When an employer settles a collective action lawsuit under the Fair Labor Standards Act (FLSA), may the settlement agreement also include a release of any rights to overtime pay which the plaintiffs may have under state law? In Wells Fargo Wage and Hour Employment Practices Litigation, MDL No. H-11-2266 (S.D. Tex. May 12, 2014), the court answered that question with a clear “yes.”
Charles J. Stiegler
Ninth Circuit Invalidates Attempt To Plead Around CAFA’s Jurisdictional Amount In Controversy
By Charles J. Stiegler & Laura Reathaford on
In 2005, Congress passed the Class Action Fairness Act (CAFA), which creates federal jurisdiction over class actions involving more than 100 class members and $5 million in controversy. Plaintiffs have long attempted to avoid CAFA’s invocation of federal jurisdiction by stipulating to no more than $5 million in classwide damages. In Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345 (2013), the Supreme Court’s first CAFA case, the Court rejected such stipulations on the basis that, prior to class certification, a named plaintiff has no authority to legally bind unnamed class members.
Second Circuit Reaffirms Enforceability of Arbitration Agreements Containing Collective Action Waivers In Two FLSA Cases
By Charles J. Stiegler & Laura Reathaford on
Two recent decisions from the U.S. Court of Appeals for the Second Circuit have reaffirmed the enforceability of employment-related arbitration agreements containing class action waivers. In Sutherland v. Ernst & Young and Raniere v. Citigroup, Inc. the Second Circuit held that the Federal Arbitration Act (FAA) requires courts to enforce a valid agreement to arbitrate even where the relevant substantive law – here, the Fair Labor Standards Act (FLSA) – permits enforcement via collective or class action.