United States:
Second Circuit Finds Class Action Waivers Not Barred By FLSA
22 January 2014
Blank Rome LLP
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The U.S. Court of Appeals for the Second Circuit recently held
that the Fair Labor Standards Act ("FLSA") does not bar
class action waivers. In Sutherland v. Ernst &
Young, the Second Circuit relied on the Supreme Court's
recent guidance in American Express Co. v. Italian Colors
Restaurant to arrive at its decision. First, the circuit
court found that the FLSA does not contain a "contrary
congressional command" that would require rejection of class
arbitration waivers. Second, the court reasoned that while an
employee's prospective recovery for an FLSA overtime claim
would be dwarfed by the costs of individual arbitration, such an
obstacle does not render a class action waiver invalid as it does
not totally foreclose the effective vindication of a federal
statutory right.
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