FAA > FLSA

By Lori Phillips

The Federal Arbitration Act (“FAA”) embodies a liberal policy favoring arbitration agreements. That does not mean, however, that plaintiffs don’t try to escape mandatory arbitration even when they have agreed to it. In Walthour v. Chipio Windshield Repair, LLC, No. 13-11309 (11th Cir. Mar. 21, 2014), plaintiffs challenged the FAA’s application to their waiver of Fair Labor Standards Act (“FLSA”) collective claims for minimum wage and overtime violations. The Eleventh Circuit determined that an arbitration agreement waiving an employee’s ability to bring an FLSA collective action is enforceable under the FAA. Plaintiffs argued that the FLSA’s language provided them a substantive—and therefore an unwaivable—right to collective action, but the Eleventh Circuit reasoned that, absent a clear contrary congressional command, the FLSA does not override the FAA. The Court concluded that no such command to override arbitration agreements appears in the FLSA. The Second, Fourth, Fifth, and Eighth Circuits have already agreed with the Eleventh Circuit’s position.

By concluding that a clear congressional command is required to override the FAA, the Eleventh Circuit’s decision could affect future challenges to the FAA’s application, particularly challenges involving the National Labor Relations Act.