Wisconsin Federal Court Holds That Employees Cannot Waive Right to Collectively Assert Wage Rights
Can your employer ask you to give up your right to bring a claim for wages with other employees? The answer is no, according to the federal court in Madison. InHerrington v. Waterstone Mortgage Corp.,Judge Barbara Crabb ruled that an employer was not allowed to ask its employees to waive their right to bring a collective action for unpaid wages. Employees may agree to resolve unpaid wage claims through arbitration as opposed to the court system. Even at arbitration, however, employees must have the right to join together to assert unpaid wage claims. In other words, employers may not force their employees to only bring individual claims for unpaid wages.
In theHerringtoncase, a mortgage company entered into contracts with its employees in which the employees agreed that they would resolve any unpaid wage claims through arbitration. The employees further agreed to resolve their claims individually. Judge Crabb held that these contracts violated the National Labor Relations Act (NLRA), which forbids employers from interfering with the rights of employees to act together to protect their rights in the workplace.
This ruling follows two other recent decisions involving the rights of employees to bring wage claims collectively. While these previous decisions use different legal reasoning, they come to the same conclusion. Employees have a right to seek unpaid overtime and minimum wage collectively.
On January 3, 2012, the National Labor Relations Board (NLRB) initiated one line of these cases, and held that employers cannot enter into contracts with employees precluding them from filing collective actions in any forum.
Judge Crabb’s decision followed the reasoning of the NLRB’s decision and relied on the protections of the NLRA as opposed to the Fair Labor Standards Act (FLSA) substantive rights. Regardless of the reasoning, these three decisions continue to reinforce that when employers illegally underpay their workers, employees have the right to act together to protect their rights.
The right to collectively assert unpaid wage claims is especially important when a large group of employees all have been illegally underpaid by their employer, but their individual claims are worth less than the potential costs of litigation. In these situations, employees joining together can share these litigation costs and, through their collective strength, recover their unpaid wages.