Fitness Chain Can't Compel Worker Arbitration: 5th Circ.

By Megan Leonhardt (January 25, 2012, 9:09 PM EST) -- The Fifth Circuit on Wednesday allowed a proposed overtime class action against 24 Hour Fitness USA Inc. to go forward, finding an arbitration agreement at issue contained an "escape hatch" for the fitness chain that made it unenforceable. 

In a unanimous, published opinion, the appeals court upheld a Texas federal court's ruling that the arbitration agreement in 24 Hour Fitness' employee handbook was illusory because it allowed the company to retroactively modify or terminate the agreement. 

Because 24 Hour Fitness reserved the right to unilaterally adjust the conditions of employment — including those which required employees to arbitrate claims on an...

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