More and more clients have been asking me whether it is wise to require employees to sign mandatory arbitration agreements. My response is generally that there are advantages and disadvantages to mandatory arbitration of employment claims, and that it depends largely on what the client is trying to accomplish. Many employers these days view the advantages of mandatory arbitration - avoiding jury trials and class and collective actions - as outweighing the disadvantages.
Recently, however, there has been some question whether class/collective action waivers are enforceable in the employment context. The National Labor Relations Board issued a ruling earlier this year, In re D.R. Horton, Inc. , which held that, at least in certain circumstances, they are not.
Judge Lazzara of the Middle District of Florida issued an important decision on Friday, compelling arbitration of collective action FLSA claims. At issue was an arbitration agreement that clearly required arbitration of the FLSA claims, including those brought as part of a collective action. The plaintiffs argued that the collective action waiver was unenforceable as a result of Horton. Juge Lazzara ultimately disagreed, and noted that the law in the Eleventh Circuit is clear on this point - class/collective action waivers in arbitration agreements are enforceable.
This decision provides clarity on this subject, and is ultimately good news for Florida employers. This has been a fast moving area of the law in recent years, but, at least for now, it is clear Florida courts will enforce properly drafted arbitration agreements containing class action waviers.
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