California Court Issues Broad Decision on Illinois BIPA Class Claims

California District Court construes Illinois’s statute more broadly than Illinois’s own courts do.

On April 16, 2018, the court in In Re Facebook Biometric Info. Privacy Litigation, 3:15-cv-03747 (N.D. Cal.), certified class action claims under Illinois’ Biometric Information Privacy Act (BIPA). This lawsuit involves Facebook’s Tag Suggestions feature. The plaintiffs in that case claim that Facebook’s “Tag Suggestions” performs facial recognition on Facebook users’ photos to identify them, without providing advance notice or obtaining their consent. Facebook has contested these allegations throughout the litigation and contends that it has not violated BIPA. We previously posted about this lawsuit, and the court’s finding that plaintiffs’ allegations of procedural violations of BIPA’s information and consent provisions were sufficient to confer standing.

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Off-the-Clock Cases Stumble

In virtually every case, so-called off-the-clock disputes come down to the situations of individuals rather than classwide conduct. An employee may claim that a night supervisor told them not to record time after midnight. An individual employee may construe criticism that they are working too slowly as an admonition not to record time. Employees may find it too inconvenient to put in for breaks or meal periods they have missed for worktime emergencies. Given that the employees must prove not only that they worked off the clock but also that the employer was aware of it, almost by definition these claims should devolve into individual inquiries. For this reason, while such claims are increasingly common, careful review often reveals that they should not be maintained on a class or collective basis.

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Supreme Court Exemption Decision Could Have Broader Repercussions

Need FLSA exemptions be narrowly construed?

On April 2, the United States Supreme Court issued its decision on the issue of whether the Fair Labor Standards Act’s (FLSA) exemption for those selling or servicing automobiles at car dealerships applied to service consultants. Encino Motorcars, LLC v. Navarro, Case No. 16-1362 (Apr. 2, 2018). Unless you are a car dealer or work for one, that appears to be a pretty narrow issue, but the Court’s pronouncement may open the door to a less restrictive view of the act’s exemptions generally.

Most of the exemption litigation under the FLSA turns on the so-called “white collar” exemptions, those for executive, administrative or professional employees, but Section 13 of the statute actually has scores of exemptions of different scopes applying to different types of employees and industries. These are generally found in 29 U.S.C. Section 213 (and, in particular, subsections a and b), and include everything from amusement parks to fishing, agriculture, small-town newspapers and maple syrup production. One of these various exemptions applies to “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, truck, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers.” 29 U.S. C. Section 213(b)(10)(A).

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Who Decides the Availability of Class Arbitration? Second Circuit’s Analysis Is a Bit Murky in Wells Fargo Advisors Cases

For years, courts have struggled with who decides the availability of class arbitration and the applicable standards. We most recently addressed the thorny issues in a March 23, 2016, blog post. Unfortunately, a recent Second Circuit opinion in two consolidated appeals does little to establish clear standards or instill confidence in allowing arbitrators to decide the issue. The two cases are Wells Fargo Advisors, LLC v. Sappington, No. 16-3833-cv, (2d Cir. March 7, 2018) (Sappington), and Wells Fargo Advisors, LLC v. Tucker, No. 16-3854-cv, (2d Cir. Mar. 7, 2018) (Tucker).

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Independent Contractor Trucker Class Action that Dodged FAA Arbitration Now Moves to the Supreme Court

As we await the Supreme Court’s decision on the enforceability of class action waivers, the Court has accepted certiorari on another arbitration-related case, this one relating to the application of the Federal Arbitration Act (FAA) to the trucking industry. The U.S. Supreme Court on February 26 granted the certiorari petition of trucking company New Prime, Inc., in a case that raised two important arbitration issues in the context of an independent contractor agreement in the trucking industry. See New Prime, Inc. v. Oliveira, No. 17-340. In its petition, New Prime, Inc., sought review of two questions:

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Supreme Court Overrules Sixth Circuit (Again) In Class Action Dispute Over Retiree Medical Benefits

Is Yard-Man really dead this time?

This issue should never have arisen, the Supreme Court should not have had to address it in 2015, and it shouldn’t have required Supreme Court attention a second time just three years later. But it did.   In 1983, in the case of UAW v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983), the Sixth Circuit addressed the claims of a group of unionized workers who argued that they were entitled to lifetime medical benefits upon their retirement. In finding for the retirees, the court simply made up a set of “inferences” in favor of vesting, suggesting that they were just that – inferences – and that they should not be viewed as necessarily controlling. Over time, these “inferences” grew and began to function much like outright presumptions in favor of vesting. The court created new rules along the way largely eviscerating general termination provisions and requiring specific durational language directed at retiree benefits. These holdings resulted in employers losing the vast majority of such disputes in the Sixth Circuit, and cost manufacturing employers considerable expense to pay for benefits they had never promised. In the meantime, other circuits rejected the inferences and continued to apply ordinary rules of contract interpretation, as did the Sixth Circuit itself in such cases brought by non-unionized employees. Continue Reading

Courts Deny Certification for Adequacy of Representation in Second Class Action

One of the tactics in the current plaintiffs’ wage and hour playbook is to bring a second claim after settlement of an initial class or collective action lawsuit. In these cases, the second set of claims is purportedly brought on behalf of those who did not opt in or participate, or it is for alleged violations occurring after the settlement of the initial case. The strategy in some respects is that this is relatively easy money, as much of the discovery has already been done and the employer has already settled the claims once and presumably may do so again to save litigation cost. As two recent cases demonstrate, these tagalong cases may present problems of their own when there are problems with the class representatives.

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Faulty Statistics Lead to Decertification of California Wage and Hour Case

Nearly four years ago, the California Supreme Court issued its decision in the case of Duran v. U.S. Bank National Ass’n, 59 Cal. 4th 1 (2014), in which it virtually catalogued the many problems inherent in the plaintiffs’ statistical case that purported to demonstrate that a class of 260 outside salespeople were misclassified as exempt. We blogged that decision here. In a nutshell, the plaintiffs, with the trial court’s approval, had attempted to prove their case with an alleged statistical study that was plagued with problems involving sample size, questions about the statistical sample (e.g., the plaintiffs skewed the pool with class members having stronger claims), poor controls and faulty statistical methodology. This tactic worked at the trial court level, where the plaintiffs recovered approximately $15 million before a jury. The court of appeals, however, reversed, and the California Supreme Court similarly found that the verdict had to be set aside. The court in particular criticized the trial court’s trial plan and remanded the case to essentially start over from scratch, including an admonition to revisit the issue of class certification and a question as to whether any trial plan could adequately address both class and individual issues. The case was a very strong defense win in a jurisdiction known for being plaintiff friendly.

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Minnesota Court Cuts Proposed Attorney Fee Award From $3.2 Million to $600,000 in Off-the-Clock Case

In 2014, five law firms brought a claim for alleged off-the-clock work. As discovery revealed, the claims all arose out of conduct involving a single shift supervisor at a single restaurant, and the conduct was disputed at that. Although the allegations related to a low-level supervisory employee, the plaintiff firms then spent considerable time and expense trying to parlay that isolated set of occurrences into a nationwide collective action, ultimately without success. Faced with a smaller but still disputed wage claim involving less than $25,000, the parties settled for roughly $60,000 plus incentive awards and attorney fees to be determined by the court. The five plaintiff firms then submitted an attorney fee request for $3.2 million as part of the approval of the settlement. Harris v. Chipotle Mexican Grill, Inc., Case No. 14-cv-4181 (SRN/SER).

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Second Circuit Affirms Summary Judgment in Putative Internship Class

Four years ago, a wave of cases involving unpaid internships looked to be the next “big thing.” As those cases sputtered, however, and employers reduced or eliminated internships, the flood of anticipated litigation never fully materialized. Many targets of these claims simply settled, but a small number of these cases continued to be litigated.

In 2012, a group of unpaid student interns for magazines including Esquire and Cosmopolitan brought suit for unpaid wages, claiming that they were actually “employees” as contemplated by the Fair Labor Standards Act. Wang v. The Hearst Corporation, Case No. 12 CV 793 (S.D.N.Y). The case was not insignificant, as it involved a high-profile industry and purported to involve 3,000 interns. As explained below, the facts in this particular case made it a questionable subject for litigation and the employer made the decision to fight the claims rather than settle.  Indeed,  Hearst’s own Deputy General Counsel, Jonathan Donnellan, himself acted as lead counsel. Continue Reading

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