Arbitration Agreements in the Wage-and-Hour Context

The remarkable rise in wage-and-hour litigation under the Fair Labor Standards Act (“FLSA”) ' and increasingly under state law ' over the past few years has been described as a “tsunami.” Nearly every day, news breaks of another multi-million-dollar, class-action settlement for unpaid overtime or alleged off-the-clock work. Wage-and-hour claims are a significant concern, due in part to the low standard to proceed to class discovery and the possibility of attorneys' fees accompanying any plaintiff's verdict. Discussions between employers and their counsel about wage-and-hour claims are common. For corporate attorneys, questions about how an employer can limit both the costs associated with and exposure to wage-and-hour claims have become ever more difficult. Employer-employee arbitration agreements may be part of the answer.