Ashely Walthour and Kevin Chappell, former window repairs for Chipio Windshield Repair LLC, filed a collective action claiming that Chipio had failed to pay minimum wage and overtime, in violation of the Fair Labor Standards Act (FLSA). After the Federal Court suit in Georgia was filed, Chipio moved to compel arbitration under the Federal Arbitration Act, citing the mandatory arbitration agreements Walthour and Chappell had signed shortly after being hired. The District Court Judge compelled arbitration. These agreements stipulated that all employment disputes were to be resolved exclusively through individual arbitration, including their class action rights.
The 11th Circuit Court of Appeals found in favor of the Arbitrator’s authority to hear the collective action noting, “the text of the FLSA does not set forth a non-waivable substantive right to collective action.” In the Fall of 2013 the 11th Circuit held in the case of DIRECTV LLC v. John Arndt et al that such arbitration “agreements were worded broadly, encompassing all past, present, and future claims or controversies relating to wages and compensation.”