NELF filed an amicus brief on behalf of itself and the Associated Industries of Massachusetts in this class-action lawsuit before the U.S. Court of Appeals for the First Circuit. NELF asserted that the U.S. District Court for the District of Massachusetts erred by effectively adopting a per se rule that, under Massachusetts law, a class-action waiver in an employer’s ADR program for claims under the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., (“FLSA”) is unconscionable. NELF argued, inter alia, that the District Court’s decision undermined the desirability and utility of ADR programs for the resolution of employment disputes and might, if affirmed, discourage employers from adopting such programs to the detriment of employers, employees, and the courts.
In its November 19, 2007 decision in the case the First Circuit agreed with NELF that, under Massachusetts contract law, there must be a case-specific factual inquiry to invalidate as unconscionable a class-action waiver in an employer’s arbitration policy for FLSA claims. Based on the particular facts presented, the First Circuit upheld the decision of the lower court striking the class-action waiver at issue as unconscionable. The Court expressly declined to reach the employees’ argument that all waivers of class actions for FLSA claims are per se invalid as violative of the FLSA or public policy.