FLSA Arbitration Clause that includes Class Action Waiver Held Enforceable by Eighth Circuit

In Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir. 2013), the Eighth Circuit recently held that an arbitration agreement which included a class action waiver provision was enforceable under the Fair Labor Standards Act. A Mandatory Arbitration Agreement (“MAA”) between plaintiff Owen and Bristol Care provided that the parties agreed

"to the resolution by binding arbitration of all claims or controversies for which a federal or state court or other dispute resolving body otherwise would be authorized to grant relief whether arising out of, relating to or associated with ... any ... legal theory that Employee may have against the Company or that the Company may have against the Employee."

The MAA further provided that it applied to "claims for wages or other compensation," as well as "claims for violation of any federal ... statute ... including but not limited to ...the Fair Labor Standards Act .... " The agreement also contained a waiver prohibiting the parties "from arbitrating claims subject to [the] Agreement as, or on behalf of, a class" (the "class waiver"). The MAA, however, expressly did not waive “… the right to file a complaint with the U.S. Equal Employment Opportunity Commission ... or any other federal, state or local agency designated to investigate complaints of harassment, discrimination, other statutory violations, or similar claims." 702 F.3d at 1051.

In reaching its decision, the Eighth Circuit rejected the National Labor Relations Board’s holding in D.R. Horton, 357 N.L.R.B. No. 184, 192 LRRM 1137 (Jan. 3, 2012), which had held that a class waiver of this type was unenforceable in an FLSA case because it conflicted with employee rights protected by Section 7 of the NLRA. The Eighth Circuit concluded that the Board’s D.R. Horton ruling was directly contrary to a long line of U.S. Supreme Court cases favoring the enforcement of arbitration agreements, and the provisions of the Federal Arbitration Act. 702 F.3d at 1054-55.