Florida’s Supreme Court and the federal appeals court covering Florida recently issued opinions regarding the enforceability of arbitration agreements. The federal court opinion said that an arbitration agreement waiving an employee’s ability to bring a collection action under the Fair Labor Standards Act (“FLSA”) is enforceable. The state court opinion said that an arbitration provision in an English-language sales contract signed by a Spanish-speaking couple is not enforceable.
In Walthour v. Chipio Windshield Repair, the Eleventh Circuit court (the federal appeals court having jurisdiction over Florida) enforced the collection action waivers in the plaintiffs’ arbitration agreements. The plaintiffs, two manual laborers, had signed arbitration agreements that required them to arbitrate any kind of employment disagreement and that also barred them from bringing a claim as a plaintiff or class member in any class or representative proceeding. The plaintiffs brought a collection action under the FLSA for failure to pay the minimum wage and overtime. The trial court and Eleventh Circuit said that the plaintiffs had to arbitrate their claims and that they waived their right to bring a collective action against their former employer. The Eleventh Circuit’s decision is consistent with recent Supreme Court decisions enforcing arbitration agreements that have class action waivers. Nonetheless, the National Labor Relations Board continues to prosecute unfair labor practices charges against employers that require arbitration agreements with class action waivers.
In the state court case, Basulto v. Hialeah Automotive, LLC, the Florida Supreme Court held that an arbitration provision in a contract for the sale of a van was not enforceable where the buyers were only able to communicate in Spanish and the contract was in English. An automobile dealership had the plaintiffs sign a blank contract and told the plaintiffs that the dealership would insert the agreed-upon sales price and trade-in allowance later. The plaintiffs sued because the dealership allegedly filled in a lower trade-in allowance than the parties had agreed upon. The buyers tried to invalidate the requirement to arbitrate in the purchase agreement. The Florida Supreme Court held that there was no valid written agreement to arbitrate because there was no “meeting of minds” based on the trial court’s evidentiary findings that the buyers could not communicate in English, the documents they signed were in English, the documents were blank when signed and pertinent information was filled in after-the-fact, the dealership’s employees who presented the terms of the deal to the buyers in Spanish did not have an understanding of about arbitration, no one explained the rights the buyers were waiving and the dispute resolution provisions in the documents conflicted with one another. While not an employment case, employers should consider translating important agreements and policies for non-English speaking employees and taking time to explain them to all employees.