Employees with potential wage-and-hour claims arising under the Fair Labor Standards Act (FLSA) have the option of proceeding on an individual or a collective basis. The main benefit of proceeding on a collective basis is it authorizes courts, subject to certain requirements, to send notice to other employees who may have claims similar to plaintiff’s claims. Those individuals then have a window within which to opt-into the claim. In February of 2020, the Seventh Circuit Court was asked to determine how, if at all, the rules are different where the potential opt-ins had signed agreements to arbitrate their claims and to do so only on an individual basis. Bigger v. Facebook, Inc., 947 F.3d 1043 (2020).

Facebook employee Susie Bigger sued Facebook for alleged violations of the FLSA’s overtime requirements. Ms. Bigger asked the court to send notice of the action to the entire group that allegedly suffered similar violations. Facebook opposed, arguing that sending notice was improper because many of the recipients had entered into agreements promising to arbitrate their claims on an individual basis.

The Seventh Circuit ultimately agreed that notice could be sent under these circumstances but only if a plaintiff contests the validity of the agreement and only to individuals the employer cannot prove, by a preponderance of the evidence, signed a valid arbitration agreement. If no plaintiff challenges the validity of the arbitration agreement, notice cannot be sent. And if the employer does not prove that an employee entered a valid arbitration agreement, then the court may authorize notice to that employee.