No Certification Where Loss of Data Prevents Class Identification

Junk fax case presents opportunities for some employment cases

Identifying potential class members is not an issue in most employment cases, as the employer likely has any number of employment records for each of the claimants, including personnel files, electronic data, tax forms, time records, and the like, many of which are required to be kept for a set period of time. But what if the records no longer exist or if the claims depend on data that cannot be located or readily retrieved?

That was the issue the Sixth Circuit faced in Sandusky Wellness Center, LLC v. ASD Specialty Healthcare, Inc., Case No. 16-3741 (6th Cir. July 11, 2017). In Sandusky Wellness, the plaintiff sought to bring a claim under the Telephone Consumer Protection Act (TCPA) and specifically the Junk Fax Protection Act Amendments of 2005 due to the plaintiff’s receipt of an unsolicited facsimile transmission. The facts giving rise to the case appear to have been largely undisputed. The defendant, a distributor of medical and pharmaceutical products, sent a fax to 40,343 providers based on a list of 53,502 names it had purchased as customer leads. Importantly, many of the names on the original list were pre-existing company customers that had in some fashion consented to the sending of fax solicitations. Eighteen months after the fax was sent, the specific names and numbers were deleted in the ordinary course of business. Thus, there was no record of who the recipients of the fax from the original list were and, similarly, no way to determine which of those recipients had consented through a prior business relationship. Continue Reading

Massachusetts District Court Denies Certification for Claims of Unpaid Meal Breaks

It has become almost part of the plaintiff playbook to bring wage and hour claims despite lawful employer policies by claiming some sort of “class-wide” policy of deviating from those policies. Sadly, this tactic works at least as often as not in collective action litigation, where many courts are quick to conditionally certify even questionable claims with the expectation that the employer will simply settle them. A recent case from the District of Massachusetts shows that this is not always the case.

In Romulus v. CVS Pharmacy, Inc., Civil Action No. 13-10305-RWZ (D. Mass. July 12, 2017), the plaintiffs were hourly pharmacy shift supervisors and assistant managers. They contended that they were required to remain in their stores during unpaid meal breaks (which they contended constituted time worked) when no other manager was present. They alleged that they were entitled to overtime under Massachusetts law for that time. It’s not clear from the opinion why they did not assert FLSA claims, but based on the case’s prior procedural history, it may have been partly due to an effort to keep the claims in state court. See Romulus v. CVS Pharmacy, Inc., 770 F.3d 67, 70–72 (1st Cir. 2014). Continue Reading

California Supreme Court Denies Sequenced Discovery in Representative PAGA Action

On July 13, 2017, the California Supreme Court rejected lower court holdings that limited an employee’s ability to secure statewide employee contact and employment information in a representative PAGA action, when the plaintiff only worked in one of the employer’s stores.

In Williams v. Superior Court of Los Angeles County (Marshalls of CA, LLC), Case No. S227228, Michael Williams sued Marshalls of CA, a retailer with approximately 130 stores in the state, for alleged wage and hour violations. Williams contended that Marshalls had failed to provide him and other aggrieved individuals with required meal and rest breaks or compensation, and that the retailer had a “systematic company-wide policy” of not paying premiums for missed breaks. Moreover, he alleged that Marshalls failed to give timely wage payment or complete and accurate wage statements to employees.

In discovery, Williams tendered two special interrogatories seeking “the name, address, telephone number, and company employment history of each nonexempt California employee in the period March 2012 through February 2014, as well as the total number of such employees.” Marshalls objected, indicating that there were approximately 16,500 employees covered. Williams moved to compel responses. Continue Reading

Seventh Circuit Rejects Rule 67 Deposit Into Court Account as Easier Alternative to Rule 68 Offer of Judgment

Over the years, Rule 68 offers of judgment have been touted as a means of picking off class representatives and a potentially easy way to terminate a class or collective action before it starts. It rarely really works that way, as many courts, particularly those that are disposed to class actions, have found endless ways of finding them unenforceable. We’ve blogged some of these attempts in the past, but the Supreme Court’s decision Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013), seemed to give some slight hope that such an attempt might work. In Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016), however, the Court largely negated the Symczyk holding and seemed to have put at least one nail in the coffin of the claim that an unaccepted offer of judgment could moot a class action. (We blogged that decision here.) Continue Reading

Court Dismisses Class Action Claims Based on Afghanistan Labor Code

United States lawsuits involving the law of Afghanistan are uncommon, but it is common for employees to bring suit based on work done abroad generally, and not just in that one country. A recent case, however, illustrates that while the United States may be a more convenient forum, even a class action may founder if the law of the host country provides for no relief.

In Allen v. Fluor Corp., Civil Action no. 3:16-CV-1219-D (N.D. Tex. June 15, 2017), the plaintiffs were United States citizens who worked for a contractor in Afghanistan that provided noncombat logistical services. Presumably, this is a euphemism for “not military.” They contended that they worked overtime hours and were entitled to overtime pay based on Afghanistan’s Labor Code, and sought to pursue their claims on a class-wide basis.

The defendant moved to dismiss based primarily on the argument that (1) the dispute raised a “political question” that was beyond the court’s jurisdiction; and (2) the contractors were not covered by Afghan law because they were considered foreigners without the requisite work permits. The thrust of the first argument was that Afghanistan is a theater of war and courts should not interfere in matters that might increase costs or discourage contractors from accepting engagements. The court rejected this argument for a multitude of reasons, including that the contractor’s work was unrelated to policy, political or military decisions. Continue Reading

D.C. Court Dismisses Class Action Breach of Contract Case Based on Policy Manual

Supervisory employees’ claims derailed by merits

It’s unusual to see an employment class action based on breach of contract by nonunionized employees. A recent case from the District of Columbia involving the Washington Metropolitan Area Transit Authority (WMATA), reflects why, and highlights problems that occur when employees try to bring class-wide claims based on the employer’s policy manuals.

First, some background. The transit system in Washington, D.C., has drawn a great deal of unfavorable publicity over its expense, safety issues, frequent service interruptions and other issues. Despite ridership declines in the wake of several highly publicized safety issues and service problems, the Metro has approximately 12,500 employees, over 1,000 of whom make over $100,000 in base pay. The average pay for all Metro employees is $84,000 plus generous fringe benefits costing nearly $40,000 more. Most of these employees are unionized and WMATA pays over $100 million per year in overtime costs. So how do the supervisors fare? Continue Reading

Judges Refuse Certification of Off-the-clock Wage and Hour Cases

Employees at O’Hare Encounter Delays of a Different Kind

The Northern District of Illinois has now either decertified or refused to certify two “off the clock” cases involving hourly workers at O’Hare Airport. Neither case involves O’Hare employees per se, but both involve large contractors and highlight the pitfalls for plaintiffs in large off-the-clock cases.

In the first case, Solsol v. Scrub, Inc., Case No. 13 CV 7652 (N.D. Ill., May 23, 2017), the plaintiffs worked for a contractor that performed janitorial services at O’Hare. Some of the work was for the airport itself, some was for airlines inside the facility (such as gates), and some involved cleaning the airplanes themselves. The employees contended that they were forced to work through unpaid breaks or required to do work before their start times, or that supervisors underreported their time on input sheets used for calculating payroll. The court, following the familiar two-step rubric, initially certified the class, and approximately 800 employees opted in. After the opt-in period, however, the employer conducted further discovery and moved to decertify the conditionally certified class. Continue Reading

DOJ Changes Position in a Class Waiver Case Pending Before the Supreme Court

Last Friday, the U.S. Department of Justice (DOJ), in a rare move, changed its position in a class waiver case pending before the U.S. Supreme Court. On Jan. 13, 2017, the Court granted certiorari in three consolidated cases to resolve whether arbitration agreements with class and collective waivers are enforceable under the Federal Arbitration Act (FAA) despite the National Labor Relations Board’s (NLRB’s) current interpretation of Sections 7 and 8 of the National Labor Relations Act (NLRA). We have extensively covered the lengthy run-up to the cases involving Epic Systems Corp., Ernst & Young and Murphy Oil USA Inc., including the grant of certiorari, in a Jan. 17, 2017, blog here and a subsequent Sixth Circuit opinion in a June 1, 2017, blog.

The consolidated cases include one involving the NLRB, NLRB v. Murphy Oil USA, Inc., No. 16-307. Initially the deputy solicitor general, Edwin S. Kneedler, was counsel of record on the certiorari petition in Murphy Oil filed on Sept. 9, 2016. But on June 16, that position changed in the DOJ’s amicus, or “friend of the court,” brief with Jeffrey B. Wall, acting solicitor general, as counsel of record. The brief described the basis for the office’s “reconsideration” after the new administration took office:

Although the Board’s interpretation of ambiguous NLRA language is ordinarily entitled to judicial deference, courts do not defer to the Board’s conclusion as to the interplay between the NLRA and other federal statutes. We do not believe that the Board in its prior unfair-labor-practice proceedings, or the government’s certiorari petition in Murphy Oil, gave adequate weight to the congressional policy favoring enforcement of arbitration agreements that is reflected in the FAA. Continue Reading

Supreme Court Limits Review of Certification Denials

One of the difficulties of class action litigation that continues to vex employers is the frequent inability to obtain meaningful review of certification decisions. Because, the reasoning goes, certification orders are interlocutory in nature, there is no right of immediate review. While since 1998 there has been the potential for review of orders granting or denying certification of Rule 23 class actions under Rule 23(f), the decision whether to review is purely discretionary, akin to a petition for writ of certiorari. That discretion has been exercised in such a way that review of even highly questionable decisions is frequently unavailable and cases can continue to proceed and to increase cost and risk even while a petition for review is pending. These problems are even worse in so-called “conditional certification” decisions under the Fair Labor Standards Act (FLSA), where no review is available at all.

Ironically, while this problem is one primarily facing employers, attempts to find new ways to obtain interlocutory appellate review have come mainly from the plaintiffs’ bar. One method, when faced with the decision not to certify a case (or a decertification order) is for the plaintiffs to dismiss their own claims without prejudice to create a “final appealable order” and then to seek review at that time. We blogged about one such effort, which ultimately proved unsuccessful, in the case of Camesi v. University of Pittsburgh Medical Center, 729 F.3d 239 (3d Cir. 2013), and FLSA case. The Fourth Circuit reached a similar decision in Rhodes v. E.I. du Pont de Nemours & Co., 636 F.3d 88 (4th Cir. 2011), while the Ninth and Second Circuits had allowed such tactics. Continue Reading

Time Spent In Post-Shift Security Checks Once Again Held Not Compensable

If you have Amazon Prime, you get free delivery in two business days. If you want to pay extra (whether Amazon Prime or not), you can get your order the next day. So how long does it take for Amazon to get rid of a case the United States Supreme Court says is meritless? Seven years now … and counting.

We’ve previously blogged the case of Integrity Staffing Solutions, Inc. v. Busk, 135 S. Ct. 513 (2014). That case considered the issue of whether time spent by Amazon warehouse workers going through security checks at the end of their workdays was compensable. The case was initially filed in 2010. Reversing the U.S. Court of Appeals for the Ninth Circuit, a unanimous Supreme Court held in 2014 that the time was not compensable, concluding that the time spent was not “integral and dispensable” to the workers’ duties. Continue Reading

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