NELA, The Employee Rights Advocacy Institute For Law & Policy, and the National Employment Law Project (NELP), filed an amicus brief urging the U.S. Court of Appeals for the Second Circuit to affirm the district court’s rejection of a collective action ban in an arbitration agreement. In this case, Judge Sweet of the Southern District of New York held that Citigroup’s prohibition of class and collective actions runs contrary to the purposes of the Fair Labor Standards Act (FLSA) and is therefore unenforceable. The plaintiffs and amici agree with the district court’s holding and also contend that a collective action prohibition would preclude opt-in plaintiffs with small value claims from vindicating their statutory rights to overtime pay under the FLSA.
Our brief argues that the district court’s decision is supported by the independent legal grounds that a collective action prohibition imposed as a condition of employment is unenforceable under the National Labor Relations Act (NLRA) and the Norris LaGuardia Act, as recently held by the National Labor Relations Board in In re D.R. Horton, 357 NLRB No. 184 (2012). The NLRA and the Norris LaGuardia Act prohibit employer interference with employees’ exercise of concerted activity for mutual aid or protection. The pursuit of a collective action is protected concerted activity and Citigroup’s collective action ban interferes with such activity by forbidding it. Thus, the trial court’s rejection of the collective action ban was correct for the independent legal ground that the court lacked power to enforce this unlawful provision. Our brief also highlights how enforcement of such a ban would impede the broad enforcement and remedies envisioned by the FLSA given continuing widespread FLSA violations nationwide and limited government enforcement of the FLSA
Authors: David Borgen, Joseph Jaramillo and Herbert Eisenberg.