Consistent with the terms of the arbitration agreement at issue, an hourly fuel tech and driver is entitled to arbitrate collective claims alleging that his employer violated the Fair Labor Standards Act (FLSA), the federal appeals court in New Orleans has ruled.  Sun Coast Resources Inc. v. Roy Conrad, No. 19-20058 (5th Cir. Apr. 16, 2020). This decision highlights the critical need for employers to ensure careful drafting of arbitration agreements.

In this case, pursuant to an arbitration agreement, the plaintiff brought his FLSA overtime claim in arbitration on behalf of a class of similarly situated employees. In a clause construction award, the arbitrator determined “the agreement . . . clearly provides for collective actions.” Sun Coast asked the district court to vacate the award. The district court declined to vacate the award, determining that the arbitrator had not exceeded his powers in interpreting the agreement.

On appeal to the Fifth Circuit, the Court determined that in this instance, the breadth of the agreement and the authorization of “all remedies which might be available in court,” paired with the fact that the employer failed to “carve out” class proceedings suggested that class arbitration was appropriate. The Court said the arbitrator also noted that the parties agreed the American Arbitration Association (AAA) rules for employment disputes would govern arbitration, which permit class proceedings.

The employer’s principal argument was that the arbitration agreement’s terms did not expressly provide for collective proceedings.  As a result, there could be no class arbitration. The Court noted that Sun Coast did not dispute the arbitrator’s authority to decide class arbitrability at any time during the arbitration proceedings. To the contrary, the company stated in its arbitration briefing that the only issue was whether the parties “agreed to authorize” collective arbitration in the first place. Additionally, this authority was not timely challenged before the district court. The Fifth Circuit affirmed the district court’s determination.

If you have questions or if you require assistance in reviewing your arbitration agreements, please contact a Jackson Lewis attorney.

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Photo of Stephanie L. Adler-Paindiris Stephanie L. Adler-Paindiris

Stephanie L. Adler-Paindiris is a Principal and the Co-Leader of the firm’s Class Actions and Complex Litigation practice group. Her practice focuses exclusively on the representation of employers at the trial and appellate level in state and federal courts facing class and collective…

Stephanie L. Adler-Paindiris is a Principal and the Co-Leader of the firm’s Class Actions and Complex Litigation practice group. Her practice focuses exclusively on the representation of employers at the trial and appellate level in state and federal courts facing class and collective actions as well as claims of discrimination, retaliation or whistleblowing activity on an individual basis.  She also appears regularly before administrative judges and agencies.

Ms. Adler-Paindiris has conducted over a dozen trials before juries and judges in state and federal courts. In addition, Ms. Adler has participated in arbitrations and administrative hearings before the Florida Division of Administrative Hearings as well as AAA and FINRA. Ms. Adler-Paindiris has successfully defended appeals before four Courts of Appeals and has been admitted to the U.S. Supreme Court.

Ms. Adler-Paindiris also provides on-going legal support and counsel on a daily basis for many of her clients. She routinely provides training to managers and supervisors in all areas of employment law, including but not limited to, supervisory training, sexual and racial harassment prevention, disciplinary practice, documentation policies, safety and disability management.

Ms. Adler-Paindiris is also the Co-Leader of Jackson Lewis’ Women’s Interest Network or “WIN” working with the firm’s women attorneys and clients to increase diversity and inclusion efforts both internally and with our clients.

Ms. Adler-Paindiris is active in her community supporting a number of organizations related to her five children. She is also passionate about volunteering her time and services to the Wounded Warrior Project and other organizations.

Photo of David R. Golder David R. Golder

David R. Golder is a principal in the Hartford, Connecticut, office of Jackson Lewis P.C. He is co-leader of the Class Actions and Complex Litigation practice group.

Photo of Eric R. Magnus Eric R. Magnus

Eric R. Magnus is a principal in the Atlanta, Georgia, office of Jackson Lewis P.C. He is co-leader of the Class Actions and Complex Litigation practice group. His practice is focused on defending federal and state wage and hour class and collective actions…

Eric R. Magnus is a principal in the Atlanta, Georgia, office of Jackson Lewis P.C. He is co-leader of the Class Actions and Complex Litigation practice group. His practice is focused on defending federal and state wage and hour class and collective actions in jurisdictions across the United States.