Winning the FLSA Battle: How Corporations Use Arbitration Clauses To Avoid Judges, Juries, Plaintiffs, and Laws

Authors

Julius Getman
Dan Getman

Document Type

Symposium

Abstract

(Excerpt)

The two congressional statutes that most directly regulate labor relations are the National Labor Relations Act (“NLRA”) and the Fair Labor Standards Act (“FLSA”). Each of these statutes is based on the premise that working conditions should not be left to the market through unregulated individual contracts of employment. It was understood by Congress, in enacting these two statutes, that individually negotiated contracts would put workers at a significant bargaining disadvantage. Such contracts—drafted by the employer and enforced by it—are understood to reflect power and not the “meeting of minds” on which traditional contract law was based. The NLRA specifically states that the Act’s purpose is to achieve “equality of bargaining power between employers and employees” by “encouraging the practice and procedure of collective bargaining.” The FLSA, because of “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers[,]” requires that contracts of employment conform to a series of Federal Standards.

Although it is inevitably difficult to offset bargaining-power imbalance through legislation, it is generally agreed that these statutes have played a significant role in upgrading the economic status and dignity of American workers.

In recent years, however, employers supported by Congress, and the Courts, have been able to chip away at the policies of both statutes. The guarantees of the NLRA have been weakened as employers have learned to use the advantage that comes with management to defeat employee efforts at unionization and to render collective bargaining less effective and more dangerous for workers.