Observing that arbitrators’ lack civil law enforcement authority, the Court holds that statutory claims are not automatically barred from going to court by prior submission to contractual dispute resolution procedures like arbitration.

Relevant Facts: A group of unionized truck drivers sued a trucking company for wage theft under the Fair Labor Standards Act (FLSA). The truckers began by filing a grievance per their collective bargaining agreement, which was rejected without explanation. The truckers then filed a claim in federal district court under the FLSA, which the court rejected. The Court of Appeals affirmed, concluding that the petitioners’ submission to arbitration barred them from asserting an FLSA claim in court.

Question Before The Court: Whether an employee may pursue both contractual and statutory rights claims through arbitral or judicial proceedings.

The Opinion: The Court held that FLSA claims are not barred by prior submission to contractual dispute resolution procedures like arbitration. Noting that FLSA rights arise out of a statute to be considered separate from contractual rights, the Court provided, “Not all disputes between an employee and his employer are suited for binding resolution in accordance with the procedures established by [contract]. While courts should defer to an arbitral decision where the employee’s claim is based on rights arising out of [an arbitration] agreement, different considerations apply where the employee’s claim is based on rights arising out of a statute designed to provide minimum substantive guarantees to individual workers. . .. Even though a particular arbitrator may be competent to interpret and apply statutory law, he may not have the contractual authority to do so…. Because an arbitrator is required to effectuate the intent of the parties, rather to enforce the statute [here, FLSA], he may issue a ruling that is inimical to the public policies underlying the FLSA, thus depriving an employee of protected statutory rights.”