FLSA Wage & Hour Claims Can Be Subject to Arbitration

There is news in the employment law world beyond sexual harassment.  Arbitration clauses to be exact.

Yesterday, the Second Circuit issued a small, but important decision for employers that will continue to limit FLSA wage & hour claims.

The court ruled that an employee’s FLSA claims in court were barred by the arbitration clause contained in his employment agreement.  While it isn’t the first time, it’s clear logic will be tough to ignore.

(The case, Rodriguez-Depena v. Parts Authority, Inc. et al can be downloaded here.)

For the court, it was not even a close call. The court ruled that the Supreme Court’s pronouncement years ago that age discrimination claims were barred by an arbitration clause controlled.

The court also looked at whether its decision in the Cheeks v. Freeport Pancake House, Inc. – which required oversight of settlements of FLSA claims — precluded arbitration. The court said it did not.

The rationale of Cheeks, however, is assurance of the fairness of a settlement of a claim filed in court, not a guarantee of a judicial forum.

For employers in Connecticut it remains to be seen if the Connecticut Supreme Court will be all in on such a logic for state wage & hour law claims, but the federal endorsement of arbitration provisions provide a strong basis for doing so.

The case is yet another sign that employers have a few options when it comes to FLSA claims.  It has previously held that class action waivers for FLSA claims are also valid.  

Nevertheless, employers should once again consider whether mandatory arbitration provisions are right for their workforce, particularly when combined with class action waivers.  Having such provisions in place could make a big difference in the future.

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