On March 21, 2014, in Walthour v. Chipio Windshield Repair, the US Court of Appeals for the Eleventh Circuit held that an arbitration agreement that waived an employee's ability to bring a collective action under the Fair Labor Standards Act (FLSA) was enforceable under the Federal Arbitration Act (FAA) (No. 13-11309, (11th Cir. Mar. 21, 2014)).

The plaintiffs were former employees of the defendants. When the plaintiffs began their employment, each plaintiff signed a separate, identical arbitration agreement that required all employment disagreements to be submitted to binding arbitration. By signing the agreement, each employee also agreed only to bring claims individually and not as a class member. The plaintiffs, therefore, gave up their right to participate in a class action suit against the defendants.

After ending their employment with the defendants, the plaintiffs filed a putative class action against the defendants under the FLSA, alleging various wage and compensation violations. The defendants filed a motion to compel arbitration, as well as a motion to dismiss or, in the alternative, to stay the proceedings. The plaintiffs opposed these motions, arguing that their right to file a collective action under FLSA § 16(b) was non-waivable and that the arbitration agreement was invalid because it purported to waive this right. The district court granted the defendants' motions and dismissed the plaintiffs' complaint, noting the FAA's strong policy in favor of arbitration.

The Eleventh Circuit affirmed the district court's decision. The court concluded that § 16(b) of the FLSA did not provide a non-waivable, substantive right to bring a collective action and there was no contrary congressional command that precluded the enforcement of the arbitration agreement under the FAA. The arbitration agreement, which waived the right to bring a FLSA collective action, was therefore enforceable under the FAA.