Proper Arbitration Agreements May Prevent FLSA Class Action Suits

Arbitration is favored by many businesses because it can be faster and less expensive than litigation. The monetary saving is particularly attractive when a losing defendant could end up paying a winning plaintiff’s legal fees. For example, under the Fair Labor Standards Act, an employee who brings an overtime claim can recover attorney’s fees. That’s costly enough in an individual case, but could be ruinously expensive in a class action suit, which gives employers a compelling interest in having these claims heard in a less expensive form -- arbitration.

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