中出少妇

中出少妇Employment Update: Second Circuit to Review Class Action Waivers in Employee Arbitration Agreements

中出少妇Employment Update: Second Circuit to Review Class Action Waivers in Employee Arbitration Agreements

In March 2015, the U.S. District Court for the Southern District of New York granted Raymours鈥 motion to compel arbitration in Patterson v. Raymours Furniture Company, Inc., finding the company鈥檚 鈥淓mployment Arbitration Program鈥 (鈥淓AP鈥), which included individual employee arbitration agreements and class and collective action waivers, to be valid and enforceable. 聽The district court鈥檚 decision is now pending appeal before the Second Circuit where both the U.S. Chamber of Commerce (鈥淐hamber鈥) and the National Labor Relations Board (鈥淣LRB鈥) have filed amicus briefs in support of Raymours and plaintiffs, respectively.

Although the Second Circuit has yet to rule, recent court decisions enforcing class or collective action waivers included in arbitration agreements indicate that employers may benefit by implementing similar employee arbitration requirements to insulate against potential class or collective action employment disputes. 聽If the Second Circuit affirms the district court鈥檚 decision to validate and enforce Raymours鈥 EAP, employers may soon be able to avoid class or collective action employment disputes.

The July 2014 suit alleged that Raymours鈥 policies and practices violated various provisions of the Fair Labor Standards Act (鈥淔LSA鈥) and the New York Labor Law (鈥淣YLL鈥) by unlawfully depriving sales associates of wages, including overtime wages and full commission earnings. 聽In response, Raymours filed a motion to compel arbitration pursuant to its EAP contained in the handbook. 聽The EAP provides, in part, that claims 鈥渃annot be litigated by way of class or collective action. 聽All claims between [the employee] and [Raymours] must be decided individually.鈥 聽Plaintiffs argued, in part, that there was no agreement to arbitrate and that the EAP鈥檚 class or collective action waiver was unenforceable because it violated the National Labor Relations Act (鈥淣LRA鈥).

U.S. District Judge Valerie Caproni rejected plaintiffs鈥 arguments finding, in part, that the parties agreed to arbitrate and the Federal Arbitration Act (鈥淔AA鈥) mandated arbitration of the claims, and the EAP鈥檚 class or collective action waiver was enforceable and did not violate the NLRA. 聽In concluding that 鈥渁ll [asserted] claims are arbitrable,鈥 Judge Caproni further noted that, in accordance with the Second Circuit and other recent court decisions, the NLRA 鈥渄oes not stand in the way of the FAA鈥檚 command to enforce arbitration agreements 鈥榓ccording to their terms.鈥欌

The NLRB filed an amicus brief in support of plaintiffs and advocated its theory that class or collective action waivers in arbitration agreements are unenforceable and violate the NLRA. 聽Following the NLRB鈥檚 amicus brief, the Chamber of Commerce (鈥淐hamber鈥) filed its own amicus brief in support of Raymours and requested that the Second Circuit uphold the district court鈥檚 ruling 鈥渢hat Plaintiffs鈥 agreements to arbitrate disputes with their employer on an individual basis are valid and enforceable. 聽. . . [and] the FAA requires that such agreements be enforced according to their terms.鈥 聽The Chamber further notes that 鈥渢he NLRB effectively 鈥榮tands alone in holding that the NLRA overrides the FAA[,]鈥欌 reasoning that 鈥淸a]rbitration is faster, easier, and less expensive than litigation[,]鈥 benefitting everyone 鈥 especially employees 鈥 who are more likely to have 鈥渋ndividualized claims that would necessarily go unredressed if a civil action in court were their only recourse.鈥 聽Finally, the Chamber notes that reversing the district court would 鈥渇rustrate the will of Congress and eliminate all the benefits that arbitration offers.鈥

The current epidemic of employment-related class and collective actions has created costly financial liability for some employers. 聽The mere existence of a class or collective action remedy creates hydraulic pressure on employers to settle these class/collective actions --- regardless of their merits. 聽If the Second Circuit affirms Judge Caproni鈥檚 decision, it will confirm arbitration agreements as a potentially effective tool for employers to reduce litigation costs.

This article highlights recent developments in Patterson v. Raymours Furniture Company, Inc. and is not intended to be legal advice.