Employment Class Action Blog

Employment Class Action Blog

Information and Commentary on Class Action Cases Affecting Employers

California Supreme Court Tells Employers to Sit a Spell While Courts Review Individual Factors for Suitable Seating

Posted in Class Certification

“Shut the door. Have a seat.” The phrase immediately conjures emotions from the recipient. Most likely, life-changing (typically bad) news is about to be imparted. For Mad Men fans, it harkens to the third-season finale when the partners decide to split and start their own firm (and when Betty finally tells Don to take a hike). For the employees of California forced to stand to perform their jobs, however, the California Supreme Court has given “have a seat” a refreshing new meaning.

Two separate lawsuits comprise the pillars of the decision handed down in Kilby v. CVS Pharmacy, Inc., 63 Cal. 4th 1 (Cal. 2016). Nykeya Kilby worked as a clerk and cashier for CVS Pharmacy, Inc. During her shift, she moved around the store stocking shelves, assisting customers, gathering carts, arranging display cases, cleaning, and removing trash. Despite these tasks, however, she spent most of her time running the register. She was required to stand to do so. Continue Reading

Collado v. J & G Transport, Inc. – When a Waived Right to Arbitrate is Revived

Posted in Arbitration, FLSA

Some may have thought that once waived, the right to arbitrate is gone forever. No so! The Eleventh Circuit decision in Collado v. J & G Transport, Inc., No. 15-14635 (11th Cir. April 21, 2016) is but the latest example.

In that case, Enrique Callado initially filed a collective action under the Fair Labor Standards Act (FLSA) alleging that J & G Transport, Inc. failed to pay its drivers for working overtime. In June 2014 Collado filed an amended complaint alleging that as a truck driver for J & G he worked approximately 85 hours a week hauling garbage, debris, and mulch. Collado claimed that J & G made its drivers sign an independent contractor agreement in an attempt to circumvent the FLSA’s overtime requirements. He sought compensatory and liquidated damages for himself and similarly situated employees who did not receive overtime pay.  Continue Reading

Statistics in Wage and Hour Class Actions: Has Anything Really Changed?

Posted in FLSA, Wage and Hour

The probability is “not really”

Statistics are kind of a holy grail of class action litigation. Everyone seems to know that they exist, but their understanding is shadowy and the quest to find valid statistical models often proves elusive. Last month’s Supreme Court decision in Tyson Foods, Inc. v. Bouaphakeo, Case No. 14-1146 (Mar. 22, 2016), certainly addressed the topic, and while it will likely increase the number of attempts to use statistical data, their actual use will likely remain limited.

The Tyson Foods case (which is much easier to say than “Bouaphakeo”) was one of many donning and doffing cases brought over the past several years in the slaughterhouse industry. In this particular case, the claim was that the employer failed to compensate employees for the time they spent donning and doffing various pieces of protective gear. The type of gear varies among the types of work actually being done. In addition, the actual amount of time worked by the employees (such as whether they worked any overtime with or without the doffing time) also varied. The district court ultimately certified classes under the FLSA and Iowa state law, and the case proceeded to trial. Continue Reading

Sixth Circuit Adopts Bright Line Test for CAFA Removals

Posted in Class Action Fairness Act

Eyeglass case provides focus for employment class action removals

Congress enacted the Class Action Fairness Act, better known as “CAFA,” to address some of the well-documented abuses of class action litigation. Among CAFA’s important provisions is one permitting defendants to remove class actions to federal court when there are over 100 potential class members and the amount in controversy exceeds $5 million. 28 U.S.C. section 1332(d). A case must be removed under CAFA within 30 days after the defendant receives a document from which it can ascertain that the amount in controversy requirement has been met. 28 U.S.C. section 1446(b)(3).

From the time of CAFA’s inception, plaintiffs’ counsel have often looked for ways to prevent removal by, for example, failing to identify the amount in controversy or trying to stipulate that the amount of controversy is actually less than the $5 million removal threshold. Some myopic courts similarly sought to impose a high standard for removal or to require the submission of evidentiary materials to establish that the dispute did, indeed, involve more than $5 million. Fortunately, the Supreme Court put an end to several of these tactics in Standard Fire Insurance Co. v. Knowles, 133 S. Ct. 1345 (2013) and Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547 (2014). We blogged about those decisions here. The upshot is that to remove under CAFA, the defendant does not need to attach evidence (it need only allege the basic facts in the removal notice) and its submission in the notice of removal need only demonstrate the amount in controversy by a preponderance of the evidence. Continue Reading

New York District Court Grants Summary Judgment for Employer in Gawker Intern Case

Posted in Class Certification, FLSA

Litigation Over Interns Dries Up Internship Opportunities

The natural and probable consequence of litigation over unpaid internships was that such opportunities would disappear because the risk of litigation for even a legitimate program would outweigh the likely benefit. The result of the much-touted Gawker intern litigation underscores that reality.

We’ve blogged about the Gawker intern litigation (Mark v. Gawker Media LLC, Case No. 13-cv-4347 (AJN) (S.D. N.Y.) at least twice before. The lawsuit was originally brought in 2013 by two individuals who had had unpaid internships for Gawker Media, a company that runs blogs like Gawker, Jezebel, and io9. The crux of the claim, like that of most of the recent spate of internship cases, was that the interns were actually employees and entitled to the minimum wage and overtime under the FLSA and state law. The court conditionally certified a class under section 16(b) of the FLSA on August 15, 2014. We discussed that decision here. Later, issues arose regarding the means of providing notice to the class through the broad use of social media, which the court significantly limited. We blogged the court’s decision on those issues here. In addition to the two original plaintiffs, 17 former interns opted in. The parties then filed various cross-summary judgment motions, and the plaintiffs sought certification of a New York state law class under Rule 23. Continue Reading

Tyson Foods, Inc. v. Bouaphakeo: The Supreme Court Produces a Narrow Holding Involving FLSA Precedent and Rule 23 Principles

Posted in FLSA, Rule 23

paycheckiStock_000018636518_LargeEmployees have been bringing wage-and-hour collective actions since long before class procedures were officially integrated into the Federal Rules of Civil Procedures in 1966. Section 16(b) of the Fair Labor Standards Act (FLSA) permitted collective actions when it was passed in 1938. In 1946, the Supreme Court in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), amplified that power by holding that employees, after establishing class-wide liability, were entitled to a reasonable inference based upon representative sampling to compute class member damages. Section 16(b) was amended in 1947 to establish more rigorous requirements for collective actions, including the opt-in requirement. See Hoffman-LaRoche Inc., 493 U.S. 165, 173 (1989).

As FLSA collective action litigation bubbled over in the past decade, citations to Mt. Clemens followed. But the rule remained that the plaintiffs first had to establish the existence of class-wide liability, and only then did Mt. Clemens permit a just and reasonable inference regarding damages.

That long-standing rule received a contemporary update this week when the Supreme Court issued its opinion in Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. __ (2016). For the first time, the Court condoned relying on Mt. Clemens’ reasonable inference to use statistical sampling to establish liability as well as damages in an FLSA collective action. Continue Reading

The Fifth Circuit Addresses an Issue That Refuses to Die: Who Determines Whether Class or Collective Arbitration Is Available?

Posted in Arbitration, FLSA

We opined on several occasions that cases dealing with a party’s entitlement to class or collective arbitration were a dying breed because of the increased use of class action waivers. And we have been proven wrong by several subsequent decisions. (See our November 11, 2013, March 12, 2015 and September 9, 2015 blog articles dealing with “gateway issues” and class arbitration.) Recently, the Fifth Circuit was confronted with the question in Neffertiti Robinson v. J&K Administrative Management Services, Incorporated, Case No. 15-10360 (5th Cir. Mar. 17, 2016), a case alleging unpaid overtime wages under the Fair Labor Standards Act (FLSA).

Based on the breadth of the contract language, the appellate court concluded there was “unambiguous evidence” of the parties’ intention to submit arbitrability disputes – including disputes over whether class or collective arbitration is available – to the arbitrator. Continue Reading

Supreme Court Spurns Rule 68 “Pickoffs,” Kind of, in Class Litigation

Posted in Class Certification

The Turkey in the Hunter's scope.

OK, maybe it’s not a silver bullet, but at least there might be a tin one.

Employment class action litigation is difficult, time-consuming, and expensive even if the employer is absolutely right. But what can an employer do to terminate it before being forced to defend a case and incur the related attorneys’ fees and internal costs?

Rule 68 has frequently been touted as a shortcut, but that Rule has proven to be an unreliable ally. Three years ago, the Supreme Court held in Genesis Healthcare Corp. v. Symczyk, 564 U.S. ___ (2013), that an unaccepted offer of judgment to the class representative could moot the class claims but, significantly, assumed for the sake of argument that an unaccepted offer of judgment would moot claims in general. The dissent, authored by Justice Kagan, highlighted this obvious flaw and openly disagreed with the premise that an unaccepted offer of judgment meant much of anything. We blogged about that decision on April 16, 2013, and noted that the decision might have limited impact due to this inherent limitation. Over the next three years, courts skeptical of offers of judgment would openly state that they agreed with the dissent, something that was not as inapt as it might sound on the surface, as they were actually saying that they disagreed with the underlying premise of the majority. Put another way, many courts found that an unaccepted offer of judgment would NOT moot a case, and thus the majority opinion was irrelevant.  Continue Reading

Sixth Circuit Issues Different Opinions on Retiree Medical Coverage After Tackett

Posted in Collective Action

medical iStock_000037614752_LargeFor 33 years, unionized employers in the Sixth Circuit had to deal with the holding and, worse still, the application of the decision in UAW v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983), which created what it called an “inference” that retiree health insurance benefits under collective bargaining agreements would “vest.” Although Yard-Man itself appeared to provide only an “inference” of vesting, its subsequent use by the Sixth Circuit increasingly reflected that the court would convert that “inference” largely into a presumption and create new rules on the fly to hold employers liable. See, e.g., Noe v. PolyOne Corp., 520 F.3d 548 (6th Cir. 2008). These decisions were likely premised more on a policy the court unofficially adopted, that employers would be found liable regardless of what the contract might say, than on ordinary principles of contract law. During those three decades, employers in four states were forced to provide hundreds of millions of dollars of healthcare benefits they had never agreed to. Continue Reading

The Board vs. the Courts: Will 2016 mark the final showdown for class action waivers in arbitration agreements?

Posted in Arbitration, National Labor Relations Act, NLRB

lightbulbs iStock_000068970433_LargeArbitration agreements are practical tools that help employers protect confidential information and avoid the costs associated with traditional litigation. They can also be an extremely effective mechanism for employers to reduce exposure to risky employment litigation and potentially abusive collective action claims under the Fair Labor Standards Act (“FLSA”). We’ve written extensively on the courts’ treatment of such agreements on several occasions.

Nevertheless, since its 2012 decision in D.R. Horton, Inc., 357 NLRB 184, the National Labor Relations Board (“NLRB”) has consistently maintained that the National Labor Relations Act (“NLRA”) prohibits arbitration agreements that require employees to waive the right to pursue labor-related class and collective actions – despite provisions allowing workers to opt out of, or into, the waivers. Continue Reading