Collective Action Waivers

Kayla Moreland , May 14, 2015

Collective action waivers attempt to prohibit employees from initiating or participating in collective action litigation for claims arising out of their employment.  This includes violations of the Fair Labor Standards Act (FLSA), among many other employment-related claims.

Collective action waivers can be an effective tool for employers in arbitration agreements, which require employees to arbitrate claims arising out of their employment individually, rather than as a collective or class action.  However, a recent 6th Circuit case makes it clear that collective action waivers cannot be placed in just any type of employment agreement.  In Killion v. KeHE Distributors, Inc., the employer included a collective action waiver in a severance agreement.  Because the agreement did not contain an arbitration provision, the court distinguished similar cases that upheld collective action waivers.  Relying on Boaz v. FedEx Customer Information Services, Inc. as controlling precedent, the court explained that employers cannot use employment agreements to deprive employees of their FLSA rights.  The court in Killion ultimately held that the collective action waiver was unenforceable, and found “no countervailing federal policy that outweighs the policy articulated in the FLSA.”

Source:  Brandon Willenberg, Is a FLSA collective action waiver by itself in a severance agreement enforceable? Sixth Circuit says “No.” (August 26, 2014), http://www.lexology.com/library/detail.aspx?g=3628f9cc-0d1a-42de-a323-7918d65ccb9a
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