Eleventh Circuit Agrees with D.R. Horton Reasoning to Uphold Class Waivers in Arbitration Agreement

March 27, 2014

The Eleventh Circuit has joined four other federal circuit courts in rejecting the NLRB’s position that the Fair Labor Standards Act (FLSA) makes collective action a substantive right and overrides the FAA mandate to enforce arbitration clauses.  federal labor laws prohibit class action waivers in arbitration clauses.  In Walthour v. Chipio Windshield Repair, LLC, 2014 WL 1099286 (11th Cir., March 21, 2014), the appellate court affirmed the district court’s order that minimum wage and overtime claims be arbitrate individually, upholding language in the employer-employee arbitration agreements whereby parties expressly waived the right “to participate in a class action . . . . “

Noting that the Second, Eighth, Fifth, and Fourth Circuits had already rejected the NLRB’s “substantive right” argument (most notably in D.R. Horton, discussed here), the court reasoned that neither the language of the FLSA nor the legislative history indicated clear congressional intent that it override the FAA.