Following Epic Systems, Collective Action Waivers Are Not Barred by the FLSA

The U.S. Court of Appeals for the Sixth Circuit held that, like the National Labor Relations Act (NLRA), the Fair Labor Standards Act (FLSA) does not provide a bar to arbitration agreements that contain a waiver of the right to bring a collective (or class) action.

As we discussed in an E-lert, earlier this year, in Epic Systems Corp. v. Lewis, the Supreme Court held that arbitration agreements containing waivers of the right to bring class or collective actions over employment-related disputes are enforceable under the Federal Arbitration Act (FAA). In so doing, the Court rejected the National Labor Relation Board’s position that such waivers violate the NLRA’s protections of employees’ rights to engage in concerted action.

While the FLSA specifically gives employees the right to bring a collective action, the Sixth Circuit in Gaffers v. Kelly Services, Inc. noted that the law does not require such action and that employees can waive that right by agreement. Relying on Epic Systems, the Sixth Circuit found that the FLSA does not contain “clear and manifest” congressional intent to make arbitration agreements unenforceable, as required by the FAA. The Sixth Circuit found no policy arguments to rule otherwise, and further rejected the employee’s argument that the FAA’s savings clause, which allows courts to refuse to enforce arbitration agreements based on law or equity grounds, was applicable here, given the Supreme Court’s rejection of the same argument under the NLRA.