Judge Vincent Briccetti of the U.S. District Court in White Plains, New York, recently dismissed a purported collective action filed by Tiffany Ryan, a former assistant branch manager at JPMorgan Chase. Ryan sued Chase in June 2012 claiming that she was misclassified as an exempt employee and denied overtime pay in violation of the Fair Labor Standards Act. The Court ruled that the binding arbitration agreement that Ryan had signed, which included a waiver of class or collective actions, required her to submit her claims to arbitration.
Ryan argued that the Court must defer to the National Labor
Relations Board's decision In re D.R. Horton. In that
case, the NLRB held that waivers of class, collective, or joint
actions in employment contracts violate the National Labor
Relations Act. Accordingly, Ryan argued that the agreement between
Chase and Ryan was unenforceable because of the collective action
waiver. The Court disagreed, finding that the D.R. Horton
decision and the NLRA were both non-persuasive and non-binding.
Citing the Supreme Court's 2011 decision AT&T Mobility
LLC v. Concepcion, and subsequent lower-court rulings based
upon that decision, the Court held that the collective action
waiver contained in Ryan's arbitration agreement was valid and
enforceable.
"At bottom, the Court finds the class waiver is fair, permits
[Ryan] to vindicate her statutory rights under the FLSA, does not
hinder her ability to recover attorney's fees or costs, and
comports with public policy favoring arbitration and honoring
private contracts," Judge Briccetti wrote.
The Court's decision represents an important and much sought
after expansion of the Supreme Court's ruling in
Concepcion, which held that companies can employ class
action waivers in consumer contracts. In the two years since the
Concepcion decision, employers have sought to apply the
Supreme Court's reasoning to analogous class action waivers in
employment contracts. Thus, the decision is likely to be cited
frequently by employers in defending against class and collective
actions in support of similar arbitration agreements.
Originally published on the Employer's Law Blog
www.daypitney.comThe content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.