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Federal judge allows waiver of collective action claims!

A federal judge in Illinois has ruled that a release signed at termination which includes a waiver of the employee’s right to bring a collective action is enforceable and bars such an action, EmploymentLaw 360 reports.

Collective actions are like class action, and allow employees to pool their resources and proceed collectively in a lawsuit against their employer for unpaid overtime wages.

Courts recently have been faced with the issue of whether the right to bring, participate in or recover from a collective action can be waived.  Employers are increasingly including such waivers in their employee handbooks and arbitration procedures.

The 9th and the 1st Circuits have rejected waiver claims like this when unconscionability has been found.

A case is currently pending before Judge Vanessa Bryant of the District of Connecticut which will place this issue squarely before her.  Justin Pomposi has sued GameStop for overtime violations and has pleaded his case as a collective action.  GameStop has filed a motion to dismiss and to compel arbitration.  GameStop had circulated a Handbook which contained an arbitration provision which itself contained a collective action waiver.  It claims that Mr. Pomposi and all other Store Managers agreed to these terms and waived their rights when they returned to work after having received the documents.  Mr. Pomposi is represented by the Hayber, McKenna & Dinsmore and has opposed this motion.  He claims that the roll out of the plan was misleading and is unconscionable and that the enforcement of this waiver would impede his and other Manager’s ability to enforce their rights.

If waivers like the one in GameStop are permitted, FLSA c0llective actions may soon be a thing of the past.