Over the past week, the United States Court of Appeals for the Second Circuit (“Second Circuit”) has issued two decisions in which it affirmatively held that: (i) a plaintiff cannot use the “effective vindication doctrine” to invalidate a class action waiver of claims brought under the Fair Labor Standards Act (“FLSA”); and (ii) the FLSA does not include a “contrary congressional command” that would prohibit the enforcement of class action waivers. These decisions are a step in the right direction for employers seeking to enforce class action waivers of FLSA claims.
In the first matter, Southerland v. Ernst & Young LLP, Case No. 12-304 (August 9, 2013), the Second Circuit reversed a decision of the Southern District of New York (“Southern District”) in which the Southern District, relying on the “effective vindication doctrine,” denied Ernst & Young’s motion to compel arbitration against a former employee on the grounds that the parties’ arbitration agreement could not be enforced because it would not be financially feasible for the plaintiff to proceed with individual arbitration. In support of its decision, the Southern District, in reliance on In re American Express Merchants’ Litigation, 554 F.3d 300 (2d Cir. 2009), held that the parties’ class action waiver was unenforceable under the “effective vindication doctrine” because the class action wavier would “effectively ban” all proceedings by Southerland against Ernest & Young due to the low-value of her individual claim as compared to the high cost of litigating the claim.
In reversing the Southern District, the Second Circuit held that the United States...
