Raniere Bucks Concepcion in Collective Action Context

Since the Supreme Court’s decision earlier this year in AT&T Mobility LLC v. Concepcion, nearly all federal courts that have been faced with the issue, have enforced collective action waivers of federal wage-hour claims in arbitration agreements, assuming that the agreement was not unconscionable under state law.  But a troubling recent decision by a federal district court judge in the Southern District of New York distinguishes class action waivers of state wage-hour claims, which it found generally enforceable, from collective action waivers under the Fair Labor Standards Act, which this judge concluded are per se unenforceable.

 If this ruling is adopted by other courts, it could allow employees complaining of alleged FLSA violations to proceed on a collective action basis and be permitted to issue notice to purportedly similarly-situated current and former employees, despite their agreement to bring wage-hour claims only in arbitration on an individual basis.  Employers’ mandatory arbitration programs containing class and collective action waivers, would therefore lose much of their efficacy.  Indeed, even if this ruling is allowed to stand in a single circuit – here, the Second – that circuit quickly would become a favored forum by plaintiffs’ counsel seeking to bring nationwide collective actions.

To read this blog post click here