A recent unpaid overtime case originating in Tennessee placed into conflict two competing legal concepts: an employee’s right to pursue collective action litigation under the Fair Labor Standards Act and an employer’s right to obtain employees’ waiver of their right to sue under the terms of contractual arbitration agreements. This case highlights some of the complexities that can arise in FLSA cases and the importance of retaining skilled Tennessee employment counsel, who can help guide you through the sometimes complicated process of navigating the procedural pathways required in taking on your case.
The lead plaintiff in this collective action case was a woman named Arvion. Arvion worked for two years as an hourly employee for a national chain of truck stops. Arvion’s case, like many unpaid overtime actions, involved allegations that the employer altered her time sheets to reduce the number of reported hours she had worked in a week, thereby dodging its obligation to pay her overtime. Furthermore, she alleged that the employer rolled back the number of reported hours of its hourly employees (in order to avoid paying overtime) as a matter of policy at locations across the country.
FLSA collective actions operate somewhat similarly to class actions. A lead plaintiff brings the case, identifies a group of employees who were harmed, and then contacts all of the members of that group to give them the opportunity to “opt in” to the collective action. (FLSA collective actions differ from class actions in that, unlike class actions in which class members must proactively opt out of the class action case, members of the group of similarly situated employees must proactively opt in to a collective action.)
The plaintiff sought to contact numerous fellow employees and give them notice of the collective action, along with the opportunity to opt in. That number of allegedly similarly situated employees was massive – in excess of 80,000.
While Arvion never signed an agreement as part of her employment promising to arbitrate wage and hour disputes and waive her right to sue in court, the employer contended that roughly 50,000 of the potential class members did have valid arbitration agreements with the employer. Those employees should not receive notice of the collective action, since their arbitration agreements meant that they didn’t actually have the option to participate in the case, the employer argued.
The federal trial judge approved Arvion’s conditional class and allowed her to go forward with notifying the other employees, including the 50,000 or so other workers who had signed arbitration agreements with the employer. The employer appealed but did not obtain relief from the Sixth Circuit Court of Appeals. That court ruled that it did not have jurisdiction to rule on the merits of the employer’s argument. A non-final ruling, such as the certification decision in this case, can be appealed by something called an “interlocutory appeal,” but the law only allows those in certain situations. The appeals court’s ruling in Arvion’s case made it clear that, while a defendant can appeal a class certification decision in a class action case, conditional certification decisions made as part of FLSA collective actions cannot be challenged by using the interlocutory appeal process.
The rulings issued as part of this case provide a substantial warning to employers that the mere act of instituting a program of requiring employees to sign arbitration agreements may not necessarily insulate them from massive collective actions. The key for employers, as well as employees, is to work with experienced FLSA attorneys from the very start of the case. By having skilled counsel on your side, you can maximize your chances (as an employee) of a successful pursuit of relief or (as an employer) of a successful defense. The diligent Tennessee overtime attorneys at Mays & Kerr are here to help you. Our attorneys have been effectively representing both employees and employers in their overtime cases, including collective actions, for many years.
To speak with one of our lawyers about your case, call 1-877-986-5529.
More blog posts:
Proper Methods for Calculating Hourly Rate of Pay for Employees on Commission to Determine Compliance with FLSA, Atlanta Employment Attorneys Blog, July 28, 2017
Tennessee Cable Installers’ FLSA Class Action Goes Back Before Sixth Circuit After U.S. Supreme Court Ruling, Atlanta Employment Attorneys Blog, Jan. 12, 2017