ATLANTA — A pair of former car window repair workers will have to arbitrate their unpaid overtime claims individually after a recent court ruling. The two car window repair workers filed a Fair Labor Standards Act (FLSA) wage violation claim against Chipio Windshield Repair LLC. In the lawsuit, the former Chipio employees claimed the company failed to pay proper minimum wage and overtime.
After the car window repair workers filed their lawsuit in court, Chipio asked the court to send the case to arbitration. The former employees argued the FLSA gave them a right to a class action. Chipio, on the other hand, argued that the employees agreed to arbitrate. According to the Eleventh Circuit’s recent ruling, the FLSA does not specifically prohibit class action waivers and arbitration agreement. In fact, both the district and Eleventh Circuit courts disagreed with the former employees and determined that arbitration agreement and class action waivers are enforceable. This means you may have the right to sue as a group, but you can also agree to give up that right.
Circuit rulings like these apply to all federal cases in the states within the circuit, unless the Supreme Court overturns them. Circuit court rules do not always match each other, but in this case the Eleventh Circuit’s ruling is similar to rulings in two other circuits. And other circuits are expected to say the same in the future. This could mean that it will be harder for employees who sign arbitration agreements with collective action waivers to bring class action wage and overtime lawsuits when they are denied proper pay.
For example, the former employees in this case, signed an arbitration agreement with a waiver of the employee’s collective action rights. Chipio can now require the two former employees to individually arbitrate, or have their complaints heard outside of court, instead of taking their case to court as a group. It also means that any of their former colleagues who also signed the agreement and believe they are owed overtime will have to bring their own case to arbitration. The employees will not be able to share costs and efforts. Fortunately, courts look closely at arbitration agreements when deciding whether a case must be arbitrated or not. And there are a number of reasons why a court may determine an arbitration agreement or class waiver clause is unenforceable.
Many employers are adopting arbitration agreements and are looking at class action waivers, so it is important to read agreements before you sign them. But, if you believe you have been denied overtime pay or proper wages, contact our knowledgeable team of overtime pay lawyers today at (855) 754-2795 to discuss your situation. Or complete the Free Unpaid Overtime Case Review form on the top right of this page and our experienced legal team will evaluate your case to see if arbitration or a lawsuit is available to you. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.