Class Action Waivers Under the Microscope at the Second Circuit

The Second Circuit heard oral argument yesterday morning in two important cases affecting the validity of class-action waivers in arbitration agreements, and based on the tenor of the questioning, the judges will take a skeptical look at the district judges’ decisions, both of which refused to enforce waivers in FLSA cases.

The two cases – unrelated but raising similar issues – present the appellate court with the opportunity to consider decisions that put significant roadblocks in the path of employers seeking to use arbitration agreements to bar class or collective actions in wage-hour and other employment cases.  While the Supreme Court has said that class/collective waivers are permissible under the FAA notwithstanding any state law rules to the contrary, the two district court decisions discussed today have made it difficult for employers within the Second Circuit to know whether these waivers will be enforced.

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