Federal Appeals Court in California Finds Arbitration Agreement Does Not Bar FLSA Claim

The Ninth Circuit Court of Appeals recently decided a case involving a Federal Labor Standards Act (FLSA) claim that the employer claimed was barred due to an arbitration agreement between the employer and the alleged employee. The Ninth Circuit Court of Appeals is a federal appeals court located in San Francisco, California, and has jurisdiction over federal cases in California, Arizona, Nevada, and several other states. Thus, the decision affects California worker claims involving violations of the FLSA.

The Department of Labor filed an enforcement action against an employer, alleging that the employer and his companies violated the Fair Labor Standards Act. Specifically, the action alleged that the employer violated minimum wage, overtime, record-keeping, and anti-retaliation requirements by mis-classifying delivery drivers as independent contractors rather than employees. The employer filed a motion to compel arbitration based on an arbitration agreement signed by the employer and the delivery drivers. The court denied the motion to compel arbitration, and the employer appealed.

The appeals court held that a private arbitration agreement does not bar the Department of Labor from bringing an FLSA action. The FLSA allows the Department of Labor to seek monetary relief on behalf of employees. The court reasoned that the Department of Labor was not a party to the arbitration agreement, so it was not bound by the agreement. Therefore, the Federal Arbitration Act (FAA) does not require the Department of Labor to arbitrate the claim because it never agreed to do so.

Fair Labor Standards Act Claims in California

The Fair Labor Standards Act (FLSA) is a federal law that sets forth minimum wage, overtime pay, record keeping, and youth employment standards for employees. Covered nonexempt workers under the FLSA must be paid a minimum wage of at least $7.25 per hour. States may have higher minimum wage laws as well. As of January 1, 2021, California’s minimum wage is $14 per hour for employers with 26 or more employees and $13 per hour for employers with 25 or fewer employees. Federal law requires that employers follow California’s regulations even if they are more stringent than federal requirements. Cities and counties may also have higher standards. Under the FLSA, workers are also entitled to overtime pay of at least one and one-half times the regular rate of pay for hourly work over 40 hours in a work week. Workers who believe their employer has violated federal, state, or local labor standards should consult with a California employee rights attorney.

Contact a California Employee Rights Lawyer

If you are concerned about a violation of the Fair Labor Standards Act or of state or local labor standards, you should consult the Los Angeles employee rights lawyers at The Nourmand Law Firm. Our attorneys provide knowledge and tenacious legal representation to workers who have been harmed in Los Angeles, Riverside, San Bernardino, San Diego, Palm Springs, Beverly Hills, Van Nuys, Santa Ana, Newport Beach, and other areas of Los Angeles, San Diego, San Bernardino, Riverside, and Orange Counties. Call us today at 800-700-WAGE (9243), or you can contact us through our online form.