Supreme Court Asked to Decide on Waivers in Unpaid Overtime Cases

The federal Fair Labor Standards Act (FLSA) requires employers to compensate individuals for overtime and to provide sufficient break and meal time. However, a question stands as to whether the FLSA gives employees the right to file and participate in a collective action to recover wages and time. Collective action is traditionally defined as “any action taken together by a group of people whose goal is to enhance their status and achieve a common objective.”

In a petition for a writ of certiorari filed May 8, former auto repair employees have asked the U.S. Supreme Court to consider whether Congress’ inclusion of a class action remedy in the text of the FLSA constitutes a “contrary congressional command.”

On April 30, 2012, plaintiffs Ashley Walthour and Kevin Chappell filed an FLSA unpaid overtime class action lawsuit on behalf of themselves and other employees of Chipio Windshield Repair LLC, Kingco Promotions Inc., and Levaughn Hall. Employed as window repairers in August 2011, they assert that their employers regularly did not pay them minimum wage or compensate them for overtime as required by the FLSA. Walthour and Chappell said they often worked 50-80 hours per week.

Instead of responding to their unpaid overtime lawsuit, the defendants filed a “Joint Motion to Compel Arbitration and Motion to Dismiss Plaintiffs’ Complaint,” or a motion to stay the proceedings. They did this because the plaintiffs had signed a waiver agreeing to arbitrate.

Rights Under the FLSA

On Feb. 27, 2013, the U.S. District Court for the District of Northern Georgia issued an order and opinion noting that the question of “whether a contractual waiver of the right to bring a collective action in a mandatory arbitration agreement is enforceable under the FLSA is a topic of increasing debate among federal district and appellate courts.” So while the court found plaintiffs arguments against compelling individuals to arbitration strong and felt that the language indicated that Congress “did not intend the collective action provision be waiveable,” and even found “persuasive authority to support Plaintiffs’ assertion … that the right to proceed collectively, either in a judicial forum or in arbitration, is a substantive right afforded by the FLSA,” it still granted the motion to compel arbitration. The court stated that “until either the Supreme Court or the Eleventh Circuit put to rest the question of whether a collective action is a substantive right under the FLSA which cannot be contractually waived by an employer, this Court must order such claims to mandatory arbitration.”

Walthour and Chappell don’t dispute that they signed agreements to arbitrate, implying they waive their right to bring or join a FLSA collective action, but they are appealing the district court’s judgment to the Eleventh Circuit Court of Appeals, asking it to reconsider the decision binding them. They contend that the arbitration agreement, as written, is unenforceable because it forces them to waive the right to proceed collectively, which is a substantive statutory right under the FLSA.

The plaintiffs allege the appeals court made a mistake when it relied on the high court’s recent opinion in American Express Co. v. Italian Colors, because the 1991 underlying case, Gilmer v. Interstate/Johnson Lane Corp., involved a class waiver question in relation to the Age Discrimination in Employment Act (ADEA), not the FLSA. They contend in their petition that the question of whether the FLSA contains a “contrary congressional command” remains unresolved because none of the cases the Eleventh Circuit relied on, including Italian Colors, have a class action provision. Moreover, none of those cases were brought under the FLSA.

Plaintiffs’ lawyer, Stephen Michael Katz of the Katz Law Group, said that the Eleventh Circuit ruling could prove fatal to employees’ ability to bring wage-and-hour claims. He said, “If we’ve learned anything from the [FLSA] in last 70 years, it’s that you won’t be able to bring any overtime claims unless you have the threat of collective action.”

Walthour and Chappell are seeking to recover unpaid overtime, wages, liquidated damages, and attorney’s fees.

The unpaid overtime class action lawsuit is Ashley Walthour, et al. v. Chipio Windshield Repair LLC, et al., Case No: 13-11309, in the U.S. Court of Appeals for the Eleventh Circuit.

Join a Free Unpaid Overtime Class Action Lawsuit Investigation

If you were forced to work off the clock or without overtime pay in California within the past 2 to 3 years, you have rights – and you don’t have to take on the company alone. Learn more and obtain a free evaluation of your case to see if you’re eligible for back pay and other compensation at the Wage & Hour, Overtime Pay Class Action Lawsuit Investigation.