On Aug. 15, 2018, the Sixth Circuit in Gaffers v. Kelly Services, Inc. held that the Fair Labor Standards Act (FLSA) does not render an arbitration agreement that requires claims to be brought individually illegal and unenforceable. Following the Supreme Court’s recent decision in Epic Systems Corp. v. Lewis, which held that a federal statute does not displace the Arbitration Act unless it includes a “clear and manifest” congressional intent to make individual arbitration agreements unenforceable, the court rejected the plaintiff’s arguments that FLSA displaced the Federal Arbitration Act simply by providing for a right to “collective action.” Instead, the Sixth Circuit, consistent with Epic, held that the FLSA “gives employees the option to bring their claims together. It does not require employees to vindicate their rights in a collective action, and it does not say that agreements requiring on-on-one arbitration become a nullity if an employee decides that he wants to sue collectively after signing one.” The Sixth Circuit then went on to reject the plaintiff’s next argument that the Arbitration Act’s savings clause permitted the court to refuse to enforce the individual arbitration agreements because they are “illegal” under the FLSA based on Epic.
Continue Reading Sixth Circuit upholds agreement to arbitrate FLSA claims on individual basis

In Russell v. Citigroup, Inc. the Sixth Circuit held that an agreement to arbitrate “all employment-related disputes” with the company does not include cases already pending in court when the employee signed the arbitration agreement.

Background

From 2004 to 2009, Keith Russell worked at Citicorp’s call center in Florence, Kentucky. As a condition of employment,

Two centuries ago, the Justices of the Ohio Supreme Court “rode the circuit” on horseback across the State, holding court in Ohio’s many county courthouses. A bit of that tradition survives today under the Court’s Off-Site Court Program, which is held twice a year outside of Columbus in order to educate high school students and other Ohio citizens about Ohio’s judicial system. As the Court’s website explains,

“When the Supreme Court holds court off-site, public, private and home-schooled high school students from throughout the host county are invited to participate. The students and their teachers are provided with curriculum material to study before the session, including summaries of the specific cases to be argued. Local attorneys team with educators at each participating school to explain Ohio’s judicial system and review case materials. On the morning of the court session, selected students attend a question and answer session with the justices of the Court. Then, students from each participating school attend one of the four oral arguments. After their assigned case has been argued, each group of students meets with the case attorneys for a debriefing.”

On April 9, at an off-site session to be held at the University of Toledo College of Law, the Ohio Supreme Court will be hearing oral arguments in an interesting employment dispute, Cedar Fair, L.P. v. Falfas, Ohio Supreme Court Case No. 2013-0890. The case concerns Jacob “Jack” Falfas, a longtime employee of Cedar Fair, which is the publicly-traded entity that owns Cedar Point and several other amusement parks across the country. Falfas worked his way up the corporate ladder to become Chief Operating Officer, and he was employed pursuant to a 2007 Amended and Restated Employment Agreement, with an automatic three-year renewal commencing on December 1, 2009 (and on every subsequent three-year anniversary) unless one of the parties provided advance notice of intent to terminate.

In June 2010, after a short telephone call with Cedar Fair’s CEO, Falfas’s employment ceased. Cedar Fair took the position that Falfas had resigned, while Falfas contended that he was terminated. In a 2-1 decision, an Arbitration Panel determined that Falfas was terminated for reasons other than cause, and that the facts failed to establish resignation. Most notably for purposes of this appeal, the arbitrators found that “equitable relief was needed to restore the parties to the positions they held prior to the breach of the Employment Agreement.” The Arbitrators thus directed that Falfas be restored to his former position as COO, with back pay.
Continue Reading Ohio Supreme Court to hear notable employment dispute at special off-site session in Toledo

One of the most significant risks to business in recent years has been the proliferation of class action employment-related lawsuits. Class action claims have been especially popular with plaintiff’s lawyers pursuing federal Fair Labor Standards Act wage claims. A class action lawsuit can mean huge costs for defense and damages. Some employers have attempted to manage the risk by having employees sign agreements requiring that they pursue employment law claims against the company in arbitration, rather than in court. Sometimes employers include in the arbitration agreement a specific waiver of the right to pursue class action claims in court or in arbitration.
Continue Reading Fifth Circuit Court of Appeals Knocks Down NLRB Decision: And, in Doing So, Supports Employer Effort to Avoid Class Action Claims