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FLSA Collective Action Wavers in the Eleventh Circuit: Recent Decisions a Mixed Bag

By: Joseph A. White

The Eleventh Circuit recently issued two decisions with significant implications for FLSA claimants in this judicial circuit. Most notably, in Walthour v. Chipio Windshield Repair, LLC, the Eleventh Circuit held that arbitration agreements which include contain collective action waivers do not violate the Fair Labor Standards Act (FLSA).

The outcome in Walthour should come as no surprise after the U.S. Supreme Court’s approval of a similar class action waiver in American Express Co. v. Italian Colors, which we wrote about here. In fact, in Walthour, the Eleventh Circuit cited Italian Colors for the proposition that the Supreme Court had “no qualms” about enforcing arbitration agreements that required forfeiture of plaintiffs’ collective action rights. That Walthour involved an FLSA claim made no difference; the Eleventh Circuit found that “the text of the FLSA does not set forth a non-waivable substantive right to a collective action.”

In the wake of ­Walthour, numerous commentators have predicted that Eleventh Circuit employers will increasingly require employees to sign collective action waivers in order to resolve wage and hour disputes on an individual basis, and to avoid the possibility of facing large scale class and collective actions. That brings us to our second recent Eleventh Circuit opinion–Billingsley v. Citi Trends—which provides employers with some good, common sense guidance on obtaining collective action waivers: don’t wait until after suit is filed.

Billingsley was a putative FLSA collective action brought on behalf of Citi Trend’s store managers. After the named plaintiff filed suit, Citi Trendsbasically pressured its store managers into signing arbitration agreements that waived their right to join the lawsuit. After multiple hearings, the district court “concluded that the arbitration agreements were unconscionable as a matter of law.” The Eleventh Circuit affirmed, stating that:

Whatever right Citi Trends may have had to ask its employees to agree to arbitrate, the district court found that its effort in the summer of 2012 was confusing, misleading, coercive, and clearly designed to thwart unfairly the right of its store managers to make an informed choice as to whether to participate in this FLSA collective action. Since the arbitration agreements by their terms will directly affect this lawsuit, the district court had authority to prevent abuse and to enter appropriate orders governing the conduct of counsel and the parties.

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