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Volume X, Number 193

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July 09, 2020

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Fifth Circuit: Arbitrator Properly Interpreted Arbitration Agreement to Allow for Collective Claims

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.

Jackson Lewis P.C. © 2020National Law Review, Volume X, Number 113

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About this Author

Principal

Stephanie L. Adler-Paindiris is a Principal and Office Litigation Manager for the Orlando, Florida, office of Jackson Lewis P.C. She is 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, as well as proceedings 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...

407-246-8409
David Golder, Jackson Lewis, wage hour dispute attorney, Fair Labor Standard Act Lawyer
Principal

David R. Golder is a Principal in the Hartford, Connecticut, office of Jackson Lewis P.C. Mr. Golder has extensive experience handling class and complex litigation, including nationwide, high-stakes wage and hour disputes. Mr. Golder defends employers in class-based, multi-plaintiff, and multi-district wage and hour class and collective actions involving claims for employee misclassification, improper payment of wages, off-the-clock work, and meal and rest break violations. Mr. Golder also provides preventive advice and counsel to employers wishing to limit their exposure to investigation and litigation under the federal Fair Labor Standards Act and the state laws that require employers to pay overtime and minimum wages to their employees.

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Eric R. Magnus, Jackson Lewis, Wage and Hour Class Defense Lawyer, Employment Matters Attorney
Shareholder

Eric R. Magnus is a Shareholder in the Atlanta, Georgia, office of Jackson Lewis P.C. His practice is focused primarily on defending federal and state wage and hour class and collective actions in jurisdictions across the United States.

Mr. Magnus’ collective and class action practice focus primarily on “donning and doffing,” “off-the-clock” and misclassification wage and hour cases. Mr. Magnus has obtained summary judgment at the district and circuit court levels in Fair Labor Standards Act and state law cases across the...

404-525-8200
Associate

Stephanie L. Goutos is an Associate in the Albany, New York, office of Jackson Lewis P.C. Her practice is focused on general employment litigation and class action and complex litigation.

Prior to joining Jackson Lewis, Ms. Goutos was the Senior Attorney to the New York State Deputy Commissioner of Higher Education at the Department of Education. Ms. Goutos led negotiations with New York State teacher unions, administrative unions, and district superintendents, as well as provided counsel on a wide variety of education law issues. She has...

518-434-1300