The United States Court of Appeals for the Sixth Circuit recently held that the National Labor Relations Act and the Fair Labor Standards Act do not render individual arbitration agreements unenforceable. The case was decided in the published opinion Gaffers v. Kelly Services, Inc., No. 16-2210 (6th Cir. 2018).
https://law.justia.com/cases/federal/appellate-courts/ca6/16-2210/16-2210-2018-08-15.html
The plaintiff, a former employee of Kelly Services, Inc, alleged (along with 1,600 other employees that joined the suit) that Kelly Services underpaid him and his fellow employees. Specifically, they allege that they were shortchanged for time spent logging in to Kelley Services Network, logging out, and fixing technical problems that arise. However, half of the employees in the suit signed an arbitration agreement with Kelly Services, stating that individual arbitration is the “only forum” for employment claims. Kelly Services moved to compel arbitration under the Federal Arbitration Act. The plaintiff responded by contending that the National Labor Relations Act and the Fair Labor Standards Act rendered the employee’s arbitration agreement unenforceable. The district court agreed and denied Kelly Services’ motion to compel arbitration. The Court of Appeals reversed.
The plaintiff claims on appeal that the NLRA and FLSA displaced the Arbitration Act by providing a right to “concerted activities” or “collective action.” This argument, however, was recently rejected by the Supreme Court in Epic Systems Corp. v Lewis, 138 S. Ct. 1612 (2018). Therefore, the Court of Appeals held that the NLRA is not a way out of an individual arbitration agreement. The Court of Appeals, citing Epic and interpreting the FLSA’s text, also held that because the FLSA does not “clearly and manifestly” make arbitration agreements unenforceable, the FLSA also does not displace the Arbitration Act’s requirement that the employment agreement is enforceable as written. Therefore, the FLSA is also not a way out of an individual arbitration agreement.
This article was written by Ryan Hansen, Law Clerk
