Two More Significant Rulings for TCPA Litigation – Eleventh and Seventh Circuits Narrowly Interpret ATDS

In back-to-back decisions bound to have significant impact on Telephone Consumer Protection Act (TCPA) class action litigation, the Eleventh and Seventh Circuit Courts recently reached similar conclusions, narrowly holding that the TCPA’s definition of Automatic Telephone Dialing System (ATDS) only includes equipment that is capable of storing or producing numbers using a “random or sequential” number generator, excluding most “smartphone age” dialers. Each court expressly rejected the Ninth Circuit’s more expansive interpretation from a ruling in 2018, concluding that the TCPA covers any dialer that calls from a stored list of numbers “automatically”. These decisions are significant as most technologies in use today only dial numbers from predetermined lists of numbers.

Please find the rest of this article on our Workplace Privacy, Data Management & Security Report here.

The Supreme Court and the Future of the TCPA

In a decision that may have significant impact on businesses that face Telephone Consumer Protect Act (“TCPA”) related class action litigation, the Supreme Court recently accepted certiorari of a petition to rule on the constitutionality of the TCPA. The Court agreed to review a ruling of the Fourth Circuit which held that a TCPA exemption……

Please find the rest of this article on our Workplace Privacy, Data Management & Security Report here.

CCPA Data Breach Class Action Litigation Begins

As reported by Bloomberg Law, data breach class action litigation has begun under the California Consumer Privacy Act (CCPA). Filed in the Northern District of California, San Francisco Division, a putative class action lawsuit against Hanna Andersson, LLC and its ecommerce platform provider, Salesforce.com, alleges negligence and a failure to maintain reasonable safeguards, among other things, leading to a data breach.

Please find the rest of this article on our Workplace Privacy, Data Management & Security Report here.

Seventh Circuit Issues New Standard on Class Notice to Employees who Signed Arbitration Agreements

The U.S. Court of Appeals for the Seventh Circuit, in a case of first impression, has developed a required framework for a district court to evaluate a plaintiff’s request that the court authorize notice to putative class members who have entered into arbitration agreements with their employer.

The Seventh Circuit held on January 24, 2020, that notice of a collective action may be sent to putative class members who entered into arbitration agreements with class action waivers, unless (1) no plaintiff contests the existence or validity of the alleged arbitration agreements, or, (2) if contested by the plaintiffs, the defendant establishes, by a preponderance of the evidence, after the court allows discovery on the alleged agreements’ existence and validity, that a valid arbitration agreement exists for each employee it seeks to exclude from receiving notice.

The plaintiff, Susie Bigger, brought action against Facebook on behalf of herself and others “similarly situated” for violation of the FLSA overtime-pay requirements. Bigger asked the district court to authorize notice to the class of people she alleged were similarly situated. Facebook objected to the notice, arguing in part that many of the proposed notice recipients had entered arbitration agreements precluding them from joining the action and, therefore, those individuals were not “similarly situated” and that the notice would be misleading as they would not be eligible to join the action. The district court authorized notice of the collective action to the entire group of employees the plaintiff proposed, and Facebook appealed to the Seventh Circuit.

The Seventh Circuit reviewed the district court’s facilitation of notice for abuse of discretion. The question faced by the Court of Appeals was whether a court may authorize notice to individuals who, according to the defendant, entered valid arbitration agreements waiving their right to join the action. While this issue was considered in February 2019 by the U.S. Court of Appeals for the Fifth Circuit, in In re JPMorgan Chase & Co., 916 F.3d 494 (5th Cir. 2019), this is an issue of first impression for the Seventh Circuit.

The Seventh Circuit noted that while the twin goals of collective actions are enforcement and efficiency, they also recognized that collective actions present real dangers. Citing to the seminal Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 174 (1989), decision, the Seventh Circuit recognized the potential for abuse of the collective-action device and emphasized that courts “must be scrupulous to respect judicial neutrality” when monitoring the preparation and distribution of notice.

The Seventh Circuit then differentiated the case at bar from the Fifth Circuit’s case, In re JPMorgan Chase & Co., on the grounds that the plaintiff here did not yield to Facebook’s assertions about the existence and validity of the alleged arbitration agreements as the plaintiff had in the Fifth Circuit.

The Seventh Circuit created a new test for district courts to utilize in these circumstances and concluded that a court: (1) may not authorize notice to individuals whom the court has been shown entered mutual arbitration agreements waiving their right to join the action; and (2) must give the defendant an opportunity to make that showing.

When a defendant opposes the issuance of notice by asserting that some or all of the proposed notice recipients entered mutual arbitration agreements containing class action waivers, the trial court must first determine “whether a plaintiff contests the defendant’s assertions about the existence of valid arbitration agreements entered by proposed notice recipients.” If no plaintiff contests those assertions, then the court may not authorize notice to the employees whom the defendant alleges entered valid arbitration agreements. However, if a plaintiff contests the defendant’s assertions, then — before authorizing notice — the trial court must permit the parties to submit additional evidence of the agreements’ existence and validity. This may require that the parties engage in discovery on the issue of the existence and enforcement of the agreements. Ultimately, the employer carries the burden to show, by a preponderance of the evidence, the existence of a valid arbitration agreement with each employee it seeks to exclude from receiving notice. This framework could ultimately prove to be burdensome and costly for employers who implemented arbitration programs.

The Seventh Circuit vacated the district court’s order issuing notice and remanded for the lower court to apply the new standard. We will be watching closely to evaluate how the District Court in this case and other cases applies the Seventh Circuit’s new framework. Please contact a Jackson Lewis attorney with any questions about this case.

Ninth Circuit Affirms Denial of Class Certification in Gender Bias Case

Reinforcing the burden on any putative class to satisfy all of the requirements of Federal Rule of Civil Procedure 23, the U.S. Court of Appeals for the Ninth Circuit has affirmed the district court’s order denying the plaintiffs’ motion for class certification in an employment discrimination action. Moussouris v. Microsoft Corp., No. 18-35791 (9th Cir. Dec. 24, 2019).

The three-judge panel, consisting of Circuit Judges Richard Paez and Johnnie Rawlinson and District Judge Leslie Kobayashi (sitting by designation) separately affirmed the district court’s denial of class certification of the plaintiffs’ disparate impact and disparate treatment claims.

First, on the disparate impact claims, the panel held the district court did not abuse its discretion when it found that the proposed class did not satisfy the “commonality” requirement of Rule 23. To satisfy this requirement, the proposed class must pose “a common question that will connect many individual promotional decisions to their claim for class relief” and “produce a common answer to the crucial question why was I disfavored?” The panel found that in this case, there were no common questions because the proposed class consisted of more than 8,600 women holding more than 8,000 different positions in various facilities throughout the country. Moreover, the panel held that the plaintiffs failed to identify any “common mode” of discretion throughout the company because individual managers exercised broad discretion in assessing employees.

Next, as to the disparate treatment claims, the panel held the district court similarly did not abuse its discretion when it found the plaintiffs’ proposed class did not satisfy the “adequacy or representation” requirement of Rule 23. This requirement addresses whether the named plaintiffs and their counsel have any conflicts of interest with other proposed class members. The panel noted the putative class included thousands of members who acted as a manager once, were a lead or a manager, or were “managers of managers.” Even Katherine Moussouris, a named plaintiff of the proposed class, was a manager who had three of the putative class members report to her. Accordingly, the panel held that Moussouris has a conflict of interest with other putative class members. Additionally, the panel held that the plaintiffs’ proposal that the district court certify subclasses to address this conflict was not an issue that was properly preserved for appeal.

Please contact a Jackson Lewis attorney with any questions about this case or the class actions.

Class Action Trends Report – Fall 2019

Our quarterly report discusses new developments in class action litigation and offers strategic guidance and tactical tips on how to defend such claims. This issue covers the following topics:

  • Proliferation of independent contractor claims
  • Wage and hour
  • The persistant and seismic impact of #MeToo
  • Disparate impact
  • The onslaught of privacy class actions

Click here to download the full report.

Ninth Circuit Hears Oral Argument in Gender Bias Case

Whether a gender bias case can proceed as a class action is the question the U.S. Court of Appeals for the Ninth Circuit, in San Francisco, will decide.

The Court heard oral argument in Moussouris v. Microsoft Corp. on November 4. Katherine Moussouris appealed from the District Court’s denial of class certification in the gender discrimination action. U.S. District Judge James Robart of the Western District of Washington held that the proposed putative class members were not shown to be victims of a standard companywide policy. To the contrary, his order from June 25, 2018, holds:

Plaintiffs challenge Microsoft’s policy of allowing discretion by lower-level managers but have not identified a common mode of exercising discretion that pervades the entire company. As in Dukes, without some common direction, it is “quite unbelievable” that all Microsoft managers supervising over 8,600 putative class members “would exercise their discretion in a common way.”

The three-judge panel that heard the oral argument on appeal consisted of Circuit Judges Richard Paez and Johnnie Rawlinson and District Judge Leslie Kobayashi (sitting by designation). Moussouris’s counsel argued the District Court erred in denying class certification, claiming that women were locked into lower pay bands than men, and therefore often were paid less than their male counterparts even where they performed at an equal or higher level. Moussouris’s counsel also argued that employees were placed into peer groups composed of employees with similar skillsets, that each peer group had two pay bands, and that women were disproportionately concentrated in the lower pay bands of each peer group.

The judges, particularly Judge Rawlinson, repeatedly queried Moussouris’s counsel to point out the specific Microsoft corporate policy that allowed women to be placed in lower pay bands than men. Judge Paez also asked Moussouris’s counsel for the specific factors that were taken into consideration when evaluating members of each peer group, and whether these evaluations were discretionary. Moussouris’s counsel replied that while there was managerial discretion in evaluating employee performance, managers were restricted by the pay bands that employees were already locked into under corporate policy when determining how much to pay them. Judge Rawlinson repeatedly stated that she was “having a disconnect” because while she didn’t “necessarily disagree that the statistics are there, [] Dukes tells us that there has to be a policy that has resulted in that disparity that we can say applies across the board to every decision that’s made.” Despite asking several times to point to the specific policy Moussouris was challenging, her counsel did not appear to convince Judge Rawlinson of any specific policy in the record.

Counsel for Microsoft argued that, rather than a corporate policy in place, all decisions were made according to a calibration process in which managers would use their discretion to assess an employee’s relative contributions. Microsoft’s counsel argued that Moussouris’s own expert noted that these calibrations were extraordinarily varied and involved extensive managerial discretion. Microsoft’s counsel also pointed out that the alleged policy at issue seemed to change over time and that the current theory espoused by Mourssouris’s counsel was first introduced to the lower court at the hearing on her Motion for Certification and that the record lacked support for what Microsoft argued was the new theory of the putative class. Moreover, Microsoft’s counsel reiterated the difficult standard Moussouris was required to overcome on appeal: a clear abuse of discretion by the District Court in applying the Rule 23 criteria, and that Judge Robart’s decision contained neither an error of law or fact and that he did not abuse his discretion.

The questioning suggested that, without pinpointing a precise companywide policy that perpetuated discrimination, overturning the denial of class certification will be difficult. As this case relied heavily on the Dukes decision, we will be watching to determine whether the 9th Circuit differentiates this case from Dukes or follows Justice Scalia’s opinion.

Illinois Continues to Increasingly Regulate AI in the Workplace

Illinois continues to adopt additional privacy and security legislation. The Prairie State is home to the Biometric Information Privacy Act, first of its kind legislation regulating the collection and possession of biometric information, and also the Personal Information Protection Act, considered one of the more expansive data breach notification laws in the nation. And now, the Illinois state legislature unanimously passed the Artificial Intelligence Video Interview Act (“the AIVI Act”), HB2557, which imposes consent, transparency and data destruction requirements on employers that implement AI technology during the job interview process. The AIVI Act, the first state law to regulate AI use in video interviews, will take effect January 1, 2020.

Given the increase in litigation surrounding similar legislation, employers will want to closely monitor this law.  Please find the rest of this article discussing this legislation in more detail on our Workplace Privacy, Data Management & Security Report here

Jackson Lewis Complex Class Action Summit – November 8th

Join Jackson Lewis P.C.’s Class Actions and Complex Litigation attorneys on November 8th for a full day CLE program where we will discuss key strategies for defending and avoiding class actions. We will also review new trends and challenges facing employers. Click here for a full list of topic descriptions.

Agenda:

8:30 — 9:00 a.m.                Registration and Breakfast

9:00 a.m. — 12:15 p.m.     Program

12:15 — 1:15 p.m.              Lunch

1:15 — 4:40 p.m.                Program

4:40 — 5:45 p.m.                Cocktail Reception

Topics:

  • TCPA, and BIPA, and CCPA, and Breaches Oh My! The Onslaught of Class Actions Designed to Protect Privacy
  • Website Accessibility Lawsuits: How to Protect Yourself from Serial Claims
  • #EqualPay: The Media is Drumming Up Business for the Plaintiffs’ Bar — Are You Ready?
  • Your “Second Chair” at Trial and it’s Always Right! Leveraging Data and Analytics to Defend Class and Collective Claims
  • Going on the Offensive: Strategic Use of e-Discovery in Class and Collective Actions
  • Wage and Hour Class and Collective Actions: What’s Old, What’s New and What’s Next
  • Will the Plaintiffs’ Bar Ever Give Up? Arbitration Agreements and Class Action Waivers after Epic Systems
  • Rules Are Made to be…Followed? Ethical Challenges in Class Litigation

Jackson Lewis reserves the right to limit attendance or deny registration at its discretion.

For information about the firm’s financial hardship policy, please email Adrienne.reiff@jacksonlewis.com

Contact Us for More Information

Please contact Brooke Cassens at Brooke.Cassens@Jacksonlewis.com.

LexBlog