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Special Ruling Affirms FLSA Claims are Not Exempt from Arbitration Agreements

WASHINGTON, DC — On December 12, 2017, a unanimous ruling from a three-judge panel of the 2nd Circuit court affirmed the ruling of a district court that a truck driver, Jaun Rodriguez-Depena, must arbitrate his FLSA claims. Justice Ruth Ginsburg of the United States Supreme Court recently referred to the mandatory arbitration agreements discussed in this case as “yellow-dog contracts” in which an employee has absolutely no bargaining power in. However, the 2nd Circuit ruled as a matter of first impression for the circuit that an arbitration agreement signed by Mr. Rodriguez at the onset of his employment was applicable to his FLSA claims and prevented him from bringing a lawsuit in Federal Court.

Are Arbitration Clauses in Overtime Pay Lawsuits Enforceable?

Companies that have failed or refused to pay employees mandatory overtime pay have tried to avoid class action suits in the past by using a legal technicality.The employer often includes a mandatory arbitration clause in the contract or employment agreement to avoid facing a lawsuit in a trial court. In the past, these clauses have been held to be enforceable and this has deprived many workers their fair day in court.

In recent important legal decisions for employees in all industries, several federal courts have recently held that companies cannot force workers to surrender their right to file and join class action lawsuits involving wage and hour claims or restrictive employment terms and conditions.

Mandatory arbitration is a hot topic at the United States Supreme Court. Many issues surround the topic due to agreements that are forced on employees by their employer, just like in Mr. Rodriguez-Depena’s case. His case involved wage and hour claims, but normally the mandatory arbitration claims prevent all employment lawsuits against an employer. Instead, the employer requires the employee to waive their right to file a lawsuit against them and to instead handle the issues in an arbitration setting. This setting can often times be a more favorable arena for the employer rather than the employee.

Another major issue in discussion is whether an employer can insert a class action waiver into the arbitration agreement. There has been a substantial increase in not only mandatory arbitration agreements; but also class action waivers within those arbitration agreements.  Large employers include class action waivers because, particularly where there are limited damages in play, which is often the case with an individual wage theft action, the employer is able to deter the claim altogether by isolating a single plaintiff.  One of the purposes of Section 216(b) of the FLSA is to allow Plaintiffs to bring an action as a collective action, wherein they can pool their claims together with other similarly situated individuals.  Class action waivers in mandatory arbitration agreements are a method utilized by employers to avoid those collective actions.

Filing an Unpaid Overtime Pay Lawsuits

If your employer is denying you overtime pay or has not paid you overtime wages in the past, you may be entitled to file an overtime pay lawsuit.Under the recent court decisions, you may be able to sue for overtime wages even if your employment contract has an arbitration clause. Many overtime lawsuits are filed as class action lawsuits by a group of employees against their employer and you can often choose to join that lawsuit or file your own separate claim.

FLSA Overtime Lawsuits

Call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you believe that your wage rights are being violated under the FLSA. Our top-rated team of unpaid wage lawyers will evaluate your situation to determine your best course of action to help you seek justice.

Our office will also determine if it is in your best interest to file a lawsuit against your employer. Because strict time limitations apply for filing these types of claims, we advise you contact our experienced unpaid overtime wage attorneys at your earliest convenience and preserve your legal rights.

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