Killion v. KeHE Distributors
885 F. Supp. 2d 874
N.D. Ohio2012Background
- This is an FLSA case where employees allege KeHE denied overtime and seek collective action certification.
- Motions address whether a Separation and Release Agreement waives the right to join a collective action.
- Agreements were offered Feb 2012 after termination notices; Basnec signed the unmodified agreement.
- The court applies Michigan contract law as chosen by the parties and Ohio conflict rules apply to interpret the agreement.
- Record shows potential individual claims could be worth up to $40,000 per plaintiff; fees are mandatory under §216(b).
- Court decides both whether the waiver is valid and whether to void the agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can §216(b) rights be waived by contract? | Plaintiffs argue §216(b) rights are nonwaivable. | KeHE contends §216(b) is procedural and waivable. | Waiver of §216(b) rights is permitted; not per se invalid. |
| Is the Agreement enforceable as a whole, including any broad waiver of all FLSA claims? | Agreement could bar all FLSA claims and is invalid. | Severability can remove invalid parts; rest remains enforceable. | Agreement is enforceable; severability allows removal of offending sections. |
| Should the court strike the confidentiality provision under severability? | Section 5 violates FLSA policy and should be struck. | Section 5 is not FLSA-related and severable if invalid. | Confidentiality provision severable; overall agreement enforceable. |
Key Cases Cited
- Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728 (1981) (FLSA rights cannot be abridged; purposes of statute)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (arbitration may vindicate statutory rights; FAA context)
- Adkins v. Labor Ready, Inc., 303 F.3d 496 (4th Cir. 2002) (no suggestion that class waivers in FLSA are required)
- Long John Silver’s Restaurants, Inc. v. Cole, 514 F.3d 345 (4th Cir. 2008) (waiver analysis applies to opt-in, not general right to collective action)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preemption context; classwide arbitration implications)
- Raniere v. Citigroup, Inc., 827 F. Supp. 2d 294 (S.D.N.Y. 2011) (collective action rights and arbitration waivers under FLSA)