2 d 6 9 6 , 6 9 7 (9 th Cir.1 9 87 ) (holding that a pro se litigant m ay not appear as an attorney for others). Here, because Koch is a pro se litigant, he cannot pursue claim s on behalf of other CHS em ploy ees in a representativ e capacity . The rule holds true for pro se plaintiffs seeking to bring collectiv e action suits under the F LSA. Morgov sky v . AdBrite, Inc. ., No. C1 0051 4 3 SBA, 2 01 2 WL 1 59 51 05 *4 (N.D.Cal. May 4 , 2 01 2 ) (deny ing pro se plaintiffs m otion to bring a collectiv e action under the FLSA and dism issing collectiv e action claim s); Spiv ey v . Sprint/United Mgt. Co., No. 04 2 2 85JWL, 2 004 WL 3 04 884 0 (D.Kan. Dec.3 0, 2 004 ) (holding that a claim under 2 9 U.S.C. 2 1 6 (b) cannot be brought by a pro se plaintiff). Accordingly , the Court agrees with CHS that Koch, because he proceeds in the litigation pro se, cannot represent the class m em bers on whose behalf he purports to bring suit. Therefore, proceeding with the litigation as a collectiv e action is not perm itted pursuant to 2 9 U.S.C. 2 1 6 (b). The m otion will be denied.

Click Koch v. CHS Inc. to read the entire Memorandum Decision and Order. Named-Plaintiffs Immigration Status Has No Bearing on Similarly Situated Analysis Torres v. Cache Cache, Ltd. In the second case of interest, arising from alleged tip pool violations at defendants restaurant, the defendant opposed conditional certification, in part, based on the fact that the named-plaintiff was allegedly an undocumented immigrant. The court rejected this notion, citing well-established authority that an FLSA plaintiffs immigration status is irrelevant to a claim inasmuch thereunder, inasmuch as same seeks payment for work already performed. Discussing this issue the court reasoned: Finally, in an apparent attempt to distinguish Plaintiff from other proposed collective action members, Defendants note his status as an illegal immigrant and involvement in other similar FLSA lawsuits. Neither of these issues, however, is likely to provide Defendants with a valid defense that is unique to Plaintiff. First, there are a number of cases finding that evidence of immigration status has no relevance in an FLSA action. See e.g. Reyes v. Snowcap Creamery, Inc., 2012 WL 4888476 at *2 (D.Colo. Oct.15, 2012) (recognizing that weight of authority clearly holds that a plaintiffs immigration status is irrelevant in an FLSA action and citing supporting authority). It is also questionable whether Defendants will be able to introduce evidence of other lawsuits involving Plaintiff. See Van Deelen v. Johnson, 2008 WL 4683022 at *2 (D.Kan. Oct.22, 2008) (evidence of plaintiffs prior lawsuits cannot be admitted for purpose of proving that plaintiff is litigious but may be admissible for other purposes). Click Torres v. Cache Cache, Ltd. to read the entire Order. Whether Putative Class Members Claims Are Subject to Arbitration is an Issue Reserved for Stage 2 Hernandez v. Immortal Rise, Inc. In the final decision, the court had before it the Report and Recommendation of the magistrate judge recommending conditional certification. As it had in its opposition to the underlying motion, the defendant argued that members of the putative class who had previously signed agreements to arbitrate their FLSA claims, were not similarly situated to the plaintiff and the remainder of the putative class. As such, the defendant argued such putative class members should be excluded from receiving notice of their right to join the case by opting in. Rejecting this contention, the court held that the issue of whether (and who) may have signed arbitration agreements, is an issue reserved for Stage 2 (decertification) analysis, and is not properly addressed at the conditional certification stage: Next, defendants argue that the proposed class should be limited to cashiers and those who had not signed arbitration agreements, excluding grocery packers and delivery workers, whom defendants never employed, and employees subject to
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arbitration agreements. However, these are issues of fact that should be determined during discovery rather than at this preliminary stage. See DAntuono v. C & G of Groton, Inc., No. 11cv33, 2011 U.S. Dist. LEXIS 135402, at *1213 (D.Conn. Nov. 23, 2011) (holding that the enforceability of arbitration agreements should not be determined during conditional class certification); Lujan v. Cabana Mgmt., No. 10cv755, 2011 U.S. Dist. LEXIS 9542, at *2324, 2011 WL 317984 (E.D.N.Y. Feb. 1, 2011) (quoting Realite v. Ark Rests. Corp., 7 F.Supp.2d 303, 307 (S.D.N.Y.1998)) (holding that defendants contention that its restaurants constituted separate entities raised a contested issue of fact, and was therefore not a basis for denying conditional class certification). Thus, Judge Bloom correctly found that the proposed class should not be limited as defendants propose. Click Hernandez v. Immortal Rise, Inc. to read the entire Order.
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D.N.J.: District Court Denies Motion to Vacate Clause Construction Permitting Arb to Proceed on Class Basis, Where Contract Was Silent as to Class Issues; U.S.S.C. to Take Up Issue
Opalinski v. Robert Half Intern., Inc. Another court, this one within the Third Circuit (which had previously ruled on the issue), has held that an arbitrator does not exceed his or her authority when the arbitrator permits FLSA claims to proceed on a class-wide basis, in the face of an arbitration agreement that the parties stipulate is silent as to class issues. Determining that same was permissible under StoltNielsen and under principles of New Jersey contract law, the court explained: At issue here is whether the Award should be vacated because the Arbitrator exceeded her powers by finding that the Agreements allow for class arbitration. Defendants contend that the Arbitrators finding was erroneous and violates Supreme Court precedent. See StoltNielsen v. AnimalFeeds Intl Corp., U.S. , 130 S.Ct. 1758, 176 L.Ed.2d 605 (2010) (finding that arbitration panel exceeded its powers by imposing its own policy choice instead of interpreting and applying the agreement of the parties, and explaining that a party cannot be compelled to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so). Defendants note that the Agreements did not expressly authorize class arbitration and argue that an agreement to arbitrate does not implicitly authorize class arbitration, nor does the non-existence of an express class action waiver imply that the parties agreed upon class arbitration. Defendants arguments are unpersuasive particularly given the binding precedent of Sutter v. Oxford Health Plans LLC, 675 F.3d 215 (3d Cir.2012), which is directly on point. In light of StoltNielsen, the Third Circuit Court of Appeals in Sutter evaluated an arbitrators decision that class arbitration was allowed under a contract that was silent on the issue of class arbitration. The court explained that while StoltNielsen does prohibit an arbitrator from inferring parties consent to class arbitration solely from their failure to preclude that procedure, it did not establish a rule that class arbitration is only allowed where an arbitration agreement expressly provides for class arbitration procedures. Sutter, 675 F.3d at 222, 224 . Instead, an arbitrator can interpret an arbitration clause to allow for class arbitration, even if the clause does not expressly provide for it, if the arbitrator articulates a contractual basis for that interpretation. Id. at 224. The arbitrator in Sutter examined the parties intent and used contract interpretation principles to reach his conclusion. He described the text of the arbitration clausewhich provided that no civil action concerning any dispute arising under this [a]greement shall be instituted before any courtas broad and embracing all conceivable court actions including class actions. He further explained that an express carve-out for class arbitration would be required to negate this reading of the clause. Id. at 218. When reviewing the award, the court explained that the arbitrator had the authority to find for class arbitration because such a finding had a contractual basis. Id. at 22324. In light of binding Third Circuit authority and basic principles of New Jersey law regarding contract interpretation, the court held that the arbitrator was within her powers to hold that the arbitration of plaintiffs claims could proceed on a class-wide basis, in the absence of an explicit class-waiver in the arbitration agreement. Click Opalinski v. Robert Half Intern., Inc. to read the entire Opinion & Order.

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Significantly, within days of the Opalinkski decision, the Supreme Court agreed to take up this very issue. To that end, the Supreme Court accepted cert of the Sutter case, on which the Opalinski relied. The question certified by the Supreme Court is: Whether an arbitrator acts within his powers under the Federal Arbitration Act (as the Second and Third Circuits have held) or exceeds those powers (as the Fifth Circuit has held) by determining that parties affirmatively agreed to authorize class arbitration, Stolt-Nielsen, 130 S. Ct. at 1776, based solely on their use of broad contractual language precluding litigation and requiring arbitration of any dispute arising under their contract. Click Oxford Health Plans LLC v. Sutter to read more about the Supreme Courts decision to accept cert.
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Respondent-Employer Enjoined From Requiring Current Employee Putative Class Members From Waiving Right to Participate in Class/Collective Action, Once Putative Class/Collective Action Pending
Herrington v. Waterstone Mortgage Corp. In this case, the claimant-employees had initially filed their case as a class/collective action in federal court. Pursuant to arbitration agreements that the plaintiffs had signed during their employment, the defendant successfully moved to compel the plaintiffs to pursue their claims in arbitration. Because the arbitration agreement at issue called for arbitration pursuant to the American Arbitration Associations (AAA) rules governing arbitration, the plaintiffs successfully argued that a Rule 23 type opt-out mechanism rather than 216(b)s opt-in governed as the appropriate class mechanism. Twelve (12) days after the arbitrators holding that an opt-out class procedure would govern, the defendant began requiring all current employees to sign a new arbitration clause, which if enforced, would have precluded the current employees from participating in the putative class action, yet to be certified. Arguing that the respondent-employers unilateral effort to defeat putative class members participation in the arbitration required thorough remedial measures, the claimant-employees moved for a protective order and temporary restraining order to: (1) Enjoin any further dissemination of the letter to current employees with the class-waiver form; (2) Enjoin any effort by the respondent-employer or its counsel to chill participation in the case, including prohibiting any further unauthorized communication with any class members concerning joining the case, except as approved by the arbitrator; (3) Enjoin retaliation by [Waterstone] against any individual participating in the case; (4) Direct that [Waterstone] (in a form and manner supervised by the Arbitrator or on consent of claimants counsel) promptly notify all class members who received Exhibits A and B of the impropriety of [Waterstone's] acts and the invalidity of the waivers it solicited; (5) Sanction [Waterstone] with monetary relief for its improper behavior [ ] so that [Waterstone] does not achieve any of the benefit of chilling individuals from participating in this case; (6) Reserve the opportunity for individuals to join the case post-judgment, should they opt-out now, given their employers clear statement of its desire that they not join this case; (7) Award Claimants costs and attorneys fees for the time spent on the motion; [and] (8) Award such further relief in the future, as may become necessary to remedy the ill effects of [Waterstone's] improper behavior. In opposition, the respondent-employer argued that the motion should be denied because: (1) the arbitrator lacked jurisdiction over the issue presented, because the parties had not agreed to arbitrate the issue of the permissibility of the subsequent class-waivers; (2) it was procedurally improper, because a class or collective action had yet to be certified; and (3) the employees had not demonstrated the requisite irreparable harm to warrant the relief sought. Initially, the arbitrator rejected the respondent-employers jurisdictional argument: It is true that a class has not yet been certified. Indeed, the clause-construction award that contemplates a class arbitration may itself be vacated by the District Court. However, even if the motion to certify a class should be denied, or if the Court should vacate the clause-construction award, the arbitration may continue as a collective proceeding (opt in) as a result of Judge Crabbs direction that Herrington must be allowed to join other employees to her case. (D. Ct. Decn. at 18).

The arbitrator similarly rejected the argument that the relief sought was premature: Whether a proceeding continues as a class procedure or a collective procedure, it must be protected from coercive or misleading communications that are designed to, or have the effect of, persuading or intimidating potential claimants to withhold their participations. The law realistically recognizes that such improper communications may be just as effective pre-certification as post-certification. Therefore, it is within the jurisdiction indeed, it is the duty of the judge or arbitrator before whom such a proceeding is pending to protect the integrity of the proceeding and to require that all information conveyed by the parties to potential class members about the proceeding be accurate, not coercive, and not misleading. Waterstones argument that control over communications cannot arise until a class is certified is simply wrong. The power (jurisdiction) to control the parties communications to class members or putative class members can arise at least as early as when the initial pleading is filed. See, e.g. HoffmanLaRoche at 487 ([I]t lies within the discretion of a district court to begin its involvement early at the point of the initial notice.).

The arbitrator added: Waterstones contention that it has has never consented to arbitrate its management decisions as to the nature and form of employment agreements with employees who are not parties to this case (Jurisd. M emo at 1) assumes that this arbitration is about what kind of dispute resolution provision going forward Waterstone may provide in its form employment agreement. The assumption is false. Herrington brought this arbitration to recover past minimum wages and overtime compensation allegedly due to her and to her fellow employees. Jurisdiction over that claim was established with the filing of the demand for arbitration, and it is the duty of the arbitrator to preserve and protect the integrity of the proceedings with respect to that claim. The entire dispute that is subject to this arbitration is therefore to be resolved under the dispute resolution provisions of the pre-Amendment employment agreement

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Instead, the arbitrator held that once the proceeding had commenced, the employer-respondent could not require the potential class members to waive their rights to participate in the case, as members of the class: However, whatever may be the legality or enforceability of either Option A or Option B in future disputes that might arise between Waterstone and its mortgage-loan employees, those amendments can have no impact on this Herrington arbitration or on the employee classs rights or choices in it. Once Herrington commenced her arbitration under the original arbitration clause in the employment agreement, Waterstone could not change the nature or course of this pending arbitration by requiring the putative claimants in this proceeding to agree to an entirely different dispute-resolution regime. This arbitration must, therefore, continue under the Agreement that governed when it was commenced, the Agreement that Waterstone, itself, argued successfully to the District Court requires Herringtons dispute to be arbitrated.

Thus, the arbitrator granted the claimant-employees their requested relief. Click Herrington v. Waterstone M ortgage Corp. to read the entire Decision and Order on Claimants Application for Protective Order, Temporary Restraining Order and Preliminary Injunction.
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W.D.Wisc.: Loan Officers Compelled to Arbitrate FLSA Claims, But Class Waiver Stricken In Light of D.R. Horton
Herrington v. Waterstone Mortgage Corp. In this proposed collective action, the plaintiff sought to pursue a collective action on behalf of defendants loan officers, seeking unpaid overtime wages under the FLSA. As discussed here, the defendant moved to to dismiss or stay the case on the ground that plaintiffs claims were subject to an arbitration agreement. Significantly, while the court enforced the arbitration agreement and remanded the case to arbitration, it struck the purported class waiver portion of the arbitration agreement in light of the recent holding in In re D.R. Horton, Inc. The specific language at issue was the following language from the parties agreement to arbitrate: [A]ny dispute between the parties concerning the wages, hours, working conditions, terms, rights, responsibilities or obligations between them or arising out of their employment relationship shall be resolved through binding arbitration in accordance with the rules of the American Arbitration Association applicable to employment claims. Such arbitration may not be joined with or join or include any claims by any persons not party to this Agreement. Except as otherwise set forth herein, the parties will share equally in the cost of arbitration. After discussing a litany of cases from the NLRB holding that claims for unpaid wages by workers represent concerted activity, the court discussed the ramifications of the recent D.R. Horton case and held that the class action waiver here was unenforceable. In so doing the court addressed and rejected defendants arguments as to why D.R. Horton should not be applied to the case. Specifically, the court rejected defendants arguments that: (1) D.R. Horton (and the NLRA) only protect employees, and not former employees such as plaintiff; (2) an employee can bring about the same changes in the workplace pursuing an individual claim as he or she can pursuing a claim collectively with other employees; and (3) D.R. Horton impermissibly conflicts with AT&T Mobility LLC v. Concepcion. However, because the court held that the class waiver provision was severable from the arbitration agreement, the court severed the waiver and remanded the case to arbitration, potentially as a collective action. Click Herrington v. Waterstone Mortgage Corp. to read the entire Opinion and Order. Thanks to Dan Getman for the heads up on this recent decision.
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2 New Decisions Regarding Enforcement of Arbitration Agreements in Context of FLSA Claims Reach Opposite Results
Recent weeks hav e brought m ore opinions regarding the issue of whether specific arbitration agreem ents are enforceable. Howev er, as two recent opinions show, these decisions continue to be fact-specific in v irtually all instances, and judge and/or state-law specific in others. In the first case, Carey v . 2 4 Hour Fitness USA Inc., rely ing on Texas state law, the Fifth Circuit affirm ed a lower courts decision holding that an arbitration agreem ent allowing the em ploy er to unilaterally change the term s lacked the necessary consideration to render the agreem ent enforceable. In a second case, LaVoice v . UBS Financial Serv ices, Inc., a court within the Southern District of New York exam ined a different arbitration-related issue- the substantiv e unconscionability of a collectiv e action

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waiv er- concluding that com pelling a potentially high v alue FLSA claim to arbitration on an indiv idual basis does not conflict with the substantiv e law regarding the FLSAs collectiv e action prov isions. Significantly , the courts conclusion in this regard appears to conflict with another recent holding discussed here, in which another court within the sam e district held that collectiv e action waiv ers are unenforceable per se, because they prev ent em ploy ees from v indicating their substantiv e statutory rights under the FLSA. Carey v. 24 Hour Fit ness USA Inc. Law3 6 0 aptly sum m arized this decision as follows: The Fifth Circuit on Wednesday allowed a proposed ov ertim e class action against 2 4 Hour Fitness USA Inc. to go forward, finding an arbitration agreem ent at issue contained an escape hatch for the fitness chain that m ade it unenforceable. In a unanim ous, published opinion, the appeals court upheld a Texas federal courts ruling that the arbitration agreem ent in 2 4 Hour Fitness em ploy ee handbook was illusory because it allowed the com pany to retroactiv ely m odify or term inate the agreem ent. Because 2 4 Hour Fitness reserv ed the right to unilaterally adjust the conditions of em ploy m ent including those which required em ploy ees to arbitrate claim s on an indiv idual basis the appeals court found that the arbitration agreem ent was inv alid from the outset. If a 2 4 Hour Fitness em ploy ee sought to inv oke arbitration with the com pany pursuant to the agreem ent, nothing would prev ent 2 4 Hour Fitness from changing the agreem ent and m aking those changes applicable to that pending dispute if it determ ined that arbitration was no longer in its interest, the panel said. Click Carey v . 2 4 Hour Fitness USA Inc. to read the entire Fifth Circuit Opinion.

LaVoice v. UBS Financial Services, Inc. In LaVoice, the court held that an arbitration agreem ent, requiring indiv idual arbitration was enforceable, despite plaintiffs argum ent that such an schem e would depriv e plaintiff of substantiv e statutory rights to proceed collectiv ely under the FLSA. Discussing the issue, the court reasoned: LaVoice also argues that the arbitration agreem ents between him and UBS are unenforceable because they would preclude him from exercising his statutory rights. To support this position, LaVoice likens the class waiv ers in the instant case with those that were found unenforceable in the Amex line of cases. LaVoice also draws com parison between his circum stances and those of the plaintiff in Sutherland v. Ernst & Young LLP, 7 6 8 F.Supp.2 d 54 7 (S.D.N.Y.2 01 1 ). The enforceability of a class action waiv er in an arbitration agreem ent m ust be considered on a case-by -case basis on its own m erits, gov erned with a healthy regard for the fact that the FAA is a congressional declaration of a liberal federal policy fav oring arbitration agreem ents. Amex I I , 6 3 4 F.3 d at 1 9 9 . Turning to the class waiv er at issue and LaVoices specific circum stances, this Court finds that the practical effect of enforcem ent of the waiv er in the instant case would not preclude LaVoice from exercising his rights under the statutes. I d. at 1 9 6 . The Court com es to its finding that LaVoices statutory rights will not be precluded by enforcem ent of the class waiv er after rev iewing his subm issions regarding: his estim ated dam ages claim , his estim ated attorney s fees, his estim ated expert fees, his disinclination to pursue his claim s indiv idually , his counsels disinclination to pursue the claim s indiv idually , and his likelihood of success at arbitration. Although LaVoice and Defendants contest the v alue of LaVoices ov ertim e claim , in reaching its decision, the Court accepts the figure cited in LaVoices own opposition papers of ov ertim e claim s between $1 2 7 ,000 to $1 3 2 ,000. Aff. Jeffrey G. Sm ith in Supp. of Oppn. to Mot. to Com pel Arbitration at 5. Assum ing this self-reported v alue of claim s, the Court finds that LaVoices circum stances differ drastically on their face from those of the plaintiffs in either the Amex line of cases or Sutherland. Plaintiffs in those cases could each only claim de minimus dam ages of less than $6 000. With respect to the estim ated attorney s fees, the Court finds that, unlike the arbitration agreem ent at issue in Sutherland, the arbitration agreem ents at issue in the instant case would perm it LaVoice to recov er an award of attorney s fees. Since the agreem ents authorize the arbitrator(s) to award whatev er rem edies would be av ailable to the parties in a court of law and awards of attorney s fees are m andatory for the prev ailing party under the FLSA, the agreem ents them selv es crate no im pedim ent to LaVoices recov ery of fees. See Ex. 6 to Decl. of Matthew Lev itan at 2 0; Ex. 1 0 to Decl. of Matthew Lev itan at 3 ; and 2 9 U.S.C. 2 1 6 (b) (The court in such action shall allow a reasonable attorney s fee to be paid by the defendant, and costs of the action.) The instant case is therefore distinguishable from Sutherland and its consideration of attorney s fees in determ ining whether plaintiffs claim s were unarbitrable. See also Banus v. Citigroup Global Mkts., I nc., No. 09 7 1 2 8, 2 01 0 WL 1 6 4 3 7 80, at *1 0 n. 6 1 (S.D.N.Y. Apr.2 3 , 2 01 0) (enforcing class action waiv er in arbitration agreem ent where plaintiffs estim ated recov ery was $4 5,6 7 5.3 6 and attorney s fees would be at least $1 00,000.) The court also ev aluated and rejected plaintiffs claim that expert costs to be incurred would be prohibitiv e in an indiv idual claim , whereas spreading the cost ov er a collectiv e group would be m ore palatable and rejected sam e, in the context of plaintiffs proffered argum ent that his counsel would be disinclined to pursue his claim s on an indiv idual basis by them selv es. The court concluded, [i]n light of the foregoing, the Court finds that LaVoice has not m et his burden of showing the likelihood of incurring such prohibitiv ely expensiv e costs such that the class waiv er prov isions in the instant action would preclude him from bringing his claim s against Defendants in an indiv idual or collectiv e capacity . Amex I I , 6 3 4 F.3 d at 1 9 7 (citing Randolph, 53 1 U.S. at 9 2 .) Click LaVoice v . UBS Financial Serv ices, Inc. to read the entire Mem orandum and Order com pelling the case to arbitration on an indiv idual basis.

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As m ore and m ore cases are decided following recent United States Suprem e Court jurisprudence on arbitrability and class waiv er issues, its becom ing m ore and m ore clear that the results are v ery fact-specific to each case. Hopefully , higher courts will begin to weigh in on som e of the broader issues and giv e som e clarity in the near future.
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D.Minn.: Where Agreement Silent As to Collective Action, Case May Proceed on Collective Basis in Arbitration
Mork v. Loram Maint enance of Way , Inc. This case was before the court on the defendants m otion to com pel arbitration on an indiv idual basis. While, the parties were in agreem ent that the case should be rem anded to arbitration, the salient issue before the court was whether the arbitration agreem ent- silent on the issue of collectiv e/class proceedings- allowed for collectiv e treatm ent of the case. The court held that the parties had agreed to collectiv e treatm ent of claim s by the agreem ents silence. Thus, the case was rem anded to arbitration, but to be treated as a collectiv e action. Initially the court held that, based on the absence of clear authority one way or another from the Suprem e Court, the court had the authority to decide whether the case could proceed on a collectiv e basis. Hav ing m ade this decision, it proceeded into its analy sis. Discussing the standard it would apply , the court explained: The scope of an arbitration agreem ent is determ ined with reference to the agreem ent of the parties as ev idenced by the term s of the arbitration agreem ent itself or [based on] som e background principle of contract law that would affect its interpretation. See AT & T Mobility LLC v. Concepcion, 1 3 1 S.Ct. 1 7 4 0, 1 7 50 (2 01 1 ). The Court m ust giv e effect to the contractual rights and expectations of the parties. StoltNielsen, 1 3 0 S.Ct. at 1 7 7 4 (citation om itted); see Mitsubishi Motors Corp. v. Soler ChryslerPlymouth, I nc., 4 7 3 U.S. 6 1 4 , 6 2 6 (1 9 85) (as with any other contract, the parties intentions control). Im position of a particular ty pe of arbitration cannot be based solely on policy judgm ents. Concepcion, 1 3 1 S.Ct. at 1 7 50. Like any contract dispute, howev er, am biguities in the agreem ent m ust be construed against the drafter. See, e.g., Advantage Consulting Group, Ltd. v. ADT Sec. Sys., I nc., 3 06 F.3 d 582 , 588 (8th Cir.2 002 ). In facing the question of whether to com pel collectiv e v ersus indiv idual arbitration, the Court m ust therefore determ ine what the parties agreed to in the Arbitration Clause. A m ere agreem ent to arbitrate, without m ore, does not im ply agreem ent to collectiv e arbitration. Cf. StoltNielsen, 1 3 0 S.Ct. at 1 7 7 5. This approach is consistent with Eighth Circuit precedent in the context of class arbitrations, Dominium Austin Partners, L.L.C. v. Emerson, 2 4 8 F.3 d 7 2 0, 7 2 82 9 (8th Cir.2 001 ), and consolidation of indiv idual arbitrations, Baesler v. Contl Grain Co., 9 00 F.2 d 1 1 9 3 , 1 1 9 5 (8th Cir.1 9 9 0). In Emerson and Baesler, the Eighth Circuit held that an arbitration agreem ent m ust prov ide for the ty pe of arbitration which is sought to be com pelled by the Court. Loram urges a restrictiv e reading of Baesler, Emerson, and StoltNielsen which would require explicit reference to, and acceptance of, collectiv e arbitration in order for Morks claim to proceed on a collectiv e basis. Those cases do not stand for such a strict standard. In StoltNielsen, the Suprem e Courts statem ent that an intention to authorize class arbitration cannot be infer[red] solely from the fact of the parties agreem ent to arbitrate, StoltNielsen, 1 3 0 S.Ct. at 1 7 7 5 (em phasis added), indicates that such an intention m ay be inferred and need not be explicitly stated. The m ajority in StoltNielsen therefore [did] not insist on express consent to class arbitration. I d. at 1 7 83 (Ginsburg, J., dissenting). Accordingly , StoltNielsen does not foreclose the possibility that parties m ay reach an im plicitrather than expressagreem ent to authorize class-action arbitration. Jock v. Sterling Jewelers I nc., 6 4 6 F.3 d 1 1 3 , 1 2 3 (2 d Cir.2 01 1 ); see Jones v. St. Paul Cos ., I nc., 4 9 5 F.3 d 888, 89 3 (8th Cir.2 007 ) ([F]ederal courts are bound by the Suprem e Courts considered dicta alm ost as firm ly as by the Courts outright holdings, particularly when [the dicta] is of recent v intage and not enfeebled by any [later] statem ent.) (internal quotation m arks and citations om itted). In sum , the question before the Court is not whether the Arbitration Clause used the precise words collectiv e arbitration. Rather, the Court m ust determ ine whether the Arbitration Clause ev inces sufficient indicia of agreem ent between the parties that a claim within its scope m ay proceed on a collectiv e basis. In doing so, the Court m ust keep in m ind that Loram drafted the language of the Arbitration Clause and, therefore, that am biguities m ust be construed against it. Advantage Consulting, 3 06 F.3 d at 588. The Court notes that the test from StoltNielsen stated here m ay be m ore stringent that the appropriate test for contracts of adhesion. See StoltNielsen, 1 3 0 S.Ct. at 1 7 83 (Ginsburg, J., dissenting) ([T]he Court apparently spares from its affirm ativ e-authorization requirem ent contracts of adhesion presented on a take-it-or-leav e-it basis.). Because the Court concludes that the Arbitration Clause does affirm ativ ely authorize collectiv e arbitration, there is no need to address whether the CAA was a contract of adhesion and therefore subject to a less stringent standard. The Court notes, howev er, that the parties here, unlike those in StoltNielsen, are not both sophisticated business entities with com parable bargaining power, see id. at 1 7 7 5, and the CAA appears to hav e been a takeit-or-leav e-it boilerplate contract. The court then applied its standard and held that the silence of the parties on the collectiv e issue dem onstrated the indicia that the parties agreed to collectiv e arbitration: While the parties distinguish between express and im plied agreem ent to collectiv e arbitration, as discussed abov e, the relev ant question is whether there exists sufficient indicia that the parties agreed to undertake collectiv e arbitration in the ev ent of an em ploy m ent dispute. While the Arbitration Clause does not refer explicitly to collectiv e claim s, the Court concludes that it does authorize such claim s to proceed before an arbitrator. To begin, the Arbitration Clause applies to claim s or disputes of any nature arising out of or relating to the em ploy m ent relationship and statutory claims arising out of or resulting from [Mork's] em ploy m ent with Loram . (CAA 8 (em phasis added).) Morks claim that he and sim ilarly situated coworkers were depriv ed of ov ertim e pay is undisputedly related to the em ploy m ent relationship and his FLSA claim is statutory . An action arising from FLSA v iolations m ay be m aintained against any em ploy er in any Federal or State court of com petent jurisdiction by any one or m ore em ploy ees for and in behalf of him self or them selv es and other

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employees similarly situated. 2 9 U.S.C. 2 1 6 (b) (em phasis added). Thus, Mork has a statutory right to bring a FLSA claim on behalf of him self and sim ilarly situated Field Application Technicians, and such a claim arises out of his em ploy m ent relationship with Loram . Loram contends that Morks ability to bring a claim on behalf of sim ilarly situated em ploy ees is foreclosed because the Arbitration Clauses references to potential arbitral parties include only Loram and Mork. For exam ple, the Arbitration Clause prov ides that the arbitrator will hav e exclusiv e authority to resolv e any dispute or claim relating to, arising out of, or resulting from my employment with Loram and the statutory claim s cov ered by the Arbitration Clause are those arising out of or resulting from my employment with Loram or the form ation or the term ination of my employment with Loram . (CAA 8 (em phasis added).) These statem ents, Loram argues, show that the Arbitration Clause does not authorize collectiv e arbitrations. The Court is not persuaded that the Arbitration Clauses particular reference to disputes between Mork and Loram m ust be read to preclude a collectiv e claim . Morks FLSA claim is no less a claim arising out of [his] em ploy m ent with Loram because it im plicates sim ilarly situated em ploy ees. The FLSA claim rem ains his. Viewed in ev en the m ost charitable light, Loram s argum ent only creates som e am ount of am biguity in the Arbitration Clauseam biguity that m ust be resolv ed in Morks fav or. Advantage Consulting, 3 06 F.3 d at 588. The conclusion that the Arbitration Clause perm its collectiv e arbitration is also supported by the contrast between its broad delegation of any claim s and disputes to arbitration and its exclusion of only claim s or disputes [arising out of the CAA], or the breach, term ination or inv alidity thereof. (CAA 8.) By negativ e im plication, collectiv e arbitrationa ty pe of arbitration not expressly excludedcan be presum ed to be cov ered by the wide ranging term s of the Arbitration Clause, particularly in light of the factors already discussed. The Court further notes that the Arbitration Clause prov ides that arbitration be conducted in accordance with m odel rules prov ided by the Am erican Arbitration Association (AAA) in force at the tim e of the claim or dispute and that the AAA shall adm inister any such arbitration. (CAA 8.) The AAAs Policy on Class Arbitrations states that the AAA will adm inister dem ands for class arbitration if (1 ) the underly ing agreem ent specifies that disputes arising out of the parties agreem ent shall be resolv ed by arbitration in accordance with any of the Associations rules, and (2 ) the agreem ent is silent with respect to class claim s, consolidation or joinder of claim s. See Am erican Arbitration Association, Policy on Class Arbitrations, July 1 4 , 2 005, available at http://www.adr.org/sp.asp?id= 2 59 6 7 . Ev en as interpreted by Loram , the Arbitration Clause in this case satisfies both criteria. While this AAA policy was prom ulgated after the execution of the Arbitration Clause, the parties here agreed to be bound by the AAA rules in force at the tim e of the claim or dispute. (CAA 8.) The parties thus intended to be bound by future iterations of those rules. Loram s decision to follow and abide by AAA rules therefore lends further support to the Courts conclusion that the Arbitration Clause authorizes collectiv e arbitration. It is im portant to note that Mork has not m ov ed the Court to consolidate otherwise independent actions into a single proceeding as was the case in Baesler, 9 00 F.3 d at 1 1 9 4 9 5. Rather, Mork seeks to proceed with a single, statutorily prescribed collectiv e claim . Consolidation is a m ethod by which a Court m ay efficiently resolv e otherwise legally independent claim s which happen to share a com m on question of law or fact. See Fed.R.Civ .P. 4 2 (a). A FLSA collectiv e action, in contrast, is a m echanism in which one claim can v indicate the rights of m any . If Mork were seeking consolidated treatm ent of independent claim s brought by em ploy ees, the Court would hesitate in considering those claim s as arising out of or resulting from [Mork's] em ploy m ent with Loram . ( See CAA 8.) The Court also notes that som e of the concerns raised by the Suprem e Court about class arbitration are not present in the sort of collectiv e arbitration sought by Mork. For one, a FLSA collectiv e action is unlike a class action under Rule 2 3 of the Federal Rules of Civ il Procedure because sim ilarly situated em ploy ees m ust alway s opt-in to a FLSA action. See 2 9 U.S.C. 2 1 6 (b). Worries about an arbitrator adjudicat[ing] the rights of absent parties without affording them the full panoply of protections prov ided in court are therefore greatly dim inished. See StoltNielsen, 1 3 0 S.Ct. at 1 7 7 6 . Finally , while fully cognizant that policy judgm ents m ay not be dispositiv e in this legal analy sis, see Concepcion, 1 3 1 S.Ct. at 1 7 50, the Court would be rem iss if it did not briefly address the consequences of adopting a rule that an arbitration agreem ent cannot allow for collectiv e or class arbitration except where the agreem ent explicitly uses and ratifies those precise term s. Such a rule would lead to great uncertainty , calling into question the countless arbitration agreem ents that hav e been executed in the shadow of a less stringent rule. Moreov er, the adoption of such a rule would likely prev ent the v indication of workers basic rights under the FLSA. See Sutherland v. Ernst & Young LLP, 7 6 8 F.Supp.2 d 54 7 , 553 54 (S.D.N.Y.2 01 1 ). Click Mork v . Loram Maintenance of Way , Inc. to read the entire Mem orandum of Law and Order.
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M.D.Tenn.: Contractual Limitation of FLSA Claims to One Year SOL Unenforceable; Provision Severed and Arb Agreement Enforced
Pruiet t v. West End Rest aurant s, LLC Before the court in this putativ e collectiv e action were the defendants m otion to dism iss and rem and the case to arbitration, as well as plaintiffs m otion to conditionally certify the case as a collectiv e action. As discussed here, the court held that the prov ision within the arbitration agreem ent purporting to reduce the applicable statute of lim itations to one y ear (from either two or three y ears) was unenforceable. Howev er, because the court further held that the unenforceable prov ision was sev erable, it sev ered the statute of lim itations prov ision and otherwise held the arbitration agreem ent to be enforceable. Thus, it rem anded the case to arbitration after striking the unenforceable prov ision. After rev iewing a history of applicable case law and determ ining that the enforceability of the prov ision in question was an issue of first im pression, the court reasoned that allowing an em ploy er to contractually shorten the statute of lim itations applicable to FLSA

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claim s would unduly abridge the statutory rights granted under the FLSA. The court explained: The FLSA requires em ploy ers to pay their em ploy ees a statutory m inim um wage and to pay ov ertim e com pensation at a rate not less than one and one-half tim es the em ploy ees regular rate of pay . 2 9 U.S.C. 2 06 and 2 07 (2 01 1 ). An em ploy er who fails to com ply with these prov isions is liable for the unlawfully withheld com pensation, as well as an additional equal am ount of liquidated dam ages. I d. at 2 1 6 (b). These dam ages, including liquidated dam ages, are com pensatory . Elwell v. Univ. Hosp. Home Care Servs., 2 7 6 F.3 d 83 2 , 84 0 (6 th Cir.2 002 ). A plaintiff seeking to recov er under the FLSA m ust file the claim within two y ears of accrual of the cause of action, or within three y ears of accrual for a willful v iolation. 2 9 U.S.C. 2 55(a) (2 01 1 ). Each pay check that fails to include required wages constitutes a separate statutory v iolation. See Archer v. Sullivan Cnty., Nos. 9 552 1 4 , 9 552 1 5, 1 2 9 F.3 d 1 2 6 3 , 1 9 9 7 WL 7 2 04 06 , at *2 (6 th Cir.1 9 9 7 ). The plaintiff m ay recov er com pensatory dam ages under 2 1 6 (b) as far back as the statute of lim itations will reachthat is, the plaintiff m ay recov er up to two y ears of com pensatory dam ages if the v iolation was not willful, and up to three y ears of com pensatory dam ages if the v iolation was willful, dating back from the date of the com plaint. See, e.g., Campbell v. Kelly, No. 3 :09 cv 4 3 5, 2 01 1 WL 3 86 2 01 9 , at *1 0 (S.D.Ohio Aug.3 1 , 2 01 1 ) (finding that, where plaintiff filed FLSA claim s on Nov em ber 1 6 , 2 009 , the plaintiff could seek relief dating back to Nov em ber 1 7 , 2 007 for a non-willful v iolation, or back to Nov em ber 1 7 , 2 006 for a willful v iolation); Sisk v. Sara Lee Corp., 59 0 F.Supp.2 d 1 001 , 1 004 (W.D.Tenn.2 008) (finding that where plaintiff filed FLSA claim s on May 7 , 2 007 , the relev ant tim e period for willful v iolations began on May 7 , 2 004 ); Herman v. Palo Grp. Foster Home, I nc., 9 7 6 F.Supp. 6 9 6 , 7 00, 7 0506 (W.D.Mich.1 9 9 7 ) (finding that defendant willfully v iolated FLSA and awarding back wages and liquidated dam ages for period of three y ears prior to filing of com plaint), affd, 1 83 F.3 d 4 6 8 (6 th Cir.1 9 9 9 ) (upholding dam ages award). Thus, under the FLSA, a plaintiffs substantiv e right to full com pensation is determ ined by the statute of lim itations. As a consequence, unlike the federal statutory claim s at issue in Morrison, DaimlerChrysler, and Ray, shortening the statute of lim itations for an FLSA claim necessarily precludes a successful plaintiff from receiv ing full com pensatory recov ery under the statute. Indeed, BrickTops does not dispute that enforcing the contractual lim itations prov ision would lim it the Plaintiffs to one y ear of com pensatory dam ages recov ery , ev en though the FLSA entitles Plaintiffs to m ore. Thus, Defendants concede that the prov ision prev ents plaintiffs from recov ering the full panoply of com pensatory rem edies to which the FLSA entitles them . That is not a perm issible result. Plaintiffs substantiv e right to full com pensation under the FLSA m ay not be bargained away . Accordingly , the contractual lim itations prov ision is unenforceable as to FLSA claim s. In reaching this holding, the court has undertaken the necessary statute-specific analy sis that neither the Boaz court nor the Wineman court conducted. In Wineman, which was issued before the U.S. Suprem e Court decision in Penn Plaza lim ited Barrentine to its facts, the district court found that a six-m onth contractual lim itations prov ision in an em ploy m ent agreem ent was not enforceable as to FLSA claim s. Wineman, 3 52 F.Supp.2 d at 82 1 2 3 . The defendant had argued, as BrickTops does here, that waiv er of the FLSA statute of lim itations constituted waiv er of a procedural right, not a substantiv e right. I d. at 9 2 2 . The court rejected this argum ent, reasoning that, in light of the public policy im plications, that is a distinction without a difference. I d. In support of this reasoning, the court relied on Barrentine for the proposition that ev en FLSA procedural rights, including the right to the judicial forum , could not be abridged, com prom ised, or waiv ed by priv ate agreem ent. I d. at 82 3 . Thus, the court characterized the shortened lim itations period as a com prom ise of em ploy ees rights under the FLSA in v iolation of public policy . I d. at 82 2 2 3 . It did not analy ze whether the shortened statute of lim itations affected FLSA rem edies, likely based on its assum ption that Barrentine rendered that inquiry irrelev ant. In Boaz, the district court enforced a six-m onth contractual lim itation on FLSA claim s, but, like Wineman, did not analy ze whether that lim itation affected FLSA rem edies. In Boaz, the plaintiff had asserted claim s under Title VII for race and gender discrim ination, as well as FLSA claim s for pay discrim ination and failure to pay ov ertim e com pensation. I d. at 9 3 2 . At the sum m ary judgm ent stage, the plaintiff, rely ing on Wineman, contended that her FLSA claim s were not tim e-barred by a six-m onth lim itations prov ision in her em ploy m ent agreem ent. The court declined to follow Wineman, reasoning that the subsequent Penn Plaza decision lim ited Barrentine to its facts, and found that federal statutory procedural rights m ay be abridged. I d. The court observ ed that sev eral courts had found that lim itations prov isions were enforceable as to other federal statutes, including discrim ination claim s under 1 9 81 , ERISA claim s, and FMLA claim s. I d. at 9 3 3 . It is also noted that, as a general m atter, statutes of lim itations are procedural, not substantiv e. I d. Howev er, without any analy sis specific to the FLSA, the court sum m arily concluded that the FLSA statute of lim itations is procedural and, therefore, waiv able. Thus, although Boaz and Wineman reached differing conclusions about the enforceability of a contractual lim itation on FLSA claim s, neither reached the crucial inquiry presented here. In particular, the reasoning in Boaz is flawed for two reasons. First, the Boaz court m isinterpreted Penn Plaza, which m erely held that statutory claim s m ay be arbitrated, but did not address whether the statute of lim itations for any federal statutelet alone the FLSAconstituted a waiv able right. Second, the court should not hav e concluded that the FLSA statute of lim itations was purely procedural without assessing whether enforcing a shortened lim itation on FLSA claim s prev ented successful plaintiffs from v indicating their substantiv e right to full com pensation. Click Pruiett v . West End Restaurants, LLC to read the entire Mem orandum and Order.
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S.D.Cal.: Although Arbitration Agreement With Class Waiver Enforceable, Confidentiality Provision Stricken as Unconscionable Because Overbroad
Grabowski v. Robinson This case was before the court on defendants m otion to com pel arbitration on an indiv idual (rather than class) basis. Although the court noted that plaintiffs were required to sign the arbitration agreem ent contained in their com pensation agreem ents, under threat of forfeiture of com m issions, the court held that did not m ake the agreem ent unenforceable as entered into under duress. The

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Arbitration | Overtime Law Blog | FLSA Decisions

court also, in large part, dism issed other argum ents regarding the substantiv e and procedural unconscionability of the agreem ent. Howev er, as discussed here, the court held that the confidentiality prov ision which barred any discussion of the litigation without the other party s consent to be far too broad. Discussing the confidentiality prov ision the court stated: Plaintiff contends: [T]he Defendants rules im pose confidentiality which unfairly fav ors Defendant. While arbitration norm ally is not open to the public, the Defendants rules go m uch further. Defendants rules require that the record of the proceedings be confidential under threat of a sanction order by the arbitrator. The Em ploy m ent Dispute Mediation/Arbitration Procedure contains a prov ision entitled, Confidentiality , which states: All aspects of the arbitration, including without lim itation, the record of the proceeding, are confidential and shall not be open to the public, except (a) to the extent both Parties agree otherwise in writing, (b) as m ay be appropriate in any subsequent proceedings by the Parties, or (c) as m ay otherwise be appropriate in response to a gov ernm ental agency or legal process, prov ided that the Party upon whom such process is serv ed shall giv e im m ediate notice of such process to the other Party and afford the other Party an appropriate opportunity to object to such process. At the request of a Party or upon his or her initiativ e, the Arbitrator shall issue protectiv e orders appropriate to the circum stances and shall enforce the confidentiality of the arbitration as set forth in this article. In Davis, the Court of Appeals for the Ninth Circuit stated that, under California law, [c]onfidentiality by itself is not substantiv ely unconscionable, but the em ploy ers confidentiality clause is written too broadly and unconscionably fav ors [the em ploy er], when the clause at issue would prev ent an em ploy ee from contacting other em ploy ees to assist in litigating (or arbitrating) an em ploy ees case. Davis, 4 85 F.3 d at 1 07 87 9 (The clause precludes ev en m ention to any one not directly inv olv ed in the m ediation or arbitration of the content of the pleadings, papers, orders, hearings, trials, or awards in the arbitration or ev en the existence of a controv ersy and the fact that there is a m ediation or an arbitration proceeding. ). In this case, the confidentiality prov ision in the Em ploy m ent Dispute Mediation/Arbitration Procedure is broader than what the court in Davis indicated would be conscionable. Cf. id. at 1 07 9 (noting that [t]he parties to any particular arbitration, especially in an em ploy m ent dispute, can alway s agree to lim it av ailability of sensitiv e em ploy ee inform ation (e.g., social security num bers or other personal identifier inform ation) or other issuespecific m atters, if necessary ). The Court finds that the confidentiality prov ision in the arbitration agreem ent is substantiv ely unconscionable under California law. While courts- seem ingly bound by a recent slew of em ploy er/arbitration-friendly decisions from the Suprem e Court- continue to com pel arbitration and enforce class and collectiv e action prov isions contained in arbitration agreem ents, this decision seem s som ewhat in line with the rem edial nature of the FLSA and related state wage and hour laws. One way em ploy ees and their counsel can try to ev en the play ing field m ight be to seek court-approv ed notice of pending litigation, notwithstanding the inability to proceed as a class/collectiv e action. Notify ing other em ploy ees of existing litigation (and their rights to be paid in accordance with wage and hour laws) would certainly be in line with the rem edial purposes of the FLSA and related state wage and hour laws. In any ev ent, the courts holding that an em ploy er cannot hide its alleged v iolations for other em ploy ees certainly seem s to be a step in the right direction. Click Grabowski v . Robinson to read the entire Opinion.

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