SDNY Judge Compels Arbitration of a Wage and Hour Class Action on an Individual Basis

Southern District of New York District Judge Barbara S. Jones granted UBS Financial Services, Inc. a motion to compel arbitration on an individual basis in class and collective action claims for the company’s alleged violations of the FLSA (Fair Labor Standards Act), the California Labor Code and the California Unfair Competition Law.

On December 4th, 2012, Judge Jones rejected the plaintiffs (five former and current employees of UBS) opposition to the motion. Whose arguments on class waivers, statutory rights and potential damages were discounted by the Judge as unsupported “self-serving estimates as to the likelihood of success” and the arbitration agreements the plaintiffs had signed as employees were indeed enforceable and in no way violated the Financial Industry Regulatory Authority Code (“FINRA Code”).

Southern District of New York employers will gain much from this decision, whereas previously their power to compel arbitration on an individualized basis was greatly questioned in terms of FLSA collective action claims.