Enforceability of Bilateral Arbitration Clauses with Respect to FLSA Claims
NCLC urged the Second Circuit to hold that agreements to arbitrate on an individual basis are enforceable even with respect to claims arising under the Fair Labor Standards Act (FLSA). In this case, two Citigroup employees filed a collective action against the company alleging violations of the FLSA. Although the employees had entered into an arbitration agreement that would preclude collective action, the lower court found the agreement to be unenforceable on the grounds that it would prevent the FLSA from fulfilling its intended functions.
In its amicus brief, NCLC argued that the decision below is at odds with both the Federal Arbitration Act and recent Supreme Court precedent in Greenwood and Concepcion—which clearly mandate that written agreements to arbitrate on an individual basis be honored. By casting a shadow over the enforceability of millions of employment arbitration provisions, the district court’s ruling threatens to eliminate the great benefits of arbitration—which is speedy, fair, inexpensive, and less adversarial than litigation in court.
The Second Circuit reversed and remanded the case to the district court.
Amicus brief filed 2/22/12. Decided 8/12/2013.
Petition for rehearing filed 8/26/13. The petition for rehearing was granted 12/27/2013, however, the parties were working out a settlement and the petition for rehearing was not renewed.