Sixth Circuit Affirms Complex Settlement of FLSA Claims Involving Exotic Dancers

An FLSA collective action involving exotic dancers is brought in 2008 and settles in 2011. Five years later, the same attorneys file essentially the same case with many of the same dancers as class members against some of the same defendants. And one of those defendants has the name “Déjà vu.” What are the odds?

Whatever the odds are, that’s what happened in Jane Does 1-2 v. Déjà vu Consulting Inc., Case Nos. 17-1801/1802/1827 (6th Cir. June 3, 2019). And in addition to the naming coincidence, the case presents a number of issues of broader importance relating to class action settlement.

Numerous cases have been brought over the employment status of exotic dancers. Often, the dancers are characterized as independent contractors living off of tips paid by customers. Frequently, disputes arrive out of whether the degree of control exercised by the dance clubs is sufficient for them to become employees.  Related issues include entitlement to the minimum wage and challenges to various financial policies, such as tip sharing, mandated by the clubs. In many cases, the club will charge the dancers what is sometimes called a “stage fee” to perform. These were the issues in the first case, Doe v. Cin-Lan, Inc., Case No. 08-CV-12719 (E.D. Mich., July 15, 2011). That case settled in 2011 with the payment of money, but no requirement that the dancers be reclassified as employees. Continue Reading

Location, Location, Location. Washington Federal Court Looks To Where Benefit Plan Was Signed And Negotiated In Agreeing To Transfer ERISA Class Action To Georgia

Much like buying a home, location can mean everything when defending a class action. Therefore, it is common for defendants to try and transfer class actions to what is viewed as a more favorable jurisdiction when there is at least a significant connection with that forum. When this happens, courts apply a largely predictable set of factors and considerations in deciding the motion. Perhaps it should come as no surprise that these factors become a little less intuitive when trying to transfer an ERISA class action, at least according to the recent decision in Mayfield v. ACE American Ins. Co., 18-cv-1695 (W.D. Wash. May 13, 2019). Continue Reading

Title VII’s Charge Requirement Isn’t Jurisdictional, But It Can Still Be Fatal

Some cases look a lot more important at first glance than what they turn out to be. Case in point, today’s decision in Fort Bend County, Texas v. Davis, Case No. 18-525 (U.S. Sup. Ct. June 3, 2019). The Court’s holding was that Title VII’s charge-filing requirement is not jurisdictional. In the end, however, the holding largely means that the requirement is still a defense, but it is one that must be asserted and pursued by the defendant.

The facts of the case were pretty straightforward. Lois Davis was an IT worker for Fort Bend County who complained of sexual harassment by her supervisor. After his resignation, she accused his successor of retaliating against her and filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC)  complaining of sexual harassment and retaliation. Some time afterwards, she was scheduled to work on a Sunday. After the new supervisor refused her offer to trade shifts with a co-worker so she could attend church services, she was discharged. Davis then wrote “religion” by hand on an EEOC charge intake form, but she never formally amended her charge. After the EEOC issued its notice of right to sue, she filed suit under Title VII, alleging both retaliation and religious discrimination. Continue Reading

Ohio Federal Court Rejects Attempt to Certify Class Against Third-Party Plan Administrator Under ERISA § 502(a)(3)

Employee Retirement Income Security Act (ERISA) claims can potentially involve significant amounts in controversy, and in an effort to broaden the pool of potential defendants, ERISA plaintiffs are often fond of arguing that the Supreme Court’s Harris Trust decision makes a party’s status as an ERISA fiduciary or nonfiduciary irrelevant in determining liability under ERISA § 502(a)(3). The recent case of Duggan v. Towne Properties Group Health Plan, et al, 1:15-cv-623 (S.D. Ohio, Mar. 31, 2019), provides a reminder that fiduciary status can and does still matter and may be a defendant’s ticket out of an ERISA class action. Continue Reading

Recent Decisions Don’t Provide Useful Guidance on Tests for the FAA Exemption of Transportation Workers

Sometimes being right is not a virtue, especially when it comes to the Federal Arbitration Act § 1 exemption. We predicted uncertainty after the New Prime v. Oliveira decision and got it. See our Jan. 17, 2019, blog post on the exemption. Indeed, if anything, recent decisions have raised more questions than answers. Part of the problem stems from the fact that in New Prime the parties admitted that Oliveira worked in interstate commerce, so applicable tests for coverage were not considered. See 139 S. Ct. 532, 539 (2019).

On April 23, 2019, District Judge John C. Coughenour of the Western District of Washington ruled on the pending motion to compel arbitration in Rittman v., Case No. 2:16-cv-01554 (W.D. Wash.), Order of 4-23-19. We previously covered the case in a March 12, 2019, blog post. Continue Reading

SCOTUS Reverses Ninth Circuit on Proper Bases for Class Arbitrations

The U.S. Supreme Court, in a 5-4 decision, ruled that arbitration agreements must provide a “contractual basis for concluding that the part[ies] agreed to [class arbitration].” Reversing the Ninth Circuit, Chief Justice John Roberts found not only that the Court had jurisdiction over the case but also that the state law contract construction rule dealing with ambiguity applied by the Ninth Circuit was inconsistent with the Federal Arbitration Act core principle that consent of the parties was required. See Lamps Plus, Inc. v. Varela, No. 17-988 (April 24, 2019).

The Decisions Below

Lamps Plus was subjected in 2016 to a successful phishing attack, during which one of its employees sent copies of current and former employees’ 2015 W-2 forms to a third party. Shortly thereafter, Frank Varela filed a putative class action in California federal court seeking relief for the data breach. Lamps Plus responded by seeking individual arbitration under Varela’s arbitration agreement. Instead, the district court interpreted the arbitration agreement to authorize class arbitration. A divided Ninth Circuit panel affirmed. Continue Reading

Illinois District Court Decertifies Equal Pay Act Collective Class Involving Physicians

Section 16(b) of the Fair Labor Standards Act (FLSA) is the provision that requires those participating in a federal claim for minimum wages or overtime to opt in to the class, making Rule 23 inapplicable. The same enforcement applies to claims under the Equal Pay Act (EPA), 29 U.S.C. Section 206(d). The EPA is itself the result of a 1963 amendment to the FLSA, predating Title VII’s prohibition on sex discrimination by several months but relying on Section 16(b), not the Equal Employment Opportunity Commission, for enforcement.

In plain English, the use of the FLSA’s enforcement mechanism means that the opt-in requirement for collective actions under the FLSA applies to the EPA as well. And that includes the use of the now-familiar procedure of a lower standard for conditional certification followed by (if granted) a period of notice and opting in, followed by a motion for decertification under a higher standard. And as with the FLSA, while conditional certification motions may be easier to obtain, holding the collective action together following decertification is much harder, as a recent case demonstrates. Continue Reading

Missouri District Court Decertifies FLSA Class of IT Workers

We’ve noted before that while conditional certification motions are often granted, such classes fare far less well at the second decertification stage and just as poorly on the eve of trial. See: “Ninth Circuit Affirms Decertification of FLSA Off-the-Clock Case” from Sept. 21, 2018, and “Ohio District Court Decertifies Class of Health Care Workers in Meal Break Case” from Feb. 12, 2013. The problem in many respects is that some courts will conditionally certify even questionable cases with the expectation that they will settle, and will only begin to grapple seriously with the underlying problems after the parties have expended considerable time, money and effort. A recent case demonstrates this point.

In Kumar v. Tech Mahindra (Americas) Inc., Case No. 4:16-cv-00905-JAR (E.D. Mo. March 25, 2019), the plaintiffs brought suit against an IT consulting business on behalf of an alleged class of technical workers, contending that they were misclassified as exempt from overtime. The proposed class included those working in “engineer” roles across several pay bands. They asserted claims not only under the FLSA, but also under the laws of Missouri and Washington state. Continue Reading

Illinois District Court Stays Conditional Certification Order Pending Appeal on Arbitrability Issues

More games of cat and mouse

Following the Supreme Court’s decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1632 (2018), plaintiffs have tried to come up with strategies to address the impact of arbitration agreements in class and collective cases. (We blogged the Epic Systems decision here). Defendants, in turn, have had to address courts that have limited or that have refused to enforce such agreements despite the broad holdings in the Epic Systems case.

Case in point. In Bigger v. Facebook, Inc., Case No. 1:17-cv-7753 (N.D. Ill.), the plaintiff was a former client solutions manager for Facebook. She contended that she and others in related positions were misclassified as exempt and should have been paid overtime under the Fair Labor Standards Act. When the plaintiff moved for conditional certification, the defendant responded that between half and 80% of the putative class members had signed arbitration agreements and should not be provided notice or a period to opt-in as their sole remedy was in arbitration. It also sought to have the arbitration agreements declared valid and enforceable. The court granted the motion for conditional certification anyway, noting that the arbitration agreements could be addressed later on. Continue Reading

Kentucky Rejoins the Majority – New Law Permits Mandatory Arbitration Agreements

A Sept. 27, 2018, Kentucky Supreme Court ruling found that mandatory arbitration agreements conditioned on employment were not enforceable. See Northern Kentucky Area Development District v. Snyder, No. 2017-SC-000277-DG. The opinion not only isolated Kentucky regarding its enforcement of arbitration agreements but also raised issues regarding the potential impact of Federal Arbitration Act (FAA) pre-emption.

In the case, Danielle Snyder, who worked as an administrative purchasing agent, brought an action under the Kentucky Whistleblower Act and Kentucky Wages and Hours Act after she was terminated. The Kentucky Supreme Court ultimately ruled that her employer “acted beyond the scope of its power when it conditioned Snyder’s employment on her willingness to sign an arbitration agreement.” And it found that “the FAA does not mandate a contrary holding . . . .”

But a careful reading of Kindred Nursing Centers Limited Partnership v. Clark, opinion 137 S. Ct. 1421 (2017), left many very skeptical of the validity of the Kentucky high court’s reasoning. Challenges based on FAA pre-emption were almost a certainty. Now, the issue is effectively moot. Continue Reading