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Monday, January 28, 2013

Eighth Circuit Grants Motion to Compel Arbitration of FLSA Claims Despite Class Action Waiver

8th CircuitIn 2009, Bristol Care, Inc. (Bristol), which operates residential care facilities for the elderly, hired Sharon Owen (Owen) as administrator of its Cameron, Missouri facility.  Owens' agreement with Bristol contained a arbitration clause that specifically provided that claims arising under the Federal Labor Standards Act (FLSA) were also subject to arbitration.  The provision also provided that the parties could not arbitrate class claims.  Claims relating to "harassment, discrimination, other statutory violations, or similar claims" were excluded from the mandatory arbitration provision.  

In 2011, Owen sued, alleging violations of FLSA, claiming that she and others similarly situated were required to work in excess of 40 hours a week without being compenstated for overtime.  Bristol moved to compel arbitration, but the Distict Court denied the motion, reasoning that arbitration provisions containing class action waivers are invalid with respect to FSLA claims.  The District Court, relying on one district court decisions and one decision from the National Labor Relations Board (NLRB), distinguished this case from AT&T Mobility, LLC v. Concepcion, reasoning that Concepcion's ruling that arbitration provisions containing class action waivers are enforceable in consumer contracts did not extend to employment contracts.

In Owen v. Bristol Care, Inc., the Eighth Circuit reversed.  It noted that, under the Federal Arbitration Act (FAA), courts are required to enforce arbitration agreements according to their terms.  Federal legislation can override an arbitration provision and a class action waiver only if there is evidence of "congressional command" contrary to the FAA's requirement that arbiration agreements be enforced.  The Eighth Circuit found no such contrary congressional commend in the FLSA.  The court did not feel itself bound under Chevron deference or any other doctrine to defer to the NLRB's narrow interpretation of Concepcion.  Most district courts that had considered the issue have rejected the NLRB's approach.  

The Eighth Circuit also cited to opinions from five other Federal Circuit Courts which ruled that class action waivers in arbitration agreements are enforceable in FLSA cases.  The Eighth Circuit reversed the District Court's denial of Bristol's motion to compel arbitration and remanded the case for an order staying proceedings and compelling arbitration.

[JT]

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