Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

176 | Massachusetts Wage & Hour Peculiarities, 2022 ed. © 2022 Seyfarth Shaw LLP voluntarily entered into the agreement and whether the language of the agreement was broad enough to encompass claims under the Wage Act. 1060 While the agreement does not have to expressly mention the Wage Act in order to cover wage disputes, 1061 employers that choose to enter into arbitration agreements should draft the agreement broadly enough to reflect their intent to arbitrate wage disputes. Although the Appeals Court found that it could look to state contract law to determine the enforceability of an arbitration agreement, federal law limits a court’s authority to find that an arbitration agreement is unenforceable under state contract law. Under the Federal Arbitration Act (FAA), 1062 there is “a liberal federal policy favoring arbitration agreements.” 1063 In AT&T Mobility LLC v. Concepcion , the U.S. Supreme Court found that the FAA preempts any state law that undermines the FAA’s purpose of ensuring that arbitration agreements are enforced according to their terms. 1064 The extent of the FAA’s preemption is broad, preventing states from using any state laws or rules that would have a disproportionate impact on arbitration agreements in comparison to other types of contracts. 1065 Accordingly, the Court struck down a California law deeming class waivers in arbitration agreements to be unconscionable and therefore unenforceable. 1066 While states may find arbitration agreements unenforceable because of defenses that would apply equally to all types of contracts (e.g., duress), states cannot impose rules or laws that hinder the enforceability of arbitration agreements specifically. 1067 Thus, under Concepcion , Massachusetts cannot place special requirements or limitations on arbitration agreements. Massachusetts, therefore, cannot prohibit the arbitration of particular types of claims, including wage and hour claims. 1068 Until recently, the enforceability of class action waivers in arbitration agreements was even more uncertain and complex, with Massachusetts courts taking a stricter view of the matter than their federal counterparts. However, in Stolt-Nielsen S.A. v. AnimalFeeds International Corporation , the U.S. Supreme Court found that it is inconsistent with the FAA to impose class arbitration on a party whose arbitration clause is silent on the issue of class arbitration. 1069 Shortly thereafter, in 1060 Id . at 277-78. 1061 Machado v. System4 LLC , 471 Mass. 204, 217-18, 218 n.19 (2015) (arbit ration agreement covering “any claims” arising out of the relat ionship between the part ies covers wage and hour disputes). 1062 9 U.S.C. § 1 et seq . 1063 Perry v. Thomas , 482 U.S. 483, 489 (1987). Note that the FAA does not apply to “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. Whether this exclusion applies is for a court to decide. See New Prime Inc. v. Oliveira , 139 S. Ct . 532 (2019). 1064 AT&T Mobility LLC v. Concepcion , 563 U.S. 333, 347 n.6, 351 (2011). 1065 Id. at 342. 1066 Id . at 337-38, 352, reversing the Discover Bank rule in Discover Bank v. Superior Court , 36 Cal.4th 148, 162 (2005). 1067 Id . at 341-43. 1068 Id. at 341. 1069 Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp ., 559 U.S. 662, 666, 687, 130 S.Ct . 1758, 1764, 1776 (2010).