As covered by Workforce:
"The 6th Circuit held that the waivers were invalid. It concluded that any agreement that deprives one of his or her rights under the FLSA is invalid. Because the waiver deprived the employees of their right to participate in the collective action, it was invalid.
The employer argued that the at-issue agreement does not deprive anyone of any rights, since each employee is free to pursue an individual claim against the company for FLSA violations. The court, however, was not persuaded. Instead, the court concluded that because each employee’s potential claim for unpaid overtime was relatively small, the only real opportunity to pursue the alleged FLSA violation was via a collective action.'Requiring an employee to litigate on an individual basis grants the employer [a] competitive advantage…. And in cases where each individual claim is small, having to litigate on an individual basis would likely discourage the employee from bringing a claim for overtime wages.'As the Killion court points out, this decision now creates a split of authority between the 6th other Circuits. The Killion court also pointed out, however, that every other circuit that has decided this issue in the employer’s favor has done so because the agreements also contained arbitration clauses; the agreement in this case lacked that mechanism. It will be interesting to follow if this employer pursues this matter to the Supreme Court, and if that Court is interested in this important issue, or if other circuits follow Killion’s lead in the non-arbitration context." (link)
I think this paragraph puts it perfectly:
"Because no arbitration agreement is present in the case before us, we find no countervailing federal policy that outweighs the policy articulated in the FLSA. The rationale of Boaz is therefore controlling. Boaz is based on the general principle of striking down restrictions on the employees’ FLSA rights that would have the effect of granting their employer an unfair advantage over its competitors. Requiring an employee to litigate on an individual basis grants the employer the same type of competitive advantage as did shortening the period to bring a claim in Boaz. And in cases where each individual claim is small, having to litigate on an individual basis would likely discourage the employee from bringing a claim for overtime wages. Boaz therefore controls the result here where arbitration is not a part of the waiver provision" (link)
In summary, a thoughtful and helpful decision from the Sixth Circuit.
Of course, most employment agreements attempting to waive collective action rights will also include mandatory arbitration -- particularly after this decision. Nonetheless, at least some, like the one in this case, clearly do not.
At least plaintiff's counsel have one more stone to throw at the arbitration Goliath.
The decision is available here.
