Another Win for FLSA Class Action Waiver

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In Porreca v. Rose Group, No. 13-1674 (E.D. Penn. Dec. 11, 2013), an employee attempted to bring class claims for violations of the wage and hour provisions of the FLSA against its restaurant employer in federal court.  The restaurant moved to compel arbitration, and the employee fought it, arguing that the arbitration agreement was unconscionable.  The court, despite its apparent distaste for such agreements in the big fish versus small fry context, compelled arbitration.  In Pennsylvania, as in many states, a finding of unconscionability relies on a sliding scale of both procedural and substantive unconscionability.  The agreement was procedurally unconscionable due to its “take it or leave it” nature and the inequality of bargaining power among the parties.  However, the court could not find the agreement substantively unconscionable.  Despite the provision waiving the employee’s right to collective action under the FLSA, the court recognized that it was bound by both Supreme Court and Third Circuit precedent to conclude one’s FLSA rights are waivable.

Topics:  Arbitration, Arbitration Agreements, Class Action, Class Action Arbitration Waivers, FLSA, Motion to Compel

Published In: Alternative Dispute Resolution (ADR) Updates, Civil Procedure Updates, General Business Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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