A jury in federal court in Chicago has returned a verdict for the plaintiff class in the first trial of a case involving claims under the Illinois Biometric Information Privacy Act (BIPA). Rogers v. BNSF Railway Co., No. 1:19-cv-03083 (N.D. Ill. Oct. 12, 2022).

After deliberating for approximately an hour, the jury returned a verdict in favor of the plaintiff and the class. It found that BNSF recklessly or intentionally violated the BIPA 45,600 times, or one time for each member of the class.

The verdict form presented to the jury did not ask the jury to calculate damages, asking only for the total number of negligent, reckless, or intentional violations. Shortly after the jury returned its verdict, Judge Matthew Kennelly entered judgment in favor of the plaintiff class and against BNSF in the amount of $228 million, which equals $5,000 per class member.

Read more here.

In our latest issue of the Class Action Trends Report, Jackson Lewis attorneys look at the current state of COVID-19-related litigation at this late stage of the global pandemic.

Employers have faced more than 5,000 COVID-19-related lawsuits — hundreds of which were brought as putative class or collective actions — and new lawsuits continue to be filed every day. In fact, September 2022 saw the highest number yet of new complaints challenging employer vaccine mandates. Wage and hour suits raising a variety of legal claims continue to dot the class action landscape. COVID-19-related layoffs and plant closings, and remote work trends fueled by COVID-19 quarantines, will impact WARN Act litigation for years to come.

While the worst of the COVID-19 pandemic appears to be behind us, the outbreak of COVID-19-related litigation shows no signs of slowing.

Read the Fall 2022 Class Action Trends Report.

Does a plaintiff’s allegation that he was about to join a pending Fair Labor Standards Act (FLSA) collective (class) action against his former employer, combined with the employer’s knowledge that he was a potential class member, sufficiently constitute being “about to testify” in an FLSA proceeding, such that the former employer’s actions in prohibiting the plaintiff from working for its subsidiary might constitute unlawful retaliation under the Act?

Yes, according to the U.S. Court of Appeals for the Third Circuit in a September 14, 2022 decision. 

Read more here.

For 40 years, the majority of federal courts have followed the holding of Lynn’s Food Stores, Inc. v. U.S., 679 F.2d 1350 (11th Cir. 1982), that FLSA claims may be settled only through approval by the U.S. Department of Labor (DOL) or through a lawsuit filed by the individual, in which a court of competent jurisdiction enters a stipulated judgment, after reviewing the proposed settlement for fairness. Some other courts of appeals, either directly or indirectly, have reached the same conclusion. Increasingly, however, courts are questioning whether these holdings are sound law.

In this special report, leaders of Jackson Lewis’ Class Actions and Complex Litigation and Wage and Hour Practice Groups look at the current state of the law on required court approval of FLSA claims, including claims brought as collective actions.

Has Lynn’s Food Grown Stale? Courts Increasingly Question Obligation to Review FLSA Settlements

Since the U.S. Supreme Court’s 2017 decision in Bristol-Myers Squibb Co. v. Superior Court of Cal., 137 S. Ct. 1773, limiting the scope of a court’s jurisdiction over out-of-state claims, federal courts have grappled with whether the landmark opinion applies to collective actions brought under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 216(b).

Joining two other circuits, the U.S. Court of Appeals for the Third Circuit has held that Bristol-Myers does apply to FLSA collective actions, and therefore, federal courts may not exercise jurisdiction over claims of out-of-state opt-in plaintiffs in putative collective actions, other than in the states in which the employer has its principal place of business or is incorporated. Fischer v. Federal Express Corp., No. 21-1683 (3d Cir. July 26, 2022).

The current circuit split now solidly favors employers, with three appellate courts concluding that Bristol-Myers applies in the FLSA context, limiting employees’ ability to pursue massive nationwide wage suits to the state where the employer is incorporated or has its principal place of business.

However, Bristol-Myers jurisdictional principles do not apply to Rule 23 class actions, the Third Circuit found, agreeing with its sister circuits that class actions are different.

Read about the recent decision here.

In this issue of the Class Action Trends Report, Jackson Lewis attorneys discuss recent developments in arbitration and their impact on employment class actions. These include the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, several impactful U.S. Supreme Court decisions, and the emergence of mass arbitration.

Access the latest Jackson Lewis Class Action Trends Report here.

 

Bilateral arbitration agreements governed by the Federal Arbitration Act (FAA) may require arbitration of California Private Attorneys General Act (PAGA) claims on an individual basis only, the U.S. Supreme Court has held. Viking River Cruises, Inc. v. Moriana, No. 20-1573 (June 15, 2022).

The Court’s decision overrules the California’s Supreme Court decision in Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014), to the extent Iskanian effectively required PAGA claims to be adjudicated in court on a representative basis.

Court’s Decision

The question before the Court was whether the FAA preempts a rule of California law articulated in Iskanian that invalidated provisions in arbitration agreements that waive the right to assert representative claims, including representative claims under PAGA.

To start, the Court stated that the FAA does not establish a categorical rule mandating enforcement of representative action waivers, including waivers of the right to assert claims on behalf of absent principals, such as California’s Labor Workforce Development Agency (LWDA), in any forum. To that extent, the Court concluded that the FAA does not preempt California law and does not require enforcement of wholesale representative action waivers.

The Court held that California’s rule is preempted by the FAA to the extent California precludes division of PAGA actions into individual arbitrable claims and non-individual, non-arbitrable claims. The Court held that PAGA’s built-in mechanism of claim joinder conflicts with the FAA. It stated that Iskanian’s prohibition on the contractual division of PAGA actions unduly circumscribes the freedom of parties to determine the issues subject to arbitration. Further, it held the mechanism violates the fundamental principle that arbitration is a matter of consent. In this respect, the Court concluded that California law is preempted by the FAA.

How these principles came together was dictated by the severability provision in Viking River Cruises Inc.’s arbitration agreement. The severability provision in the agreement provided that, if the representative action waiver was found invalid in some respect, any “portion” of the waiver that was still enforceable would be enforced in arbitration. Relying on this provision, the Court concluded the representative action waiver in Viking’s arbitration agreement remained invalid to the extent that, contrary to Iskanian, the waiver attempted to prevent the employee, Angie Moriana, from asserting a representative action altogether. The Court explained, the waiver was partially enforceable to the extent it required individual arbitration of Moriana’s PAGA claim. Further, the Court held that the non-individual representative aspect of the PAGA claim could not be maintained in court and was subject to dismissal because PAGA provides no mechanism to give an individual standing to proceed in court once the individual claim has been committed to arbitration.

Takeaway

Employers doing business in California should determine if an arbitration agreement pertaining to employment claims is suitable for their workforce. In addition, employers that currently utilize arbitration agreements for their workforce should review any representative action waiver and severability provisions to determine if they are sufficient to assist with compelling arbitration when a PAGA claim is alleged.

Please contact a Jackson Lewis attorney with any questions about this case, the FAA, PAGA, or arbitration agreements.

 

Individuals employed as ramp workers who frequently handle cargo for an airline are “transportation workers” exempt from the Federal Arbitration Act (FAA), the U.S. Supreme Court has held. Southwest Airlines Co. v. Saxon, No. 21-309 (June 6, 2022). Therefore, the employees are not required to arbitrate their wage-hour claims under the FAA, but may still be subject to arbitration under state law.

The FAA’s transportation worker exception excludes from FAA coverage “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1.  In recent years, the scope of the exception  has emerged as a significant issue in class action litigation. In this case, the narrow question the Supreme Court addressed to resolve a circuit split was “[w]hether workers who load or unload goods from vehicles that travel in interstate commerce, but do not physically transport such goods themselves, are interstate ‘transportation workers’ exempt from the Federal Arbitration Act.” The Supreme Court made clear that, when determining whether workers qualify for the FAA’s transportation worker exception, the analysis turns on the specific duties those workers perform and not the company or industry in which the workers are engaged.

A more detailed analysis of the Supreme Court’s decision can be found here.

For more on the decision, see Jackson Lewis’ California Workplace Law Blog.