In Owen v Bristol Care, Inc., (8th Cir. Jan. 7, 2013), an employee of Bristol Care, Inc. (Bristol Care) filed a class action lawsuit alleging that Bristol Care improperly classified her and others as exempt from state and federal overtime laws in violation of the Fair Labor Standards Act (FLSA). Bristol Care filed a motion to compel arbitration based on the employee's arbitration agreement and class action waiver. The district court permitted the lawsuit after ruling that the parties' Mandatory Arbitration Agreement (MAA) was invalid because its class action waiver provision conflicted with the rights provided by the FLSA.

The Eighth Circuit, reviewing the district court's decision de novo, noted that the FAA's "liberal federal policy favoring arbitration agreements" means that a party challenging an arbitration agreement has the burden of showing that Congress intended to preclude a waiver of the judicial forum. In this case, the court held that there was no "inherent conflict" between the FAA and the FLSA sufficient to invalidate the MAA's class action waiver provision.

The Eighth Circuit joined several other federal courts in deciding not to follow the National Labor Relations Board's (NLRB) decision, in In re D.R. Horton, Inc. 357 NLRB No. 184, (Jan. 3, 2012), that a class waiver provision was unenforceable in a similar FLSA challenge.

This case illustrates the strong federal policy favouring arbitration. It confirms that arbitration agreements containing class waiver provisions are enforceable in claims brought by employees under the FLSA.